OPINION: The gaping hole at the centre of fundraising ethics

Ian copyThe ongoing investigations following the death of Olive Cooke are looking at how the fundraising profession needs to reform its applied ethics. Ian MacQuillin argues that we first need a theory of ‘normative’ ethics to inform these decisions – one that includes fundraisers duties to their beneficiaries, not just their donors.

There is a gaping hole at the centre of fundraising’s professional ethics.

This is nothing to do with how we go about our fundraising, notwithstanding any ethical questions thrown up by the Olive Cooke case and the stories that have surfaced following the open season the media has declared on charities.

No, it’s about the difference between ‘normative’ ethics and ‘applied’ ethics. It’s about the beneficiaries of fundraising. And it’s about providing fundraisers with the framework they need to make sound decisions when confronted with the ethical challenges their profession currently faces, rather than the sector making up its ethics as it goes along, as it so often seems to do.

Fundraising has applied ethics in abundance. We have plenty of rules and regulations that tell us what we ought to or ought not do, and once the current FRSB investigation is completed, we will have more rules and regulations stipulating a few more things we can and can’t do.

“The fundraising sector cannot carry on changing its professional ethics on the hoof, every time someone outside the profession disagrees with it.”

Applied ethics seek to apply ethical principles to specific issues – such as animal rights or racial equality. Their aim is to determine the right and wrong things to do in different situations and under different circumstances. The IoF’s Code of Fundraising Practice and the FRSB’s Fundraising Promise are applied ethics that seek to determine right and wrong actions in the domain of fundraising.

The code of practice contains a series of strictures that are prefaced by ‘ought’ or ‘ought not’, such as:

  • Ought not try to get someone to switch a donation from another charity
  • Ought not include a gift in DM that’s aimed at generating a donation based on ‘financial guilt’
  • Ought to always terminate a solicitation on the street when requested to do so
  • Ought to always act in the best interest of the charity when deciding to refuse a gift.

These are ethical requirements. It is unethical, under the code, to try to persuade a potential donor to switch their donation from another charity to yours.

But why is it? Why shouldn’t a fundraiser persuade a donor to switch donations? Companies try to do this all the time. The answer to this question – and others like it – is not self-evident. And the code doesn’t provide the answer.

While the code tells fundraisers what the Institute believes the ethically correct actions for them to take are, it doesn’t explain why the Institute believes them to be ethically correct.

In other words, there is no ‘normative’ theory of fundraising ethics underpinning the code.

The practical problem this leads to is that whenever we encounter ethically grey areas in the code (such as whether or not to knock on doors displaying a ‘no cold calling’ sticker), or entirely new ethical dilemmas, we don’t have a frame of reference to inform our ethical decision making.

Rogare has begun a project to develop a new theory of fundraising ethics. It’s what is called a ‘normative theory’ rather than an applied one.

We started this a couple of months ago and had not planned to announce it yet – the first time we are due to present our findings publicly is at the IoF Scotland Conference in October. However, we’ve decided to announce and describe our work earlier than planned because we believe the direction we are pursuing in fundraising ethics might make a contribution to the reforms being considered for fundraising following the Olive Cooke tragedy.

 

What does normative fundraising ethics look like?

Normative ethics is concerned with the content of moral judgements, and the criteria for what is right or wrong. They attempt to provide a general theory of how we ought to live. Two of the most well-known – though by no means the only – normative ethical theories are consequentalism and deontology.

Consequentialism dictates that we are morally obliged to act in a way that produces the best consequences (hence the name). The best-known consequentialist theory is Utilitarianism, which states we should choose options that maximise the greatest good for the greatest number.

In contrast to consequentialism is deontology, or ‘duty-based’ ethics. Deontological ethics require us to carry out an act because it is the ‘right thing to do’. And this is irrespective of the consequences.

At first glance, it seems like the code and the Fundraising Promise are deontological. Fundraisers ought not put premium gifts in mailpacks because this makes potential donors feel guilty about not reciprocating the gift, and making donors feel guilty is just wrong…end of.

