Association of Fundraising Professionals: Code Of Ethical Principles And Standards

Staying true to our mission to rebuild and restore balance to low-income, marginalized and disadvantaged communities by helping, encouraging, inspiring and empowering women, children, youth and young adults around the world; Phoenix Queens of the Nation understands that having the trust and support of the public is crucial. Resource Development and Volunteer Mobilization are two areas that any well established organization must master in order to effectively manifest their goals and objectives. The Code Of Ethical Principles And Standards from the Association of Fundraising Professionals guides Phoenix Queens of the Nation’s work in the area of Resource Development. We share this information because we are committed to being a transparent organization that does not shy away from being held accountable for our actions. We cannot be effective in our work and gain the trust of those we serve and those who support us if we are not adhering to the most ethical of practices and standards.

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AFP Code of Ethical Principles and Standards

ETHICAL PRINCIPLES • Adopted 1964; amended Sept. 2007

The Association of Fundraising Professionals (AFP) exists to foster the development and growth of fundraising professionals and the profession, to promote high ethical behavior in the fundraising profession and to preserve and enhance philanthropy and volunteerism. Members of AFP are motivated by an inner drive to improve the quality of life through the causes they serve. They serve the ideal of philanthropy, are committed to the preservation and enhancement of volunteerism; and hold stewardship of these concepts as the overriding direction of their professional life. They recognize their responsibility to ensure that needed resources are vigorously and ethically sought and that the intent of the donor is honestly fulfilled. To these ends, AFP members, both individual and business, embrace certain values that they strive to uphold in performing their responsibilities for generating philanthropic support. AFP business members strive to promote and protect the work and mission of their client organizations.

AFP members both individual and business aspire to:

  • practice their profession with integrity, honesty, truthfulness and adherence to the absolute obligation to safeguard the public trust
  • act according to the highest goals and visions of their organizations, professions, clients and consciences
  • put philanthropic mission above personal gain;
  • inspire others through their own sense of dedication and high purpose
  • improve their professional knowledge and skills, so that their performance will better serve others
  • demonstrate concern for the interests and well-being of individuals affected by their actions
  • value the privacy, freedom of choice and interests of all those affected by their actions
  • foster cultural diversity and pluralistic values and treat all people with dignity and respect
  • affirm, through personal giving, a commitment to philanthropy and its role in society
  • adhere to the spirit as well as the letter of all applicable laws and regulations
  • advocate within their organizations adherence to all applicable laws and regulations
  • avoid even the appearance of any criminal offense or professional misconduct
  • bring credit to the fundraising profession by their public demeanor
  • encourage colleagues to embrace and practice these ethical principles and standards
  • be aware of the codes of ethics promulgated by other professional organizations that serve philanthropy

ETHICAL STANDARDS

Furthermore, while striving to act according to the above values, AFP members, both individual and business, agree to abide (and to ensure, to the best of their ability, that all members of their staff abide) by the AFP standards. Violation of the standards may subject the member to disciplinary sanctions, including expulsion, as provided in the AFP Ethics Enforcement Procedures.

MEMBER OBLIGATIONS

  • Members shall not engage in activities that harm the members’ organizations, clients or profession.
  • Members shall not engage in activities that conflict with their fiduciary, ethical and legal obligations to their organizations, clients or profession.
  • Members shall effectively disclose all potential and actual conflicts of interest; such disclosure does not preclude or imply ethical impropriety.
  • Members shall not exploit any relationship with a donor, prospect, volunteer, client or employee for the benefit of the members or the members’ organizations.
  • Members shall comply with all applicable local, state, provincial and federal civil and criminal laws.
  • Members recognize their individual boundaries of competence and are forthcoming and truthful about their professional experience and qualifications and will represent their achievements accurately and without exaggeration.
  • Members shall present and supply products and/or services honestly and without misrepresentation and will clearly identify the details of those products, such as availability of the products and/or services and other factors that may affect the suitability of the products and/or services for donors, clients or nonprofit organizations.
  • Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during and after any sale of materials and/or services.  Members will comply with all fair and reasonable obligations created by the contract.
  •  Members shall refrain from knowingly infringing the intellectual property rights of other parties at all times. Members shall address and rectify any inadvertent infringement that may occur.
  • Members shall protect the confidentiality of all privileged information relating to the provider/client relationships.
  • Members shall refrain from any activity designed to disparage competitors untruthfully.

