doing well by doing right: a fundraiser’s guide to ethical...

Int. J. Nonprofit Volunt. Sect. Mark. 10: 175–181 (2005)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.1002/nvsm.11

Doing well by doing right:A fundraiser’s guide to ethicaldecision-makingMichael J. Rosen*Executive Vice President, Client Development, Legacy Leaders Inc., USA

* The level of trust a prospective donor has in a charity will, in part, determine whether the

individual chooses to support the charityaswell as theamountof that support. Akey factor

involved in trust is an organization’s ethical standards. Donors prefer to make donations

to organizations that maintain the highest principles. If an organization can consistently

make the best possible, most ethical decisions, it will be recognized as being an ethical

institution, which in turnwill enhance the trust it engenders, and, therefore, the support it

can attract. A number of ethical decision-making models exist. Adopting a decision-

making model will ensure that a methodical approach is used and that the incidents of

rash decision-making will be reduced. Using an ethical decision-making model will help

individuals arrive consistently at the best solutions to ethical dilemmas, defend those

decisions, enhance public trust, secure more donors, and raise more money. The value of

sound decision-making and effective ethical decision-makingmodels are reviewed in this

paper.

Copyright # 2005 John Wiley & Sons, Ltd.

Introduction

True development professionals want tobehave ethically. Most believe they are alreadybehaving ethically and striving to make correctchoices. However, great challenges stand inthe way between the desire to make ethicaldecisions and the ability to actually do so.Extreme goal pressures, lack of experience,dilemmas without clear solutions, superiorswho do not understand fundraising and theethical standards associated with it, and othercomplicationsconspire tocomplicate the lifeofeven the most ethical of fundraisers. The

unfortunate result can be less than idealdecisions that are difficult to justify and whichkeep a nonprofit organization from realizingits full fundraising potential. Fortunately, byrelying on a strong code of ethics and a sounddecision-making model, those who want tobehave ethically will be well equipped tomakehighly ethical, defensible, and productivedecisions. By making the best possible deci-sions, development professionals will generatemore donors and raise more money for theirorganizations while enhancing their ownmarketability as ethical and highly successfulprofessionals.

Misconceptions

The major obstacles to the study of ethics in-clude a number of significant misconceptions

—————*Correspondence to: Michael J. Rosen, CFRE, ExecutiveVice President, Client Development, Legacy Leaders Inc.,525 South Fourth Street, Suite 585, Philadelphia, PA19147–1581, USA. E-mail: [email protected]

Copyright # 2005 John Wiley & Sons, Ltd. Int. J. Nonprofit Volunt. Sect. Mark., August 2005

on the subject (Daigneault and Navran, 1998).By looking beyond these common misconcep-tions, professionals can learn the benefits ofstrong ethical decision-making and how tomake the best choices.Believing that ‘‘good’’ people do not need to

worry about ethics training, many often ignorethe subject relying instead on their reflexeswhen challenged. The reality is that learningabout ethics and sound decision-making helpsgood people to take the kind of action theyaspire to take when faced with complexsituations. In addition, by following a code ofethics and taking a deliberative approach todecision-making, fundraising professionals willbe able to make the best possible choice evenwhen faced with no clear correct answer andwill be in a better position to justify thatdecision to the organization’s stakeholders.For many, making sound ethical decisions

is simply a matter of common sense. Thesepeople believe Walt Disney’s Jiminy Cricketwhen he says, ‘‘Let your conscience be yourguide.’’The Association of Fundraising Professionals

offers a number of relatively simple suggestionsfor testing decisions:‘‘The Vision Test—Can you look yourself in

the mirror and tell yourself that the positionyou have taken is okay? If not, don’t do it.‘‘The What-Would-Your-Parents-Say Test—

