Promoting Excellence and Trust in the Nonprofit Sector

Fundraising and Working with Donors During the COVID-19 Crisis

In the midst of the current coronavirus pandemic, many nonprofits are faced with tough choices related to raising the necessary resources to meet their missions and support the great needs of the communities they serve. The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector provides guidance for how organizations should act when planning resource development and states, “An organization’s resource development program should be maintained on a foundation of truthfulness and responsible stewardship. Its resource development policies should be consistent with its mission, compatible with its organizational capacity, and respectful of the interests of donors, prospective donors, and others providing resources to the organization.”

Some of the decisions nonprofits are grappling with right now relate to special events that have been scheduled for a long time, which are vitally important to raise revenue in support of the organization’s important mission. Many have been forced to cancel events that were to take place in March, April, May, and June. Others are trying to develop contingency plans, expecting the cancellation of important revenue generating events for later summer, fall, and beyond.

Of course, many of these events have been in the planning stages for months and months with some donations and sponsorships already deposited in the nonprofit bank accounts. When faced with the legal and ethical considerations around what to do with such sponsorships for events that will likely be cancelled or significantly altered in light of the global pandemic, we can again turn to the Standards for Excellence code and its encouragement that “nonprofits must honor the known intentions of a donor regarding the use of any and all types of donations  (including but not limited to: cash, in-kind, cryptocurrency, stocks, etc.).”  We must use donations, including sponsorships, in the way the donor intended.

To address fidelity to donor intent, many organizations are reaching out to donors and sponsors who committed to events now cancelled to see if they would approve a change in their contribution from a “purchase of a ticket to attend a gala, dinner or auction” to a “completely tax deductible donation” that is not accompanied by a special dinner or entertainment.  Such outreach helps the nonprofit honor the intention of donors and gives the donors the opportunity to support the work of the nonprofit in a different manner.  

As nonprofits reach out to their donors with these requests, care should be taken to communicate with donors in a way that is respectful and honors the intentions that they initially placed on their gift.Every effort should be made to avoid placing undue pressure on donors in this time when we are all concerned about health, finances, job security, and emotional well-being. Many donors will agree to redirect their gifts, however, others may not wish to do so.  As leaders in the sector, we can use the communication around change of gift intent as an opportunity to deepen our relationships with our donors, and express concern and compassion for their situation at the same time.

 


 

The Standards for Excellence educational resource packet on Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors provides additional background on this subject and includes a helpful Model Solicitation and Acceptance of Gifts Policy.

This educational resource packet and the full series of all packets - including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management - can be accessed by contacting a licensed Standards for Excellence replication partner,- one of the over 150 Standards for Excellence  Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

 

We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

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About the Author: Amy Coates Madsen

Amy Coates Madsen is the Director of the Standards for Excellence Institute, a national initiative to promote the highest standards of ethics and accountability in nonprofit governance, management, and operations, and to facilitate adherence to standards by all organizations. The Standards for Excellence Institute is a program of the Maryland Association of Nonprofit Organizations where Amy has served for more than twenty-two years. Amy is responsible for coordinating all aspects of the association’s comprehensive ethics and accountability program and efforts to replicate the program nationally. She serves as a frequent trainer and writer in the areas of board conduct, program evaluation, program replication, fundraising ethics, and nonprofit management. She has taught courses on nonprofit ethics and accountability at the Johns Hopkins Institute for Policy Studies Certificate Program on Nonprofit Management. She has held positions at the Trenton lobbying firm of the Princeton Public Affairs Group, and the Public Policy Liaison Unit at the world headquarters of Catholic Relief Services. Amy received her Master of Arts in Policy Studies degree from the Johns Hopkins University – Institute for Policy Studies in Baltimore, Maryland; and her Bachelors degree from the Virginia Polytechnic Institute and State University in Blacksburg, Virginia. Amy is a member of Phi Beta Kappa. Amy serves on the Internal Revenue Service Advisory Committee on Tax Exempt and Government Entities (ACT). Amy is a former member of the Disaster Action Team of the Central Maryland Chapter of the American Red Cross and is qualified to provide disaster preparedness training to children and adults. She has also served as the former President of Central Maryland CAN TOO and was a member of the Board of Trustees of the largest United Methodist Church in Baltimore City. She serves on the board of her children’s preschool PTA and is a volunteer with the Girl Scouts of Central Maryland. Amy is currently leading an effort to establish an endowment for the Virginia Tech University Honors Program.