pinit fg en rect gray 20 Accountability is key in nonprofit fundraising

Many of my colleagues and I have been preaching for years that accountability is KEY in fundraising.  And now there are several instances of accountability gone wrong in the news. Here are three and lessons every nonprofit can learn from them.

If you haven’t heard about the Susan Komen Foundation’s debacle, then you’ve been living under a rock. Their decision to cut grant funding to Planned Parenthood was met with such public outcry, that they’ve reversed their decision. The only problem is the damage is already done. Many have become disenchanted with the organization that began the movement that has resulted in a tidal wave of pink across the globe. I predict their donations will suffer and some will decide not to participate in their events because of this. Whether you agree or disagree with their decision, the lesson to learn is that you must think through the implications of the decisions you make. I’m not saying don’t do things that will piss some people off. Just be prepared for the aftermath. Think about the support you stand to lose and base your decision on that. And be very careful about thinking it will never happen to you. Arrogance is the grease that sends you into public relations hell.

In another case, country singer Garth Brooks asked for the return of a half-million dollar gift from a hospital. This sounds to me like a case of donor intent not being honored. The only reason a donor should EVER consider asking for a gift back is when they believe you as the nonprofit aren’t using it appropriately. The solution? First, have integrity and spend the money as the donor intended.  If you can’t do that, don’t accept the gift. Second, communicate. Talk with the donor.  Tell him/her what you’re doing with their gift and how it’s having the desired effect. By the way, this goes for ALL donations, not just the big ones.

Finally, in my local news is the story of a Board suffering from raging ignorance. It has come to light that the Executive Director’s compensation is excessive and some Board members said they didn’t know what her compensation package was. Really? How could you not know? Don’t you ask questions during the meeting? Don’t you look at the financials? That’s your job after all. Every Board has some basic roles and responsibilities, and one of the most important is fiduciary oversight. The Board’s job is to make sure that money coming into the organization is spent wisely and properly. If not, prepare for public outcry and angry donors.

The thing that each of these cases have in common is the nonprofits involved all have damaged reputations. It will take each of them some time to recover from this negative publicity and rebuild the public’s trust. When the public doubts an organization’s trustworthiness, fundraising becomes very difficult if not impossible.

So take a lesson. Always work to build trust with the public. Be a good steward of your resources. Be transparent with your records. Be accountable. And you won’t wind up on the front page of the local paper in a story of scandal.

  1. Transparency can be scary for organizations to embrace. I applaud you for addressing this important topic, Sandy. It’s a strong, healthy organization that embraces sharing lots of information about how funds are used. I do think when we focus on how much a CEO is paid we must be careful though. To focus on admin overhead in a negative way doesn’t serve social profit organizations. And most organizations where someone is compensated at a 6 figure salary are large entities where a strong leader is critical. Nonprofit is not a business strategy it is a tax status. And in order to do good work a 501 c(3) organization is a business that needs strong leadership.

    Dan Pallota’s book Uncharitable is a great read on this topic. Here’s a post on some of what he covers in the book and when he’s out raising awareness about what questions donors may want to be asking: http://tinyurl.com/84dtzt7

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