Could you explain to your parents the rationalefor your actions? If you could look them in theeye and not get a quizzical response, or be sentto your room, then proceed.‘‘The Kid-On-Your-Shoulders Test—Would

you be comfortable if your children wereobserving you? Are you living the exampleyou preach?‘‘The Publicity Test—Would you be comfor-

table if your decision appeared on the frontpage of the [newspaper] tomorrow? Or wasmentioned on the nightly news?’’ (Rohrbach J.2001. Ethics and philanthropy: looking at somefundamentals and emerging issues, lecturedelivered at the AFP Franklin Forum).However, while common sense is important

to resolving ethical dilemmas, it is a limitedtool. ‘‘Testing’’ decisions is also of limited value

unless a sound decision-making process haspreceded it. Frequently, an ethical dilemmawill involve conflicting values for the individualor a conflict between the individual’s personalvalues and those of the organization. Also, anethical dilemma could involve an issue that isbeyond the individual’s experience and, there-fore, beyond ‘‘common’’ sense.

Others believe that if something is legal, it isethical. The reality is that society first decideswhat is ethical or unethical, and then maychoose to codify that into law. Therefore,manythings remain unethical despite the fact thatthey might be perfectly legal. For example,development staff members who receivecommission-based compensation linked tothe money they raise are operating legally invirtually all countries despite the fact thatmost fundraising codes of ethics from aroundthe world frown on this practice. Makingmatters even more complex is the fact thatpolitical fundraising is most often regulateddifferently and guided by a different set ofethical standards around the world. For ex-ample, commission-based compensation is acommon practice when paying political fund-raising staff.

Perhaps, themost dangerousmisconceptionabout ethics is the belief that it is a soft issuethat does not directly impact organizations.The reality is that organizations that are perce-ived of as ethical will attract more volunteers,recruit better staff, and even raise more moneythan would otherwise be the case.

Benefits

A study conductedby researchers at theHenleyManagement College in the United Kingdomfound that ‘‘there would appear to be arelationship between trust and a propensityto donate’’ (Sargeant and Lee, 2002). Trustcannot be assumed; it must be earned. Cha-rities enjoy somewhat higher degrees of publictrust comparedwith government, banks/build-ing societies, insurance companies, policeforces, armed forces and utility companies(Sargeant and Lee, 2002). However, nondonorsplace significantly less trust in charities than do


176 M. J. Rosen

donors. If nonprofit organizations are to attractnew supporters, they will need to developmethods to build public trust. Furthermore,‘‘there is some indication here that a relation-ship does exist between trust and amountdonated, comparatively little increases in theformer having a marked impact on the latter’’(Sargeant and Lee, 2002). So, trust impactsboth propensity for giving and the amountgiven.According to a report issued by Independent

Sector, a United States based coalition of over700 major nonprofit organizations, founda-tions and corporations, ‘‘The public is demand-ing a greater demonstration of ethical behaviorby all of our institutions and leaders . . . . Tothe extent the public has doubts about us, weshall be less able to fulfill our public service’’(Independent Sector, 2002).When trust is compromised, fundraising

efforts can be negatively impacted even ifthe mistrust is unjustified. For example, inScotland in May 2003, The Sunday Mail

newspaper published a report highly criticalof the professional fundraising companySolutions RMC and its work for a breastcancer research charity. The controversy hadan impact throughout the charity sector inScotland, even impacting charities that neverworked with Solutions RMC. Some cancercharities saw a downturn in contributions ashigh as 30 percent in the months followingthe controversy. By year-end, as public trustbegan to recover, so did giving (Watt A.2004. Ethical fundraising: what are thechallenges facing an individual in develop-ing an organizational ethical policy?,lecture delivered at the AFP InternationalConference).Simply put, when the public has less

confidence and trust in individual charities orthe sector as a whole, they give less; whenconfidence and trust increase, so does giving.‘‘In IS’s latest study of giving and volunteering,conducted in 2001, those who have a highconfidence in charities as well as believe intheir honesty and ethics give an average annualcontribution of about $1800. This is about 50percent greater than the amount givenby those

sharing neither opinion, who average just over$1200 in annual household contributions tocharity, once again underscoring the strongconnection between public trust and giving’’(Toppe and Kirsch 2002).

