Ask Boldly: Ethical Fundraising and How to Ask with Integrity

Nonprofits rely on the work of dedicated staff and volunteers and on charitable gifts. When seeking new donors and building relationships with prospective grantmakers and individual donors, it's important to consider how ethics plays a role. To do this well, nonprofits must engage with funders who care about their missions and the communities they serve.

drawing of three people and a donation jar

I recently spoke with a member of TechSoup's development team, Senior Director Kyle Reis, about how nonprofits can successfully navigate the complicated world of fundraising with integrity.

Tell us about your journey to a fundraising role at TechSoup.

For much of my career, I was on the other side of the coin, working at a foundation whose job it was to make grants. When I joined TechSoup, this was the first time that I found myself in a fundraising role. I backed into the role as we were trying to sign up members for a new service, NGOsource, and secure funding to support the service until TechSoup could make it sustainable. This morphed over time into a full-time fundraising role.

Can you define ethical fundraising? How does a foundation approach the topic?

There's the ethics of "what are you fundraising for?" Are you being honest about your nonprofit's work? Is the organization you're fundraising for ethical? Are the funds going where you say they're going when you represent the work to a prospective funder? And what about the foundation you're seeking funding from? One of the things that has always struck me about fundraising is the importance of understanding the way relationships between nonprofits and funders form. Sometimes also it's easy to think of all grants as being equal, but a part of ethical fundraising for me has to do with raising the right kinds of funds from the right kinds of donors.

It seems there are a range of factors at play. What is the most important thing for nonprofits to consider?

Be selective in who you approach for funding. There are certain donors whose motivation for funding may in fact undermine what you are trying to accomplish as an organization. We hear terms like greenwashing and "green funding." There are certain funders I'm not comfortable asking for funds. One gets a sense that their motivation for funding us is less about advancing our mission and more about advancing their own less-than-ethical objectives. I'd like to say that one can easily tell the difference, but I believe it takes intuition and experience to know when the best course of action is to leave the money on the table, even if accepting the grant would help your organization financially.

What might the consequences be when nonprofits do not conduct their own research on potential funders?

Experienced fundraisers "know their audience." One mistake new fundraisers make is to pick the top hundred or so grantmakers and send a generic proposal to all of them. It's important to do your homework first and determine which organizations have strong alignment with your nonprofit's mission and focus. Another challenge that some nonprofits face is when a grantmaker is looking for a nonprofit to take on a specific project or program that isn't what they want to take on or are equipped to do. The challenge is that the prospect of funding makes it appealing to say yes instead of no thanks.

Several things can occur when you do take such funds. One is that you create the program that you say you're going to create and it pulls you away from what you should be doing because you only have a limited number of staff and resources. This is called mission creep. Alternatively, you might shape your proposal in a way that makes it seem like you're going to do one thing, but what you're really hoping and planning to do is something else altogether. This is not only dishonest but will not bode well when it comes time to report on the grant. Of course, the fundraising process is often a process of negotiation, and not everyone will get what they want, but I believe it is best to be upfront from the outset.

Nonprofits are sometimes forced to choose between accepting donations from any willing donor versus finding donors whose focus better aligns with their mission and programs. How would you recommend that they manage this choice?

Fundraisers should do the upfront work they need to do in order to identify grantmakers that are a good fit, i.e., that make the type and size of grant that is likely what you are seeking based on your mission and budget. As you go through the process, think also about a concept I love, coined by the foundation grants managers association, PEAK Grantmaking: the concept of net grant. A foundation, for instance, may make a $10,000 grant to a nonprofit but will require that it jump through so many hoops — such as having onerous proposal and reporting requirements — that when all is said and done the grant will be worth much less than $10,000. In my view, you are better off avoiding these grant opportunities. I think there's an ethic to knowing when the time you might be spending cultivating a smaller, higher-probability grant would be better spent seeking a larger, more aligned but lower-probability grant. Others, however, may not share this view.

What newer techniques should nonprofits be aware of in order to be intentional about fundraising ethically?

Knowing the landscape is really important. The Association of Fundraising Professionals is a good resource for learning about ethical fundraising. One of the things I learned from one of the best fundraisers in the business, Jennifer McCrea, who teaches a course on exponential fundraising, is that when approaching a foundation, you should not start the conversation off with a grant request. First, get to know each other. Find out what goals the foundation has in mind, what it is trying to accomplish through its grantmaking, and talk about how this aligns with the goals your nonprofit is trying to accomplish. This conversation will help your prospective funder get to know your nonprofit and will help you get to know why the funder might be interested in supporting it in the first place. Sometimes there won't be a fit, and that's okay. Best to find this out as soon as possible so you can move on to other funder prospects.

You have mentioned a couple of resources here. What other resources can you direct our nonprofits to?

A great starting point is GrantStation, which provides profiles on current grantmakers and tutorials on how to secure funding. A subscription is available through TechSoup. Another good resource I've found is Inside Philanthropy, which profiles foundations and issue areas but requires a subscription.

Once you have an initial list of 20 to 30 prospects that might be interested in your work, go to their websites and check them out. Look at the grants they've made in the recent past. See if the nonprofits they've supported are doing work similar to what your nonprofit does. Don't spend energy on foundations where there is not likely to be a good fit. Keep at it, and eventually you will have a solid list of funders where there seems to be a good fit. The sooner you are able to focus your energy on this list, the sooner you will achieve success in securing grants.

On the flip side, fundraisers (particularly newer ones) sometimes feel guilty about requesting money from a foundation. They think of it like asking a relative for a loan. Jennifer McCrea reminds us that it is their job to give money away! Grants are their product. If they aren't making grants to support the work of the causes and nonprofits they love, they aren't doing their job. So go into the world and ask boldly!

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