Model fundraising code helps organizations stay legal and accountable
July 16, 1997; Canadian FundRaiser
In a combined effort by the Canadian Centre for Philanthropy and Revenue Canada, consultations are being held in communities across Canada to introduce charities to a new Draft Model Code on Fundraising developed by the Centre. The meetings are partnered with explanations by Revenue Canada officials of the details of the new, longer T3010 Charity Information Return Form, as part of an overall Centre program to "address concerns about charities' accountability in a way that does not require more legislation."
According to Gordon Floyd, the Centre's Public Affairs director, research indicates that more donor confidence leads to more and larger donations. Speaking to the recent Vitalize conference in Calgary, Floyd said that input for the draft has come from charity leaders and members of the Centre, and that he hopes that the final version will get wide acceptance from the governing boards of charities throughout Canada, which ultimately will be responsible to ensure adherence to the Code. The opportunity for charity boards to self-regulate their fundraising practices, he pointed out, will complement the various codes of ethics to which professional fundraisers already adhere.
A wide acceptance of this document, Floyd argues, may also eliminate the possible need for strict government measures in future, similar to those which have been introduced in the United States. The consultations ran throughout the spring and into June, and after revisions this Summer, the Code will undergo further discussion at meetings in the Fall.
Draft Model Code for Fundraising Accountability
[Name of charity] ______________________________, (Charitable Registration Number ____________________________ ), adheres to the following policies in its fundraising activities:
A. Use of Funds
- All donations will be used to further the mission and charitable objects of the charity.
- All designated donations will be used for the purposes for which they are given; alternative uses will be negotiated with the donor if necessary due to program or organizational changes.
- The charity's financial affairs will be conducted in an effective and responsible manner, in accordance with accepted principles of financial management, accounting procedures, and operational policies, including the provisions of this Model Code for Fundraising Accountability.
- The amount spent on administrative costs, including fundraising, will be equivalent to or less than legal limits.
B. Donors' Rights
- All donors are entitled to receive a charitable donations tax receipt.
- Donors and prospective donors will never be subjected to coercion or undue pressure.
- Donors will be encouraged to seek independent advice concerning any proposed gift that might significantly affect the donor's financial position, taxable income, or relationship with other family members.
- All reasonable efforts will be taken to honour any request by a donor to be excluded from lists that the charity uses or shares with other organizations.
- All reasonable efforts will be taken to honour any request by a donor or prospective donor not to be contacted in future fundraising campaigns.
- All reasonable efforts will be taken to honour any request by a donor not to be contacted at home by telephone or other technology; also, all reasonable efforts will be taken to honour requests from donors who are contacted by telephone to receive printed material concerning the charity.
- Any confidential information from or about donors that is obtained by, or on behalf of , the charity shall not be disclosed without the express consent of the donor.
- All fundraising appeals by or on behalf of the charity will disclose the charity's name, its status as a registered charity, and the purpose for which funds are requested.
- Donors and prospective donors are entitled to the following, on request and at no charge other than cost of reproduction and distribution:
- the charity's most recent annual report and/or audited financial statements;
- the charity's most recent Charity Information Return (T3010) as submitted to Revenue Canada, (except the confidential schedules);
- a list of the names of the members of the charity's governing board;
- a copy of this Model Code and information about the process for registering complaints about violations of it.
- Donors and prospective donors are entitled to know, on request, whether the individual asking for funds is a volunteer or a paid fundraiser.
C. Fundraising Practices
- Volunteers, staff and consultants who solicit or receive funds on behalf of the charity shall:
- act with fairness, integrity, openness, and in accordance with all applicable laws;
- have no vested interest in a donor's gift that could result in personal gain;
- disclose immediately to the charity any actual or apparent conflict of interest;
- not accept gifts for purposes that are inconsistent with the charity's mission.
- Fundraising solicitations will be truthful, accurately reflect the charity's mission and use of solicited funds, respect the dignity of those who benefit from the charity's activities, and neither exaggerate past achievements nor promise unrealistic results.
- Paid fundraisers, whether staff or consultants, will be compensated by a reasonable salary, retainer or fee, and will not be paid finders' fees, commissions or other payments based on either the number of gifts or the value of funds raised; any performance-based compensation (such as bonuses will be consistent with the charity's compensation policies that apply to non-fundraising staff.
- The charity will maintain control and ownership of its charitable assets, including its fundraising revenues and donor list.
D. Financial Disclosure
- Financial reports will be factual and accurate, and will not knowingly contain misrepresentations or material omissions.
- Fundraising revenues will be reported in accordance with the guidelines established by the Canadian Institute of Chartered Accountants.
- Government grants or contributions will be reported separately of other fundraising revenues.
- Financial reports will disclose both the total amount of any fundraising costs that are allocated to other program expenses, and the total amount of any overhead or administrative costs that are allocated to fundraising expenses.
- If any fundraising revenues are reported net of expenses, the gross amount of fundraising revenues will also be disclosed.
- All promotional material and tickets for fundraising events will disclose the actual amount of the ticket or admission price that is receiptable as a charitable donation.
E. Accountability & Enforcement
- Each member of the governing board will function as a steward and trustee of funds donated to the charity.
- The governing board will annually review the cost-effectiveness of the charity's fundraising activities.
- The governing board will establish the charity's policies concerning external financial reporting including policies concerning the reasonable allocation, if any, of overhead costs to fundraising expenses, and of fundraising expenses to the charity's other programs.
- The governing board will establish the charity's policies concerning the use of donor's names, including policies concerning sharing or rental of donor lists.
- Each member of the governing board will receive a copy of this Model Code upon assuming office.
- When any member of the governing board is informed of an alleged breach of this Model Code by any person acting on behalf of the charity, the entire board at its next meeting shall be informed of the allegation and any other relevant information, and the governing board shall determine whether procedural, legal, disciplinary or other corrective action is required.
For more information, or to offer comments or suggestions, contact Gordon Floyd, Canadian Centre for Philanthropy, 200-1329 Bay St, Toronto, Ontario, M5R 2C4. Telephone (416) 515-0764; Fax (416) 515-0773; eMail ccp@ccp.ca.
