If you are in the market for a professional fundraiser or solicitor, you’re not alone. Most nonprofit organizations have employees or contracts with professional fundraisers or solicitors. When deciding on the appropriate compensation for these services, always keep in mind that the Standards for Excellence® code prohibits percentage-based fundraising. The code states, that “fundraising personnel, including both employees and independent consultants, should not be compensated based on a percentage of the amount raised or other commission formula.” The Association of Fundraising Professionals Code of Ethics also advises against the practice.
Although not illegal, there are more than a few good reasons to pay fundraisers based on the job and not on the amount raised.
Paying by the job can save you money. According to Association of Fundraising Professionals, there is a correlation between charities that have extremely high fundraising costs and those who pay their fundraising firms on a percentage basis. Also, donors might also become disillusioned to learn that 30%, of their donation, for example, will be given to a professional solicitor.
Commissions can lead to a “money over mission” attitude. The practice is also considered unethical because mission tends to takes a back seat to personal gain in these situations, as it creates an incentive for self-dealing.
Fundraising should be a team effort. In the article, Why Good Fundraisers Are Never Paid on Commission , fundraising expert, Kim Klein tells us that the most important reason that commission-based fundraising is a bad idea is that successful fundraising requires coordination between the board, staff, and other volunteers rather than having one person in charge of an entire campaign.
The bottom line is that we encourage all nonprofit organizations to refrain from paying professional solicitors based on the percentage raised or other commission formulas. It is just the ethical thing to do.