Individually andcollectively, nonprofitorgan-izations can do many things to build publictrust. In particular, nonprofit organizationsmust work to convince donors that the moniesdonatedwill get through to and have an impacton those receiving service from the charity.Individuals alsowant charities to communicatemore effectively and to solicit with lesspressure. ‘‘It would further appear that wheredonors believe that the management of aparticular organization exercises good judg-ment, higher levels of trust may result’’(Sargeant and Lee, 2002). In short, one way inwhich organizations can enhance the publictrust is tomaintain thehighest ethical standardsand to communicate this commitment todonors and prospective donors.

Codes of ethics

Codes of ethics provide valuable guidelinesfor ideal behavior. Maintaining an organiza-tional ethics code and communicating it to allstakeholders can enhance trust in the organiza-tion. In particular, it is important for thoseresponsible for resource development to sub-scribe to a fundraising ethics code as stafftries to enhance relationships with donors andprospective donors. Subscribing to an ethicscode andmaking ethically sound decisions canbuild public trust.

Professional fundraising associations aroundthe world maintain ethical codes. In 2003, theAssociation of Fundraising Professionals, theInstitute of Fundraising (UK), and the Fundrais-ing Institute of Australia hosted the firstinternational summit meeting of professionalfundraising associations from 21 nations. Areview of the 10 ethics codes submittedrevealed great similarities despite the culturaldifferences among participants. At the secondsummit held in October 2004, participantscreated a taskforce to prepare a draft interna-tional code of fundraising ethics.


Guide to ethical decision-making 177

Using a code of ethics can help fundraisingprofessionals make sound decisions. Codesprovide clear answers to some questions onwhat is right or wrong. For example, the AFPCode of Ethical Principles and Standards ofProfessional Practice are quite clear on thequestion of whether development staff shouldbe compensated with commissions based onmonies raised; AFP clearly rejects commission-based compensation (AFP, 2002). Sometimes,codes are less specific but nevertheless provideuseful guidelines when dealing with an ethicaldilemma.‘‘I tell people all the time that a code is a

guide andwhile it sets parameters for behavior,there will almost always be gray areas. Ethics isabout every day choices, and some are clearand others are not. For this reason, no code canaddress all ethical dilemmas. The code canprovide guidance, but it is not definitive’’(Maehara PV. 2003. CFRE, CAE, President andCEO of AFP, November 14), says PauletteV. Maehara, CFRE, CAE, President and CEOof AFP.While ethics codes can inform the decision-

making process, codes cannot be relied toalways provide the answers themselves. Tomake the best possible decisions when theanswer does not rest explicitly in a code and

when a clear answer is not readily at hand, adecision-making methodology can help theperplexed and ensure all stakeholders that theethical dilemma will be resolved with greatthought rather than whim.

Decision-making models

To helpmaintain and enhance the public trust,organizationsmustmakehigh-quality decisionson a consistent basis. Arriving at the bestpossible outcome, rather than a merely satis-factory solution, requires a detailed decision-making framework. It requires taking thenecessary time, gathering critical information,and involving the appropriate stakeholders.‘‘Organizations that routinely utilize ethicaldecision making practices will be much betterprepared to handle a crisis when it hits’’(Independent Sector, 2002).