SOLICITATION AND USE OF PHILANTHROPIC FUNDS

  • Members shall take care to ensure that all solicitation and communication materials are accurate and correctly reflect their organizations’ mission and use of solicited funds.
  • Members shall take care to ensure that donors receive informed, accurate and ethical advice about the value and tax implications of contributions.
  • Members shall take care to ensure that contributions are used in accordance with donors’ intentions.
  • Members shall take care to ensure proper stewardship of all revenue sources, including timely reports on the use and management of such funds.
  • Members shall obtain explicit consent by donors before altering the conditions of financial transactions.

PRESENTATION OF INFORMATION

  • Members shall not disclose privileged or confidential information to unauthorized parties.
  • Members shall adhere to the principle that all donor and prospect information created by, or on behalf of, an organization or a client is the property of that organization or client and shall not be transferred or utilized except on behalf of that organization or client.
  • Members shall give donors and clients the opportunity to have their names removed from lists that are sold to, rented to or exchanged with other organizations.
  • Members shall, when stating fundraising results, use accurate and consistent accounting methods that conform to the appropriate guidelines adopted by the American Institute of Certified Public Accountants (AICPA)* for the type of organization involved.  (* In countries outside of the United States, comparable authority should be utilized.)

COMPENSATION AND CONTRACTS

  • Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees.  Business members must refrain from receiving compensation from third parties derived from products or services for a client without disclosing that third-party compensation to the client (for example, volume rebates from vendors to business members).
  • Members may accept performance-based compensation, such as bonuses, provided such bonuses are in accord with prevailing practices within the members’ own organizations and are not based on a percentage of contributions.
  • Members shall neither offer nor accept payments or special considerations for the purpose of influencing the selection of products or services.
  • Members shall not pay finder’s fees, commissions or percentage compensation based on contributions, and shall take care to discourage their organizations from making such payments.
  • Any member receiving funds on behalf of a donor or client must meet the legal requirements for the disbursement of those funds. Any interest or income earned on the funds should be fully disclosed.

Standard No. 1

Members shall not engage in activities that harm the members’ organization, clients, or profession.

Members shall subscribe to and become advocates for the mission and goals of their organization. Members shall conduct their personal and professional lives recognizing that their actions represent the organizations by which they are employed. Members shall respect the wishes and needs of constituents, and do nothing that would negatively impact their social, professional, or economic well-being.

Standard No. 2

Members shall not engage in activities that conflict with their fiduciary, ethical, and legal obligations to their organizations and their clients.

Members shall take care to assure that all legally binding gift planning obligations they propose are prepared or approved by qualified legal counsel. Members shall urge their clients to seek independent, qualified counsel in regard to any legal or fiduciary obligation that a member proposes. Members shall make every reasonable effort to assure that their organization’s fiduciary obligations are held to the highest ethical standards and conform to applicable law. Members shall make every reasonable effort to assure that third party organizations that are appointed to carry out fiduciary obligations on behalf of their organization are held to the highest ethical standards

Standard No. 3

Members shall effectively disclose all potential and actual conflicts of interest;  such disclosure does not preclude or imply ethical impropriety.

Members establish a clear understanding between themselves and their organizations regarding the extent to which members are permitted to engage in outside consulting. Members disclose if they or a member of their immediate family have a material interest in a current or potential vendor firm. Members disclose any formal relationship they may have with a donor, including relationships formed with that donor through previous employment. Members encourage their organizations to adopt policies on conflict of interest. Members understand that effective disclosure includes the sharing of sufficient information to adequately explain the facts so that persons or entities who might be affected by such possible conflicts of interest can make informed decisions. Members understand the provisions of the IRS “Intermediate Sanctions” regulations in the U.S., or their equivalent in other countries, that apply to persons associated with nonprofit organizations who might also benefit from business or commercial arrangements with the organization.

Standard No. 4

Members shall not exploit any relationship with a donor, prospect, volunteer, or employee for the benefit of the member or the member’s organization.

