What would you do if a petroleum giant offered your nonprofit £500 of unrestricted funding? What if they offered you £1 million?
Would you accept funding from a bank that invested in harmful sectors?
Would you apply for funding from a charitable foundation with the same investments?
These questions are difficult to answer and ethical dilemmas I know won’t feel new to many fundraisers and their colleagues. Many of us will have different answers or won’t even know the answer – and without further context on each scenario, I’d suggest that we shouldn’t know the answer. Questions about ethical fundraising, and gift acceptance in particular, do not have clear cut, catch-all solutions, but we should at least know the steps we would take to make an informed decision.
For registered nonprofits in the UK, this isn’t just a moral issue – it’s a legal requirement. While the Charity Commission advises that non profits should accept donations by default1, they can refuse or return a donation where it is in their best interests to do so. This includes donations that fall outside their charitable purposes, undermine their independence, or bring unacceptable burdens that outweigh the financial benefits2.
As nonprofits in the environmental sector that means we have a duty not only to stand up for nature through our programmes, but also to make sure that our fundraising does unintentionally back organisations who are actively harming the very work or issue we have partnered with them to deliver. Similarly, as consumers become more conscientious about the environmental and social impacts of their choices, we need to be extra vigilant against businesses who use their support of charities or issue areas as a sales technique rather than a genuine vehicle for good.
At the same time, we are working in a challenging economic landscape during a climate and nature emergency. Our future impact depends on being financially secure today. While accepting a donation may carry risks, there could be greater risks associated with refusing it.
Some say that “beggars can’t be choosers” – but I would argue that we would be doing ourselves and our profession a disservice by describing ourselves as beggars. I think of the words of Henri Nouwen:
“Fund-raising is precisely the opposite of begging. When we seek to raise funds we are not saying, ‘Please, could you help us out because lately it’s been hard.’ Rather, we are declaring, ‘We have a vision that is amazing and exciting. We are inviting you to invest yourself, through your resources, in this work.”
Henri Nouwen, Spirituality of Fundraising
So how do we balance our organisation’s values and reputation with our long-term financial sustainability?
Having clear policies and processes by which we make and document our decisions is key. This “ethical fundraising framework” will look different for every nonprofit, but will usually include a gift acceptance policy and a due diligence process to implement the policy. Plenty of guidance exists to help you develop your own framework (see the “further reading” section below), so I will share ten tips and principles I have found most helpful:
- Avoid copying and pasting. Your ethical fundraising framework should be unique to your nonprofit, shaped around its values, structure and risk appetite. While you may gain insight and inspiration from other nonprofits, what is acceptable to them may not be acceptable to you.
- Include everyone’s voice. Listen to your trustees, funders, team, members and beneficiaries to understand what really matters to them and build your shared values into the framework. This is particularly important when considering funding sources that may alienate your most important allies.
- Embrace discomfort. Discussions about ethics and values can feel very personal, and disagreements are natural. What matters is that we listen with an open mind, gently challenge one another, and are prepared to accept what is best for the cause we serve, even if we may not always agree.
- Draw your lines in the sand. Decide how you define risk and what level of risk triggers the due diligence process. Risk factors could include the gift value, the company structure and ownership, how the funder generates its income, and the risks associated with refusing the donation.
- Spread the responsibility. Include lines of referral to escalate high-risk donations, with highest-risk decisions being made at Board level.
- Create a clear process for making and documenting decisions. This could be a flow chart, benefit/risk analysis or scoring matrix – whatever works best for your team. You should be prepared to respond to anyone who questions your choice and can support your decision with evidence.
- Stress-test your framework. Select a few donors and prospects and run them through the process to check they hold up to scrutiny. For example, would you approach a Lottery funder if your policy flags gambling sources as high risk?
- Review your framework and funder pool regularly. Your policies and processes shouldn’t sit in a folder gathering dust – they should be actionable resources which speak to contemporary challenges and opportunities. A funder who passed your checks five years ago may not do so today – and, conversely, one who previously failed the checks may have improved significantly.
- Ask questions and engage in conversations. The best source of information about the funder is the funder itself. Be transparent about your process and give them a chance to respond to any concerns.
- Finally, and perhaps most importantly, include room for grace. While we should avoid funders who are actively undermining our values, we should also be open to opportunities to educate and include those who genuinely want to do better. Returning to our first example, would you decline a £1 million gift from a petroleum giant if they wanted to work with you to transition to green energy? That’s a scenario with really different answers for different organisations.
Developing a robust ethical fundraising framework is a challenging but essential process which provides your organisation with a clear structure to guide you when making difficult decisions. On a deeper level, it encourages you to define the issues that matter to you, your nonprofit and your wider audiences, and to work with funders who truly care about our planet and its people.
Sources, resources and further reading:
Green Fundraisers Forum (GFF) resources:
Laura Perratt is one of our sub-group leaders for Seed & Share, an ongoing, informal learning series (previously called Learn & Learn). This blog was inspired by a very popular session she ran, ‘Due diligence and ethical fundraising’, which GFF members can watch back. The GFF is open to any individuals and not-for-profit organisations and groups who have environmental work at the core of their mission. Join here to access this recording. GFF members please see the newsletter for the password! Thank you Laura for all your support.
UK Government resources:
- Charities: due diligence, monitoring and verifying the end use of charitable funds by the Charity Commission
- Accepting, refusing and returning donations to your charity by the Charity Commission
- Guide to Charities and Commercial Partnerships by the Charity Commission
Additional resources
- Ethical Fundraising and Due Diligence by Fundraising Regulator
- Free Ethical Sponsorship Policy Framework by Ethical Consumer
- You can find details on the Charity Commission’s website: https://www.gov.uk/government/news/new-guidance-for-charities-facing-decisions-about-donations ↩︎
- You can find details on the Charity Commission’s website: https://www.gov.uk/guidance/accepting-refusing-and-returning-donations-to-your-charity ↩︎