December 20, 2007 | Read Time: 1 minute
The Association for Fundraising Professionals’ renewed call for Congress to ban percentage-based fees for fund raisers has Ken Goldstein pondering a contrary view on his Nonprofit Consultants Blog.
In an previous blog entry, Mr. Goldstein posted an e-mail exchange in which his correspondent argued that small charities may have trouble paying a flat fee to seek grants that may or may not be won. In such cases, the anonymous correspondent argued, “there are times when when contingency or percentage-based fund-raising fees may actually be more ethical than flat fee or hourly rates,” summarizes Mr. Goldstein.
He notes the Association of Fundraising Professionals’ recent plea to Congress to ban the practice of percentage-based pay, quoting the association’s president, as saying that legislation is needed “so that the public can rest assured that charities and their fund-raising firms are putting the needs of donors first.
Mr. Goldstein stumbles over those last words: “Donors first, eh? Not the sustainability of the nonprofit organizations that don’t have the cash-flow to pay upfront for fund raising with no guarantee of success? Not … oh, I don’t know … the clients and communities served by the nonprofit sector?”
Though he stresses that he supports the association’s ethical rules, “I also firmly believe that it’s about time that donors put the needs of nonprofits ahead of their own.”
Is percentage-based fund raising always a bad thing for nonprofit groups? Share your views by clicking on the “comments” link below.