But it could be that the codes are actually consequentialist. Consider this quote from US consultant Michael Rosen:

One way in which organizations can enhance the public trust is to maintain the highest ethical standards and to communicate this commitment to donors and prospective donors.”

This is construing the codes as consequentialist, because the right – i.e. the ethical ­– course of action is the one that promotes public trust; and actions that diminish public trust are therefore unethical and wrong.

You could call such an approach to fundraising ethics ‘Trustism’.

Under a ‘trustist’ approach to fundraising ethics, the inclusion of premium gifts and attempts to get donors to switch charities would be wrong (unethical) because it would lead to a diminution of public trust in fundraising. Professor Adrian Sargeant’s work has demonstrated the vital importance of trust in driving donor commitment and loyalty – and hence greater lifetime value of donations.

Trustism is a normative approach to fundraising ethics because it sets the criterion for making right and wrong decisions – the criterion being the effect on public trust.

But this is not the only approach to fundraising ethics that can lay claim to being a normative theory. By exploring the academic and practitioner literature, we’ve identified at least five collections of ideas that can lay claim to being normative theories of fundraising ethics:

  • Trustism
  • Relationship Management
  • Donorcentrism, consequentialist version – DC(C)
  • Donorcentrism, deontological version – DC(D)
  • Service of Philanthropy – SoP.

We’ve already looked at Trustism. Relationship Management – developed by American academic Kathleen S. Kelly of the University of Florida – is quite a nuanced argument that I don’t have space to go into at this point, but will explain in more depth as this work progresses. For now I’ll just point out that it’s not the same as relationship fundraising. But let’s outline the other three.

 

Donorcentrism

Donorcentrism is a collection of ideas that have grown from professional practice that share the common theme of ‘putting the donor at the heart of charity communications’.

But there appear to be two versions of Donorcentrism in circulation: one is consequentialist – I’ll call it DC(C). The other is deontological – DC(D).

DC(C) is British relationship fundraising as espoused by many prominent practitioners in our sector. It is consequentialist – because it proposes that satisfied donors give more money over a longer period. Therefore the ethical thing to do is the one that delivers the best experience for the donor.

At the heart of DC(C), however, is an ethical proposition that shades into deontology – that you ought to promote the donors’ experiences because it is the right thing to do, irrespective of whether it leads to higher lifetime value (LTV). Initial analysis of Rogare’s review of relationship fundraising suggests this is an idea that has particular currency in the United States.

 

Service of Philanthropy (SoP)

There’s a different ethical approach to fundraising under the ‘servicing philanthropy’ idea. The notion that ‘fundraising is the servant of philanthropy’ was proposed by acknowledged US fundraising ‘guru’ Hank Rosso.

Under this approach to normative fundraising ethics, the purpose of fundraising is to enable donors to give in a way that is meaningful for them. Rosso writes that:

“Fundraising is justified when it is used as a responsible invitation guiding contributors to make the kind of gift that will meet their own special needs and add greater meaning to their lives.”

So this is a very clear normative statement about how fundraising ought to be practised. It is consequentialist because it clearly states that the right course of action for a fundraiser is the one that results in consequences that meet the donors’ needs and bring meaning to them.

It’s a different kind of consequentialism to trustist and DC(C) ethics, which both serve the end of maximising net income and LTV. SoP ethics clearly rate the ‘meaningfulness’ of donating above how much the donor gives to a particular cause or charity. If a fundraiser wants to ask for a gift that would not be ‘meaningful’ to the donor, then she ought not do it, irrespective of the outcome for her organisation.

To attempt to do so would be to act unethically. Instead, an ethical fundraiser would exercise ‘professional autonomy’ and direct the prospective donor to a cause that better matched their philanthropic needs, even if the organisation they work for desperately wants the fundraiser to secure the gift.

 

Where’s the beneficiary?