Exploitation in this context includes: (1) taking advantage of, or making use of, another person for one’s own ends; (2) encouraging another person to take action that is to the person’s disadvantage or to the disadvantage of that person’s family; and, (3) encouraging another person to action that would seem, to the reasonable person, contrary to the best interest(s) of the person so encouraged. Members assure that the compelling purpose of gift planning is to ensure that the wishes of the donor or the donor’s representative are carried out, and that the organization receiving the contribution provides services to constituents that are meaningful to the donor.

Standard No. 5

Members shall comply with all applicable local, state, provincial, and federal civil and criminal laws.

Members recognize that compliance with applicable laws and regulations is a clear standard.  Nevertheless, laws regarding fundraising are proliferating, and ethical practitioners, remembering the admonition that ignorance of the law is no excuse, must be alert to new laws. Members consult the legal counsel involved with their own organizations.  Most nonprofit organizations have access to legal counsel, either paid or volunteer.  Member consultants and suppliers of fundraising services also consult legal counsel regarding their contracts and practices.

Standard No. 6

Members recognize their individual boundaries of competence and are forthcoming and truthful about their professional experience and qualifications.

Members state their professional qualifications in a manner that gives a clear and accurate picture of their skills, capabilities, level of expertise, experience, performance, and credentials. Members clearly describe the parameters of their roles within the larger financial development efforts of any organization with which they have been affiliated.

Standard No. 7

Members shall present and supply products and/or services honestly and without misrepresentation and will clearly identify the details of those products, such as availability of the products and/or services and other factors that may affect the suitability of the products and/or services for donors, clients or nonprofit organizations.

a. Members shall assure, to the best of their ability that the representations of their products and/or services which they propose to provide for donors, clients or nonprofit organizations are sufficiently complete and accurate. b. Members shall supply products and/or services which are consistent with the representations made to donors, clients, or nonprofit organizations. c. Members shall clearly and honestly describe their ability to deliver their products and/or services in a timely or complete manner, as well as other factors that may reasonably affect the suitability of the products and/or services. d. As a best practice, business members should state to donors, clients or nonprofit organizations that their companies are bound by the AFP Code of Ethics.

Standard No. 8

Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during and after any sale of materials and/or services. Members will comply with all fair and reasonable obligations created by the contract.

Members shall enter negotiations on a contractual relationship to provide products, materials or services openly and transparently. Members shall respond in a timely manner to requests for information or clarification from a client. Members will provide for an effective method of follow up on the sale and/or implementation of any products, materials or services supplied. Any proposed further charges resulting from this follow up shall be transparently communicated. Members shall honor the explicit obligations of their contract, and work proactively with the client to meet any fair and reasonable requests implied by the contract. Members shall file copies of the contract with all relevant regulatory bodies. Members shall heed national, as well as local (e.g., state, provincial, etc.) contract laws. Reference also Standard 5.

Standard No. 9

Members shall refrain from knowingly infringing the intellectual property rights of other parties at all times. Members shall address and rectify any inadvertent infringement that may occur.

Guidelines Members shall not engage in plagiarism and shall ensure that all materials which they prepare and/or present are original creations, or that the member has appropriate approval of the author/owner to use the material. Members respect all copyrights. Members shall provide appropriate remedy when inadvertent infringement of the intellectual property rights of others occurs, where such IP rights can reasonably be asserted. Members shall adhere to any timelines and/or limitations for usage of intellectual property granted by owner. Members shall not claim ownership of intellectual property when they know that such property is owned by another individual or entity.

Standard No. 10

Members shall protect the confidentiality of all privileged information relating to the provider/client relationships.

Ensuring that all legal requirements concerning privacy, confidentiality and privileged information concerning donors, clients and nonprofit organizations, as well as these ethical standards, are adhered to. Business members are organizationally required by the code, to ensure that their employees uphold this standard. Members urge their organizations to adopt and operate within written policies governing confidentiality of privileged information

Standard No. 11

Members shall refrain from any activity designed to disparage competitors untruthfully.

a. Members shall ensure that any portrayal of competitors is fair, accurate and can be substantiated b. Disparaging competitors is unprofessional and unethical, and reflects badly on both parties and the sector

Standard No. 12

Members shall take care to ensure that all solicitation materials are accurate and correctly reflect their organization’s mission and use of solicited funds. 

