Fundraising: When do you take the money?
This issue emerges at some point in every senior fundraiser’s career. Do you take the money from that individual? Will an investment from that company undermine your cause or support elsewhere?
=mc's Angela Cluff and Mark Astarita from the British Red Cross give their expert advice...
The starting point for any discussion about whether or not to accept money is an understanding of charity law. This demands that the Trustees of every charity maximises the resources available to the charity. In practice this means there should be a mindset of accepting donations, unless there are persuasive reasons why not.
As Angela explains, there are 3 reasons to decide to refuse a donation:
- the money is from an illegal source
- the source of the money is in direct conflict with the charity's aims
- to accept the money would be counterproductive – it would result in loss of support from other sources greater than its benefit
Who makes the decision? Trustees! How? In the best interests of the charity
Charity law dictates that the Board of Trustees of any charity has a duty to maximise support for the charity allowing maximum expenditure on its charitable objectives. In practice this means that funding relationships should always be entered into unless there are valid and persuasive reasons not to do so.
These reasons can be of an ‘ethical’ or ‘reputational’ basis, driven by factors such as: if the objectives of the donor are incompatible with the charitable objects of the charity, or if the cost of accepting a donation would be greater than the value of the funding itself.
Therefore, a decision must be made regarding each donor, whether an individual or a company, which considers both the method through which the donor raised those funds and their reputation and standing with the public.
Sounds easy? Perhaps not!
So, how does charity law actually impact on each charity's objectives? And how can these guidelines be applied to day-to-day fundraising?
We spoke to Mark Astarita, Director of Fundraising for the British Red Cross Society (BRCS) to share his approach to handling potentially controversial donations. He explains charity law raises a number of considerations, some of which are unique, some of which will resonate with other charities.
As part of a global voluntary network, the BRCS provides help to victims of armed conflicts, natural disasters and individual emergencies throughout the world. We need to consider whether the business practices through which the money was raised are compounding these crises. Examples of this might include money raised through the manufacture or sale of arms, or business practices that restrict access to drugs or cause large-scale damage to the environment.
The BRCS is part of the International Red Cross and Red Crescent Movement. Members have special, internationally recognised roles, including during armed conflicts. “Neutrality”, is one of the organisation’s fundamental principles, and is essential to our ability to carry out our humanitarian work effectively. Our neutrality could be severely undermined if we entered into a funding relationship with a donor whose own public image could affect adversely the perception of the BRCS's neutrality.
In order to fulfil their special roles, Red Cross and Red Crescent organisations have the privilege of using the same emblem as the medical services of armed forces. The unique status of this emblem is crucial to the safety both of our personnel and those whom we seek to help. It is essential that no funding partnership undermines the unique standing of this emblem. An example could include its use in conjunction with a food product where it could be interpreted to imply a health value that is not substantiated.
We rely on the continued support of the public, for example our 190,000 regular givers. We would, therefore, not accept donations from a source whose reputation or standing with the public is such that a relationship would lessen public respect for the Society and, thus, be more costly than profitable.
At the BRCS, these decisions have been translated into a thorough and autonomous ethical screening policy and process.
A report is carefully researched for each prospective or existing donor over £10,000. The report considers each of the areas raised above and ensures that evidence is gathered to give a balanced view of any areas of concern.
This report is reviewed by a panel of Trustees who make the decision as to whether a relationship is to be undertaken at that time. Key to the process is that each donation is considered on a case-by-case basis and reviewed annually, as opposed to having a published list of sources from which funding will be refused. This allows consideration to be given to any change in business practice so that viable funding opportunities are not missed in the future.
So, it seems the answer lies within careful consideration among the charity's board of trustees, weighing the charity's objectives and reputation. It won't be straightforward process... but then again, who said fundraising was an easy job?