These theories all outline fundraisers’ duties to various stakeholders and concepts: to public trust, LTV, donor experience, ‘meaningful’ philanthropy, the relationship type (under Kelly’s theory).

But something – or more accurately someone – is missing.

What I think is conspicuous by its absence in most (but not all) of the codes and putative normative ethical theories, is any reference to the beneficiaries of charities. What are fundraisers’ responsibilities and duties towards their beneficiaries, whom charities are supposedly set up to serve?

 

Rights balancing fundraising ethics

I am proposing a new concept of normative fundraising ethics that focuses on the beneficiary. It attempts to balance what is right for the beneficiary with what is right for other stakeholders.

In this new concept, the primary responsibility of fundraisers is to do right by their beneficiaries – which normally means maximising the income to provide them with services – while attempting to balance this with the right course of action for others.

It is grounded in Rights Theory, and specifically a part of rights theory which suggests that:

a)    all duties entail other people’s rights

b)    all rights entail other people’s duties.

This is called the doctrine of the correlativity of rights and duties.

Some rights are considered to be universal. These are enshrined in the UN Universal Declaration of Human Rights, which states, for example that every person on earth as a right to life, liberty and security; health; and an education. These are called welfare rights.

Now, the doctrine of correlativity of rights and duties states that if people have these rights, then someone has a duty to uphold them. Professor Michael Freeden of Nottingham University says that rights can be upheld by the community or its agents: the duty to uphold these welfare rights is a communal duty.

It’s exactly for the maintenance and protection of these rights that many nonprofit organisations are established. Nonprofits are discharging this communal duty to uphold the welfare rights of their beneficiaries. In this respect, nonprofits act as agents of the community, upholding the welfare rights of people within the community.

And, of course, fundraisers are agents of nonprofits.

Fundraisers are therefore agents of beneficiaries (rights-bearers), representing their claims to the communities responsible for upholding those rights.

This provides the ethical basis, and moral authority, for the duty of fundraisers to solicit the donations that will enable voluntary organisations to better the conditions of their beneficiary groups.

Any ethical dilemma under this normative theory is likely to result from a conflict between the needs of beneficiaries, and therefore fundraisers’ duties to them, and the needs of other stakeholders such as donors, and fundraisers’ duties to them.

Fundraisers need to use an ethical decision making framework that can balance these conflicting demands. Such a framework will help fundraisers to determine what amounts to ‘reasonable persuasion’ (the undefined term used in the code of practice to describe the level of pressure a fundraiser may exert in the pursuit of a gift) and what the effect to this is likely to be on concepts such as public trust and the donor experience.

It is a consequentialist theory because the best course of action under it is the one that strikes the best balance in the long-term interest of the beneficiary. Under this concept, the primary (but not only) duty of the fundraiser is to the beneficiary.

So in a nutshell, this normative theory runs as follows:

Ethical fundraising balances the duty of fundraisers to ask for support, with the rights of other stakeholders not to be put under ‘undue’ pressure to donate.

(‘Undue pressure’ is the term used in the FRSB’s Fundraising Promise.)

It is possible that the result of such an ethical analysis could conclude as follows:

The duty of a fundraiser to ask in a particular situation might outweigh anyone else’s right not to be asked, or not to be asked in a certain way.

For example, suppose objections to a particular type of fundraising were being driven by a hostile media. However suppose also that the best evidence available suggested that the actual fundraising was compliant with the code, and any short-term diminution of public trust would be recovered in the medium term.

A rights-balancing approach could therefore validly conclude that no change should be made simply to placate public opinion, because this would not be in the long-term interest of beneficiaries.

It is important to stress that this kind of rights-balancing fundraising ethics requires solid evidence to inform its decision making. Without such evidence, potential consequences cannot be reliably assessed.

 

Applying rights balancing ethics

There is currently huge demand for change in fundraising. People and organisations with loud voices are demanding an end to, as they see it, ‘unethical’ fundraising practices.

The decisions the fundraising sector takes today will impact on charities’ abilities to raise the money they need to provide services for their beneficiaries for the next decade.

