One Hand Washes the Other: Making Connections for a Fee

Over the years, I have come to know a number people who sold cars for a living.  Some have been friends who have taken the up the occupation, and some have been individuals who sold me vehicles.  Most of them have offered me money to send any car shoppers I might know their way, and if they buy a car from them, I would get a check for anywhere between fifty to a hundred dollars.  For car salesmen, this is a common practice.  It’s their way of building their client lists through their networks.  I have had similar offers from realtors, only with offers of higher compensation.

In the nonprofit sector, I have heard stories about similar situations where consultants are hired to connect organizations to particular donors.  The organizations were looking to connect with the uber-rich; the Gates, the Knights, and other major one percenters.   I don’t know any individuals personally who do this, so I don’t know firsthand how they are compensated, whether by flat fees or a percentage of the donations received, if the organizations successfully create donor relationships with the targeted individuals.  In any case, if the stories are true, they are violations of AFP ethical standards. 

According to the AFP Code of Ethical Principles and Standards, “Members shall not pay finder’s fees, commissions or percentage compensation based on contributions, and shall take care to discourage their organizations from making such payments.”  Percentage commissions are mentioned a few times in the AFP Code, and they are a big no no, ethically speaking.

But, what about those organizations who ask about specific donors during the hiring process for a new development director, manager, etc?  Shouldn’t that be considered ethically questionable?

In my first post in this series about fundraising ethics, You Can’t Take Them with You, I told the story of a development professional who was hired for the donors they could bring with them from previous positions at other organizations.  Didn’t that hiring organization essentially reward the new director with a salary (finder’s fee) for offering to deliver those wanted donors?  I know it’s one of those “gray” areas, but I certainly must question it.  I do know that the AFP ethics were violated when the potential employee named those donors and said he/she could bring them from their previous employer.

I have had many interviews where the hiring manager or a committee asked if I had any connection to specific individuals or businesses that they wanted to add to their collection of supporters, and I am sure I am not alone.  In some cases, I have had connections to those specifically asked about in my network but I really couldn’t say so, because they were from previous organizations I served, and I was not authorized to discuss them with other groups.  Had I been less ethical and was hired because of those existing relationships, wouldn’t my salary be considered as compensation for connecting the organization with those specific donors?  Now it may not be a percentage, but it is still compensation for making that specific connection, making it, essentially, a finder’s fee.

What do you think?


About greatergoodfundraising

Richard Freedlund has been active in the nonprofit sector in a number of ways, both professionally and as a volunteer. He is the founder of Greater Good Fundraising, a business that helps schools and organizations raise money for their programs while accomplishing something positive for the community. After living in Oregon for 27 years, he has returned to his hometown of Rockford, Illinois and hopes to make his mark on the nonprofit sector there. He is the father of a talented jazz musician and the son of philanthropic parents that continue to support multiple causes. To contact Richard for consulting, fundraising, or speaking opportunities, email or reach him on @ggfundraise
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One Response to One Hand Washes the Other: Making Connections for a Fee

  1. Hi Richard! Great take on an ever-growing issue within the NPO sector. I personally have lost consulting contracts because I would not make introductions to targeted individuals. It seems to be happening more and more with friends/colleagues who are out there looking for employment. And if the sector starts moving more and more (as I think it may) to more for-profit social enterprise organizations, it is something we will inevitably have to deal with at the AFP. As it stands now, though, with NPOs, I do think it is inappropriate, but I have been vehemently taken to task for that position. Linda

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