Members shall ensure, to the best of their ability,  that the materials upon which individuals make decisions about supporting the member’s organization are direct and truthful. Members shall be forthcoming and accurate when describing their organization’s mission, needs, programs, goals, objectives, and achievements.

Standard No. 13

Members shall take care to ensure that donors receive informed, accurate  and ethical advice about the value and tax implications of contributions.

Members with knowledge of the tax or ethical implications of a potential contribution should realize the limit of their expertise before advising donors about the contribution and should, as a best practice include other professionals in the process. Members always advise donors to seek the advice of their own independent counsel regarding tax and financial implications. Members are mindful of the implication of practicing law without a license when advising donors about legal instruments. Members do not draft legal instruments obligating donors and nonprofit organizations unless legally authorized to do so.. Members relate the specific implications of contributions, providing the prospective donors have been told of the member’s credentials (or lack thereof) and have been encouraged to seek their own independent counsel. Members ensure that appropriate forms are completed and filed in the event of noncash contributions.  They also advise donors of these requirements, if applicable

Standard No. 14

Members shall take care to ensure that contributions are used in accordance with donors’ intentions.

Members ensure that proper documentation outlining the intention and expectation of the donor(s) is provided to all appropriate persons and organizational units within the recipient organization (i.e., development office, accounting office).  This documentation, including copies of all relevant supporting materials, is made a permanent part of the records of such units. Members ensure that contributions are used if and as specified by the donor.  If a donor indicates a use that is inappropriate, the member confers with the donor to determine an appropriate use that is in keeping with the donor’s wishes and the organizational mission. In the event that no mutually satisfactory use can be determined, the member offers to return the donation. Members review documentation outlined in guideline ‘a.’ above on a regular basis to ensure that those responsible for administering contributed funds continue to adhere to the donor’s intentions. Also see Standards No. 10 and 11

Standard No. 15

Members shall take care to ensure proper stewardship of all revenue sources, including timely reports on the use and management of such funds.

Members provide an annual report to donors. This can be included in a general report about the organization or can be included in a constituent newsletter, mailing, etc., which is sent to donors. Members should ensure that donors of endowment funds receive a report on their funds at least annually.  For small organizations, such reporting is recommended as a best practice. Members shall, to the best of their abilities, urge their organizations to adopt and operate within written policies governing planned gifts, donor recognition, vendor transactions, and investments. Members shall maintain written protocols or agreement guidelines for the administration of each restricted fund

Standard No. 16

Members shall obtain explicit consent by donors before altering the conditions of financial transactions.

a.  Members meet with the donor or the donor’s surviving family or representatives to discuss any potential alteration in the original conditions of a contribution. b.  Should changing circumstances on the part of a recipient organization necessitate a change in the prescribed use of an existing gift, the process to be followed in making this change should be captured within the original gift agreement. c.  Members shall accurately characterize the nature of a financial transaction with any party.

Standard No. 17

Members shall not disclose privileged or confidential information to unauthorized parties.

Members do not discuss any information about prospective donors or donors outside the work environment, and they discuss it within the work environment only as appropriate. Members honor and protect donors’ rights to anonymity. Members ensure that prospective donor and donor information is collected lawfully and presented factually. Members balance the obligation of their organizations to collect, record, and make public information with the right of prospective donors and donors to privacy. Members seek and record only information that is relevant to the fundraising efforts of their organizations.  Such information is accurately recorded in an objective and factual manner, and verified or attributable to its source. Members ensure that the collection and use of information are done lawfully.  Further, nonpublic information is the property of the organization for which it is collected and is not to be given to persons other than those who are involved with the cultivation or solicitation effort, or those who need that information in the performance of their duties for that organization. Members ensure that information, including research, about prospective donors and donors are stored securely to prevent access by unauthorized persons. Members give special protection to all giving records pertaining to anonymous donors. Those donors are informed of the organization’s policies regarding access to such information, especially who is to have knowledge of the donor’s identity. Members are respectful of the fact that information about donors and prospective donors is the property of the organization for which it was gathered and is not to be taken to another organization. Members urge the development of written policies at their organizations defining who may authorize access to prospective donor and donor files and under what conditions. Consistent with applicable law, members urge the development of written policies at their organizations defining whether and in what manner to make public information regarding contributions. The provisions of Standard 10 should also be applied as appropriate in conjunction with this Standard

Standard No. 18

Members shall adhere to the principle that all donor and prospect information created by, or on behalf of,  an organization or a client is the property of that organization or client and shall not be transferred or utilized except on behalf of that organization or client.

