Payola

Back in the 50s, radio gained in popularity as a way to market music for America’s youth.   Baby-boomers discovered pop music and rock and roll, and because of post WWII prosperity, teenagers had money to spend on records and concerts.  To increase their profits from sales, business executives fostered relationships with disc jockeys around the country by offering illicit incentives to increase airplay of their clients’ music with money.  Lots of it.  Some disc jockey set rates of pay to play the records a certain amount of times each week, and this worked for the record companies.  Eventually, this tactic was discovered by those in the government, and Congressional hearings were held, and allegedly the practice ceased.   The fact is, it became less open, but for an unknown number, it’s likely it still occurs.

There is a large number of companies out there that serve the nonprofit sector, and many more that would like to serve them.  Technology companies, insurance companies, printers, janitorial companies, suppliers, and more, all vie for the business that nonprofits and charities can pay for, and the competition can be incredible.  Competition can be fierce, so some enterprising vendor may seek out the decision maker for your organization, a director, Board member, or Program Director and “court them” in hope that their relationship will result in the purchase of their service or product.  Some may even offer a financial inducement should they successfully steer the business their way.  Sadly, when there is money to be made, people can be unscrupulous and lose sight of their ethics.

According to the Association of Fundraising Professionals Code of Ethical Principles and Standards, “Members shall neither offer nor accept payments or special considerations for the purpose of influencing the selection of products or services.” That means vendors should not offer inducements or bribes to get an organization to choose their product or service, nor should members of the staff, Board, or volunteers accept a payment or any other reward to steer the organization toward selecting a product or service.  Selecting a product or service must benefit the organization, its clients, and those that support it.

If you have a product or service that you truly believe in, offer it as it is.  If it is truly as good as you believe, you will not have to pay off someone to get them to use it.

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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 greatergoodfundraising@gmail.com or reach him on Twitter.com @ggfundraise
This entry was posted in Consultants, Ethics, Nonprofit, Nonprofit Boards and tagged , , , , , , , , , , . Bookmark the permalink.

One Response to Payola

  1. Non profits need to address this in their policies. Most organizations I’ve worked for have a policy that requires them to put projects that will cost more than a specific amount of money out to tender and make a decision on who to hire, or buy from, based on cost and the organization’s need.

    Diana

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