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ASU Lodestar Center Blog

The ethics of nonprofit fundraising

fundraising ethics

It can be hard to imagine fundraising as an unethical practice. When most think of a fundraiser, innocent things come to mind: a bake sale, a raffle, a gala or even a social media challenge. But even for mission-driven charitable organizations, fundraising efforts can sometimes go too far and become predatory, exploitative and altogether unethical. Below are some guidelines to keep a nonprofit’s fundraising practices both ethical and effective. 

Avoid aggressive tactics 

The controversial tactic of street fundraising, while often very successful, is also often cited as a widely disliked fundraising method by the public. The 2000s and 2010s brought plenty of ire against “chuggers,” so-called charity muggers who engage in aggressive on-the-street fundraising tactics. Today the modern “chugger” has, arguably, gone digital. Online fundraising initiatives through email campaigns, phone calls, mass texts and more put a campaign in front of as many eyes as possible but at the cost of, at best, annoying and, at worst, harassing many uninterested parties in the process. These methods even have the potential to violate federal law when done incorrectly. 

Balancing the value of gaining more funding with the downside of spamming potential donors, either in-person or online, is a subjective matter. However, it is still possible to maximize the positive impacts of this type of fundraising while minimizing the negative. To avoid negative impacts from fundraising efforts, remove uninterested and inactive people from your phone and mailing lists over time, take “no” for an answer when fundraising in person, and think strategically about who you reach out to for donations.

Practice transparency

Fundraising that seeks donations while lying about facts, omitting the truth, exaggerating information or any other dishonest tactic is unethical. Being informed of an organization’s mission, allocation of donated resources, and capacity to use those resources is a core tenet of the Donor Bill of Rights, a list of ethical expectations for donors created by the Association of Fundraising Professionals, Association for Health Care Philanthropy, Council for Advancement and Support of Education and the Giving Institute. When subjected to misinformation, donors are not only robbed of their money but also their autonomy, making building an informed donor base a critical component in ethical fundraising. 

Even if unintentional, any nonprofit has the potential to be dishonest in its fundraising tactics. One of the greatest defenses against the possibility is building transparency into the organization’s values and structure, so donors can make independently guided decisions about their giving. Information about the mission statement, programs, budget, and services offered by a nonprofit should be easily accessible to the public. It is also important to candidly inform donors about how their contribution will be used. By creating a transparent framework in an organization, nonprofits and their donors can avoid misunderstandings and misinformation throughout the fundraising process. 

Understand laws and regulations

While a fundraiser can be a practice in creativity, there are still rules to follow. Laws and regulations often vary by state, but each has a unique method of protecting vulnerable populations and limiting potentially addictive practices such as gambling in a fundraising campaign. Arizona state law, for example, does not require registration before soliciting donations. Before starting any fundraising initiative, it is important to be familiar with the laws of your state.

Image by Lillian Finley


Learn more with the Nonprofit Fundraising and Sustainable Financial Management Certificate

Want to learn more and gain skills in fundraising, strategic planning, financeial management, and board governance? Then the Nonprofit Fundraising and Sustainable Financial Management Certificate. Course content includes the most highly relevant topics needed to lead and manage the fundraising efforts for a nonprofit organization.

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ASU Lodestar Center Blog