Over the years, I have been involved with a number of organizations which were supported by businesses that did fundraisers for their causes. They usually involved holding an event at their establishments and gave us a percentage of 25% to 50% of that night’s receipts. In most cases, the amount was tallied at the end of the night, and a check was written and delivered the next day or so.
In the past few months, an organization that I serve participated in this kind of event. The percentage was smaller than those I took part of in the past, but I am in a different market now that is not as economically vibrant as the one in my past. After the event, I hadn’t heard how it went, so at the next committee meeting, I asked about the results. The other members did not know, but said they would share that information at the next monthly meeting. At the next meeting, they did have a total, but the business had not sent the check yet. Finally, at the next meeting, they had received a check from the business. That was three months after the event. It seemed to me like a very long time for the business to complete the transaction.
Last month was Breast Cancer Awareness Month. I am pretty sure most are aware of that fact. The world seemed to be awash in PINK! From the NFL to just about everything in the grocery store, there were pink ribbons adorning products from yogurt to gas and oil drilling equipment. Many companies do cause marketing to bring awareness of breast cancer and take a percentage of the money made from these products and donate it to Susan G. Komen or other breast cancer foundations and organizations. My question is, “How long does it take these companies give that money to those groups?” Do they wait until the end of the month and then send a huge check or do they wait until the end of the year? The same question goes for any cause marketing campaign. If they wait until the end of the year, what do they do with the money until they give it to its recipients? Does it go into a savings type of account and does it accrue interest? If it does, who gets the interest? The company or the organization? Does anybody know? It piques my curiosity.
What about fundraising contractors? I don’t know any who work this way, collecting money from donors and then giving the money at the end of the contract. Are there any who work this way? If they do, who do the donors write their check to? The contractor or the charity? I can’t imagine a nonprofit working with a contractor who would work that way.
According to the Association of Fundraising Professionals Code of Ethical Principles and Standards, “Any member receiving funds on behalf of a donor or client must meet the legal requirements for the disbursement of those funds. Any interest or income earned on the funds should be fully disclosed.” My understanding of this tenet is that, if you are collecting donations for a charity or other nonprofit organization, you need to keep proper records of the money you receive so that it is fully disbursed to the proper recipients. That seems like common sense to me.
The problem with this situation is that many of these businesses are not members of the Association of Fundraising Professionals, and they most likely do not abide by the professional ethics of the organization. The same can be said of individuals who raise money for a cause as a volunteer. I recently spoke to an individual who raised and collected money for a fundraising walk that took place a few weeks ago. She has yet to turn in the money that she raised.
It is my opinion that if you are raising money for charitable purposes, you should turn it in to that organization as quickly as possible. Whether you are business, a contractor, or a volunteer, the money must be disbursed to the organization that supporters gave it to. You should not have it long enough to make interest on it. It is not your money to keep or to profit from.
Thanks to my friend Michael Rosen for his thoughts on this subject. Welcome back, my friend.