Members do not physically or electronically remove or transmit information from the possession of a nonprofit organization or client without prior explicit consent. Members encourage the nonprofit organization with which they have a professional relationship to develop written policies concerning the confidentiality of their files and the requirements for gaining access to them. Members whose organizations lease, sell, rent, or exchange their donor lists encourage the authorization of specific agents or employees who can negotiate and sign appropriate contracts for such transactions. Members do not imply information about specific prospects and donors they have learned in the course of work for one organization that would be a benefit to another as a consequence of their employment. Members respect the wishes of donors as to anonymity and the confidentiality of particular details of specific contributions.  The member understands that the relationship between donor and development officer is based upon trust. This standard does not apply to information that is in the public domain.

Standard No. 19

Members shall give donors and clients the opportunity to have their names removed from lists  that are sold to, rented to, or exchanged with other organizations.

Members encourage the development of written policies and practices regarding the use of donor names. Members ensure that donors are informed in accordance with such policies and practices

Standard No. 20

Members shall, when stating fundraising results, use accurate and consistent accounting methods that conform to the appropriate guidelines adopted by the appropriate regulatory body* for the type of organization involved.

Members recognize that fundraising results are recorded both for external financial and audited statement purposes, and for reporting and donor recognition purposes.  Recording for external audited financial purposes must be in accordance with the appropriate AICPA guidelines*, or the requirements of the local legal framework, for the type of institution involved. In reporting fundraising results for external financial and audited statement purposes: (1) Irrevocable unconditional deferred contributions are recognized in the fiscal year in which they are made. The nonprofit organization should recognize contribution revenue and related assets and liabilities. Assets should be recorded at their fair market value. Contribution revenue should be recorded as the difference between the asset value and the net present value of the payout to the beneficiary. Reevaluations should occur each fiscal year and at the time the contribution matures. (2) Unconditional pledges are recognized in the fiscal year in which they are made.  The extent to which multi-year pledges are discounted should be determined with professional advice. (3) Bequests are recognized at fair market value in the fiscal year in which they mature. (4) Insurance policies that are owned by the organization should be recorded at their ash surrender value. (5) Revocable deferred contributions or conditional contributions should be recorded when the contribution matures or when the condition is met. For reporting and donor recognition purposes: (1) For campaign purposes, members may report results over more than one fiscal year. (2) Irrevocable, legally enforceable deferred gifts are counted and reported at a discounted present value only, using IRS calculation methodologies, or the appropriate requirements of the local legal framework. (3) Members may report revocable planned contributions and conditional contributions. (4) Members may report insurance policies at face value. (5) Members may report expectancies from bequests.

Standard No. 21

Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees. Business members must refrain from receiving compensation from third parties derived from products or services for a client without disclosing that third-party compensation to the client (for example, volume rebates from vendors to business members).

Members accept compensation based upon experience, expertise, and the time requirements of the engagement. Percentage compensation is any payment based on the monetary value of contributions; a finder’s fee is a fee paid for bringing a donor or contribution to a nonprofit organization, whether or not the fee is based on a percentage of funds raised. Members, if declining an offer of compensation based upon a percentage of the funds raised, will provide information in support of this standard, such as the AFP Position Paper on Professional Compensation. Members recognize that fundraising is a continuing practice in which present funds received may be the results of efforts of others in previous years, and, likewise, current fundraising activities may result in future funds. Members must not seek, pay, or accept, percentage-based compensation or commissions for obtaining philanthropic funds. Members help organizations recognize that costs involved in fundraising include staff compensation and that donors do accept organizational costs for such activities. Members who offer services as proposal writers must not receive compensation calculated on a percentage of funds sought or raised (e.g., a member who drafts a grant proposal cannot receive a percentage of that grant if it is awarded). Members disclose fully any fees deriving from a third party vendor as a result of the referral of a client if there is a discount for the business member because of the charity aspect of the transaction. A vendor must not profit from a relationship with a charity without disclosing that fact to the charity. If subcontractors to a vendor have provided a discount because of the charity involved then that discount must be transparent between the charity and the vendor

Standard No. 22

Members may accept performance-based compensation, such as bonuses, provided such bonuses are in accord with prevailing practices within the members’ own organizations and are not based on a percentage of contributions.

