Hiring Fundraising Professionals
| Summary: Advice from the FTC about hiring fundraising consultants. Tips on what to look for in a professional fund raiser and what services a fundraising consultant should deliver. |
Hiring a Professional Fundraiser
If your nonprofit organization is planning a fund-raising campaign, you may
be thinking about hiring a professional to do the work. Professional
fund-raisers conduct the campaign for a fee; often it's a percentage of the
money they collect.
Because the fund-raiser will be representing your organization to the public,
it's important that you investigate every firm you're considering hiring.
Inappropriate behavior can result in negative publicity, fewer or smaller
donations, and possible legal action involving you and the firm if the law is
violated.
Choosing A Fund-Raiser Consultant
A little research will help ensure you are working with a reputable fund-raiser.
Contact other nonprofit groups in your area for information and referrals -
especially colleges, hospitals, and cultural organizations. You also may want to
contact your local community fund or an association of professional fund-raisers
in your area.
Once you've compiled a list of potential fund-raisers, call them for background
information. Get written information about each including a blank contract
before you schedule interviews. Ask how they would conduct your campaign.
Would they solicit by phone, mail, door-to-door, or a combination of approaches?
Would they solicit only money or would they also sell products or tickets to
events? What portion of the cost would be the actual contribution?
Beware of companies that promise something for nothing or "easy money." Would
subcontractors be used for any part of the campaign? How would the fund-raiser
make sure its telephone solicitors follow the approved scripts?
Be clear that while the fund-raiser would conduct the campaign, you would
maintain overall control and expect the company to provide periodic financial
reports. Ask to see financial data from other campaigns to get a picture of
their successes. In addition, ask whether the company is licensed or bonded, a
requirement in many states.
Request a list of references and contact them about their experiences with the
company. Ask if they have suggestions based on their experience. Check out the
company with state and local consumer protection officials, charities
regulators, and the Better Business Bureau. They may be able to tell you if
complaints have been registered about the firm.
Finally, get bids. A reasonable bid is determined by considering all the factors
involved: the time and type of labor involved, the nature and duration of the
relationship between fund-raiser and client, and the ability and experience of
the fund-raising firm.
The Fund-raising Contract
Once you've selected a fund-raiser, work out the details of the written campaign
contract, which will protect you as well as the fund-raiser. The contract
should: describe the services to be provided and the financial responsibilities
of each party; authorize or prohibit the use of subcontractors; identify the
compensation to be paid - a flat fee and/or a percentage of the money collected;
require that the fund-raiser use only material reviewed and approved by your
organization when contacting the public, especially telemarketing scripts and
printed materials mailed to donors.
Make sure that these materials comply with state laws; many states require
professional fund-raisers to make certain disclosures, including that a
telephone solicitation is being conducted by a professional fund- raiser.
Descriptions of your organization and what it does should be accurate, as should
representations about the tax benefits of a donation.
Specify the contract period, including the closing and settlement dates; outline
cancellation criteria for both parties; require the fund-raiser to provide
detailed reporting of results throughout the campaign and at its end.
All donor checks should be made out to your organization, not the solicitor. Do
not allow the solicitor to endorse checks. Review sales and other financial
records on a regular basis, perhaps weekly.
Specify ownership of donor lists. Typically, lists belong to the nonprofit. If
you retain ownership and decide to offer your lists for rental or exchange,
consider the privacy of your donors. You may want to offer donors the
opportunity to opt off of lists you furnish to outside mailers and phone
solicitors.
The Fundraising Campaign
Even though you've hired a professional fund-raiser to conduct a campaign, you
are responsible for the actions taken on your behalf. Therefore, regular contact
with the firm throughout the campaign is a must.
If you're conducting a telemarketing campaign, insist that the fund-raiser
institute a system for training and monitoring solicitors to make sure they are
following the authorized script. One method is to call back donors at random to
verify the conversation. Provide the telemarketer with answers for commonly
asked questions.
You also should closely track complaints from the public. If a pattern develops,
review the area that's causing confusion or concern and discuss ways to resolve
the issue with the fund-raiser.
During the campaign, keep tabs on the flow of money. Make sure you get copies of
original invoices as received, paid receipts as paid, bank statements, checks
and deposit slips. Monitor all expenses to be sure they are reasonable and
ordinary. Immediately question any expenses that appear excessive or lack
documentation.
Several private nonprofit organizations promote standards in philanthropy to
evaluate the performance of public-service groups. These standards include
guides about the use of professional fund-raisers.
For more information, contact:
Philanthropic Advisory Service
Council of Better Business Bureaus
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203-1838
(703) 276-0100
National Charities Information Bureau
19 Union Square West, 6th Floor
New York, NY 10003-3395
(212) 929-6300
American Institute of Philanthropy
4579 Laclede Avenue, Suite 136
St. Louis, MO 63108-2103
(314) 454-3040
The FTC works for the consumer to prevent fraudulent, deceptive and unfair
business practices in the marketplace and to provide information to help
consumers spot, stop and avoid them. To file a complaint or to get free
information on consumer issues, call toll-free, 1-877-FTC-HELP (1-877-382-4357),
or use the online complaint form.
The FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into Consumer Sentinel, a secure, online database available to
hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
FEDERAL TRADE COMMISSION
FOR THE CONSUMER
1-877-FTC-HELP
www.ftc.gov
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