Dr. Marilyn Fischer believes, ‘‘Making a goodethical decision rests, in part, on whether onehas asked enough good questions’’ (Fischer,2000).Whenmaking decisions, she argues thatone should consider three ultimate areas ofconcern: organizational mission, relationships,and personal integrity. When confronted byan ethical dilemma, first clearly identify theproblem. Then, using a chart (Figure 1) note

Figure 1. Ethical decision-making chart


178 M. J. Rosen

all possible resolutions for the case. Be sure toconsider the absurd as well as the obvious. Byconsidering the full range of possibilities one ismore likely to exercise greater creativity thanwould be possible if operating with filters. Inaddition, by including obviously unethicalalternatives, insights that can apply to lessclear-cut solutions will be discovered and thetask of identifying better solutions will beeasier. Once all possible solutions are notedacross the top of the chart, one is readyto answer a series of questions, one possiblesolution at a time.Organizational Mission: Does this alternative

promote or detract from the organization’smission? Basic philanthropic values? How doesthis alternative affect those ultimately receivingthe services?Relationships: Does this alternative strength-

en long-term relationships with colleagues,donors, volunteers, and community members?Personal Integrity: In what ways does

this alternative help or not help you developinto the person you want to become? Howdoes it strengthen or weaken your ownintegrity?When answering the above questions, one

will be informed by his or her organization’sculture, professional code of ethics, generalcultural mores, and personal religion andvalues. Unfortunately, despite all of the inputsand a carefully implemented methodology, an‘‘ethically correct’’ decision will seldom beyielded. Instead, arriving at the ‘‘best’’ decisionmay leave one still feeling a bit uneasy. Yet, thegoal is to indeed arrive at the best possibledecision rather than a possibly elusive ethicallyperfect decision. By weighing the ultimateconcerns of all stakeholders and consideringthe full facts of the particular situation, onecan arrive at a reasonably sound conclusion.Despite a complex methodology, decision-making always remains a matter of judgment.Frequently, there may be no one right answer.However, plenty of wrong alternatives willbe identified and, after careful reflection onthe situation in terms of the three ultimateconcerns, thewrongness of thewrong answerswill be clearer. The decisionmakerwill then be

free to choose from among the other alter-natives with sensitivity and sound judgment(Fischer, 2000).

The Josephson Institute has developed yetanother model (Josephson, 2002) for ethicaldecision-making. While not specifically de-signed for fundraising professionals as theFischer Model was, it nevertheless can be ofvalue to the profession and, in some ways,complements the Fischer Model. The first stepis to ‘‘Stop and Think.’’ Many inappropriatedecisions are the ones made in haste. By takingapause, one is less likely tomakea rashdecisionbased upon anger, convenience, pressure, orother urgent stimuli. Taking the time to actuallythink through a situation is what actuallyengages an effective decision-making process.

The second step is to ‘‘Clarify Goals.’’ This isan important step because it allows one toconsider both the short- and long-term impactsof one’s actions. In the case of fundraising, itallows one to consider both fundraising goalsas well as broader institutional goals, bothshort- and long-term.

The third step is to ‘‘Determine the Facts.’’One should identify what one knows and thenwhat one needs to know. Once information iscompiled, the credibility of sources must beconsidered. Also, information from differentsources may present different and, at times,conflicting details about the same topic.Determining what information is valid is partof the decision-making process.

The fourth step is to ‘‘Develop Options.’’One should identify as many potential optionsas possible given the facts at hand. To develop amore complete list, one can consult with otherstakeholders. The objective is to try to identifyseveral options and not just one or two.

The fifth step is to ‘‘Consider the Options.’’By visualizing the consequences of each option,one can better identify the best solution.Whenconsidering the various options, one shouldconsider how it would impact all stakeholders.Also, one should filter the options using thefollowing values: trustworthiness, respect,responsibility, fairness, caring, and citizenship.

The sixth step is to ‘‘Choose.’’ In otherwords, this is the step where one actually



makes the decision by selecting one of theoptions to implement. To help with thedecision, one can enlist the input of well-respected individuals. One can also test thequality of the decision by asking: What wouldthe most ethical person you know do? Whatwould you do if youwere sure everyonewouldknow? Does it fit the Golden Rule: do untoothers, as you would have them do unto you?Although the sixth step involves choosing an

option, the process does not end. The seventhstep is to ‘‘Monitor and Modify.’’ ‘‘Since mosthard decisions use imperfect information and‘best effort’ predictions, some of them willinevitably be wrong. Ethical decision-makersmonitor the effects of their choices. If theyare not producing the intended results orare causing additional unintended and un-desirable results, they reassess the situationand make new decisions’’ (Josephson, 2002).

