If your nonprofit organization is planning a fund-raising campaign, you may be considering hiring a professional to do the work. Professional fund-raisers conduct campaigns for a fee; often, it's a percentage of the money they collect.
Because the fund-raiser will be representing your organization to potential donors, it's important to investigate every firm you're considering hiring. Inappropriate behavior by a fund-raiser can result in negative publicity for your organization, fewer or smaller donations, and possible legal action involving you and the firm in the case of legal violations.
A little research will help ensure that you're working with a reputable fund-raiser. Contact other nonprofit groups in your area for information and referrals - especially colleges, hospitals and cultural organizations. You also may want to contact your local community fund or an association of professional fund-raisers in your community.
Once you've compiled a list of potential fund-raisers, call them for background information. Get written information about each, including a blank contract. Then, schedule interviews and ask how they would conduct your campaign:
When you're interviewing, be clear that while the fund-raiser would conduct the campaign, you would maintain overall control and expect the company to provide periodic financial reports. Ask to see financial data from other campaigns to get a picture of their successes.
Ask what procedures are in place to make sure that the telemarketer complies with the Federal Trade Commission's (FTC) Telemarketing Sales Rule. The Rule applies to telemarketers hired to conduct inter-state solicitations of charitable contributions by phone. Fund-raisers and any subcontractors must comply with the following requirements:
Many states also have regulations regarding charitable solicitations. Ask whether the telemarketer understands these requirements and how they plan to follow them. Include a statement about adhering to state regulations and federal law in your written contract. In addition, make sure that the materials used by the fund-raiser comply with any state "do not call" law. Some states require paid fund-raisers to identify themselves as such and to name the charity for which they are soliciting, even if the call is in-state. Also, ask whether the company is licensed or bonded - a requirement in many states. To learn about the law in the states where the telemarketer will be calling, contact the state's charity regulator. Links to state charity regulators can be found at the National Association of State Charity Officials Web site - www.nasconet.org.
Ask for references and contact them about their experiences with the company, and whether they have suggestions based on their experience. Check out the company with state and local consumer protection officials, charities regulators and the Better Business Bureau. These organizations can tell you whether they have received consumer complaints about the company. But be wary: the absence of complaints doesn't necessarily mean the company is legitimate. Unscrupulous companies may settle complaints, change their names or move to avoid detection.
Finally, get bids. A reasonable bid is determined by considering many factors: the time and type of labor involved, the nature and duration of the relationship between fund-raiser and client, and the ability and experience of the fund-raising firm. Further, some state laws require nonprofit managers to get competitive bids.
Once you've selected a professional fund-raiser, describe the details of the campaign in the written contract to protect you as well as the fund-raiser. Keep in mind that donors ordinarily expect that most of their contribution will go toward programs and services. The contract should:
Even though you've hired a professional fund-raiser to conduct a campaign, you're responsible for the actions taken on your behalf. Therefore, regular contact with the firm throughout the campaign is a must. Here are some additional tips for quality control:
Several private nonprofit organizations promote standards in philanthropy to evaluate the performance of public-service groups. These standards include guides about the use of professional fund-raisers. For more information, contact:
BBB Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
(703) 276-0100
www.give.org
American Institute of Philanthropy
3450 Lake Shore Dr., Suite 2802 E
Chicago, IL 60657
(773) 529-2300
www.charitywatch.org
If you believe an organization may not be operating for charitable purposes, is making misleading solicitations, or is ignoring requests to be placed on a "do not call" list, contact your state Attorney General, your local consumer protection office or the Federal Trade Commission.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair practices in the marketplace and to provide information to businesses to help them comply with the law. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.