Members’ freedom to accept performance-based compensation is based on the fact that AFP recognizes that such can be an ethical way to reward practitioners who exceed the scope of effort covered by their established salary or contracted fee. Members may accept performance-based compensation under the following conditions:
(1)  the member’s organization has a policy and practice that awards performance-based compensation; and (2) the policy has the approval of the organization’s governing body; and (3) the policy and practice include, but are not limited to, the member’s area of responsibility (e.g., are a norm within the organization); and (4) the criteria are restricted to mutually agreed-upon, pre-established overall goals; and (5)  the criteria for determining the eligibility for, and amount of, such compensation shall exclude any consideration of a percentage of contributions. This should be interpreted as an absolute prohibition of any reference to, or use of, a percentage of income to determine compensation, either in effect or actuality. Members understand the provisions of the IRS “Intermediate Sanctions” regulations in the U.S., or their equivalent in other countries, that apply to executive compensation.

Standard No. 23

Members shall neither offer nor accept payments or special considerations for the purpose of influencing the selection of products or services

Offering or accepting personal inducements for the purpose of influencing the selection of your services is unethical. The offer or acceptance of payments or special consideration for the purpose of influencing the selection of products or services potentially undermines an organization’s mission. c. Members must not enter into agreements where personal inducements are offered for retaining the member’s services d. Members must not enter into an agreement with prospective clients who require personal inducement as a condition for the business. e. So-called “client loyalty programs” (such as hotel points or airline miles) are exempt provided that they are widely and transparently available to all customers of an organization. f. This standard and the AFP Code do not apply to business to business relationships (e.g., Business A pays an incentive to a 3rd party marketer or a sales representative to generate business leads).

Standard No. 24

Members shall not pay finder’s fees, commissions or percentage compensation based on contributions, and shall take care to discourage their organizations from making such payments.

Members recognize that there are three primary principles underlying this standard: (1)  Philanthropic giving is a voluntary action for the public benefit. (2) The seeking or acceptance of philanthropic contributions should not provide personal gain to anyone. (3) Donors and potential donors must be protected from pressure or coercion. Commission or percentage compensation is any payment based on the dollar value of contributions. A finder’s fee is a fee paid to an individual for introducing an individual donor to a nonprofit organization. A finders fee should not be paid to an individual on the basis of the size of a donation secured. It is acceptable to negotiate a fee for service based on the work carried out by an individual, where that fee has no relation to the subsequent size of a gift, or the outcome of the solicitation efforts. Bona fide transaction fees are not subject to this standard.  Transaction fee(s) include fees for credit card processing, stock transfers, electronic funds transfers, lock boxes, and processing Internet transactions.

Standard No. 25

Any member receiving funds on behalf of a donor or client must meet the legal requirements for the disbursement of those funds. Any interest or income earned on the funds should be fully disclosed. 

a. Members shall establish beyond all doubt the legal requirements, under the jurisdictions in which they operate, for the handling, disbursement and reporting of funds. Ignorance of the law is no defense. b. Members must ensure that all funds received on behalf of a donor or clients are handled strictly in accordance with all duties of care required by law.  In the case of business members, the organizations have the responsibility of ensuring that their employees handle such funds in conformance with those standards of care. c. Members shall accurately and transparently account for all funds received. d. Members must provide regular status reports to donors and clients on whose behalf the member holds funds. e. Members shall clearly communicate to their clients and donors the manner and timelines within which funds will be remitted. f. Members will disclose fully any interest or income earned, prior to disbursement, on the funds held on behalf of donors and clients. g. .Members urge their organizations to adopt and operate within written policies governing the maintenance and disbursement of donor and client funds, including the full disclosure of interest or income earned on such funds