Conclusion

Maintaining and enhancing public trust isessential for organizations that want to raisemoney.Oneway to build trust is to consistentlymake high-quality decisions. If an organizationconsistently makes highly ethical decisions,can defend those decisions, and is seen asbeing careful and deliberative when acting,that organization will engender greater publictrust. While other factors certainly impacttrust, ethical decision-making is a criticalelement.The greater the level of trust that a prospec-

tive donor has in an organization, the morelikely that individual is to make a donation, andthe larger that donation will be. ‘‘Trust is theultimate goal in any solicitation. Once you havethe person’s trust, you will most likely have apositive response’’ (Bowden, 2004).Unfortunately, a vast segment of nondonors,

and even many donors, remain distrustful ofthe nonprofit sector. To be successful, charitymanagers, and fundraising professionals inparticular, will need to identify ways to buildtrust between the organizations and donorsand potential supporters. There are a variety ofmethods for building trust. Fundamentally,

making ethically sound decisions will helpbuild public confidence in an organization.

By committing to a code of ethics or stand-ards of professional conduct, by communicat-ing this commitment, and by using these toolsamong others to inform a sound decision-making process, nonprofit organizations canachieve stronger fundraising results.

The benefits for development professionalsare many. By utilizing a decision-making meth-odology, one will make better decisions. Thisin turn will help the individual be moresuccessful in their professional efforts whileremaining sensitive to one’s own values. It willalso help the individual to defend controversialdecisions and towithstand pressure fromotherstakeholders with more narrowly definedagendas. This will enhance the fundraisingprofessional’s job security and professionalreputation thereby enabling smoother careeradvancement.

The public trust is essential for nonprofitorganizations to provide their services in aneffective way. Trust is also essential if charitiesare to raise the financial resources necessary toachieve theirmissions. By building a reputationfor making consistently good ethical decisions,nonprofit organizations and the individualswho work for them, will be better positionedto work with the public. The success thisbreeds will further engender greater levels oftrust and, therefore, a cycle of increasing trustand success will be engaged.

Biographical note

Michael J. Rosen, CFRE is Executive VicePresident of Client Development at LegacyLeaders Inc. He is a member of the board ofthe Association of Fundraising ProfessionalsPolitical Action Committee, Jewish Federationof Greater Philadelphia, and the PennsburyScholarship Foundation. He is a former boardmember of the AFP Foundation for Philan-thropy and the AFP Greater PhiladelphiaChapter. He is the author of the ‘‘World View’’column in Advancing Philanthropy magazineand a contributing author to the bookMember-ship Development: An Action Plan for Results.


180 M. J. Rosen

He lectures internationally and teaches ethicaldecision making at Villanova University.

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AFP. 2002. AFP Code of Ethical Principles and

Standards of Professional Practice. AFP:

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Daigneault MG, Navran F. 1998. It just ain’t so:

debunking common ethical myths. The Nonpro-

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Fischer M. 2000. Ethical Decision Making in

Fundraising. JohnWiley and Sons: Hoboken, NJ.

Independent Sector. 2002. Obedience to the

Unenforceable: Ethics and the Nation’s Volun-

tary and Philanthropic Community. Indepen-

dent Sector: Washington, DC.

Josephson M. 2002. Making Ethical Decisions. The

Josephson Institute of Ethics, Los Angeles, CA.

http://www.josephsoninstitute.org/MED/MED-

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Sargeant A, Lee S. 2002. Improving public trust in

the voluntary sector: an empirical analysis.

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tary Sector Marketing 7(1): 68–83.

Toppe C, Kirsch A. 2002. Keeping the Trust:

Confidence in Charitable Organizations in an

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doing well by doing right: a fundraiser’s guide to ethical...

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