Public opinion (in the form of public trust) is a stakeholder in fundraising’s professional ethics, but it is not the only one. Fundraising has an ethical duty to ensure that any reforms enacted in response to the objections of certain stakeholders are appropriately balanced with the long-term interests of beneficiaries.

The fundraising profession needs to adopt a consistent foundational theory of normative ethics to inform its applied ethical decisions. It need not necessarily be the one I am proposing – and our ongoing work will put more flesh on the bones of the other theories I have outlined in this blog.

But the fundraising sector cannot carry on changing its professional ethics on the hoof every time someone outside the profession disagrees with it.

 

 

Associate members

 

 

 

 

3 comments for “OPINION: The gaping hole at the centre of fundraising ethics

  1. June 11, 2015 at 9:35 am

    Hi Ian. Fascinating piece and lots of food for thought. I like the simplicity of the normative theory you propose. It will need to be supported with specific examples of how it could be applied, but I think it is a good starting point for a debate.

    My big worry with all the proposals currently flying about is we will take knee-jerk action that will damage our long-term ability to fundraise for the beneficiaries we serve.

    One final thing, I’ve always thought that fundraising would benefit from it’s own version of the Hippocratic Oath used by doctors. This would provide a moral compass for individual fundraisers to refer to when making decisions.

    I look forward to reading more.

    Kind regards

    Craig

  2. Sam Butler
    June 12, 2015 at 10:18 am

    Hi Ian

    A sound piece. Although I think that one of the big criticisms facing fundraising is through the professional engagement of an agency to fundraise on a charity’s behalf, but then a lack of engagement from the charity in stewarding that agencies activity.

    The turn-over of staff at most agencies is very high, and although a charity may launch a campaign by training the staff initially, often that training is passed on to an internal trainer within the agency. If you want to make such huge investments in establishing a campaign and appointing an agency on your behalf, you then need to be ready to back it up with a continuous presence, developing your culture and voice within that of the agency you appoint.

    I don’t think this is about reacting to what the media and press demand on the hoof, but about establishing a sector that works together more closely, where there is more transparency on costs of running an agency, and seeing profits reinvested in to front line staff and training, so that ethically agencies and charities co-exist in their moral values, rather than one where an agency is held at arms length every time it is scrutinised.

    It would be good to catch up again soon.

    Sam

  3. Roewen Wishart
    June 15, 2015 at 11:23 am

    Australia’s St James Ethics Centre made an excellent contribution to applied fundraising ethics, when assisting the Fundraising Institute of Australia to create training tools for its Principles and Standards of Fundraising Practice.

    In brief, the key point was that in considering ethics, the area where fundraisers most need a framework for decision-making is ethical dilemmas (the choice between legitimate, competing “beneficial” actions, or less frequently, the choice between competing “adverse” actions where a choice must be made). The area of “moral temptation” (the choice between what is apparently “right” and “wrong”) is more frequently identified in public debate, but in many ways is “simpler” – if the participants can agree that some actions are “right” and some “wrong”, then acting on right can be seen simply as “not yielding to moral temptation”.

    However (as the discussion in this blog shows) the normative basis of what is “right” and “wrong” is contestable.

    What the St James Ethics Centre proposed was that fundraisers (like any other profession or occupation) need systematic ways to think through dilemmas. The point is to identify the widest possible ways to consider dilemmas, rather than seek a rule-bound approach which “gives one answer”.

    Systematic ways include identifying the interests of those affected, considering all possible consequences of choices, and considering what norms should underlie the decision. The rights-based approach is one source of norms, classical utilitarianism is another (“greatest good of the greatest number”).

    One which interests me (and I haven’t read thoroughly about it) is captured in John Rawls’ twin principles of “basic liberties” and “greatest benefit to the least-advantaged members of society”. These seem to me to be very relevant to NFPs, and thus to fundraising for NFPs. Perhaps some of the ethical dilemmas which manifest in questions about fundraising conduct could be dealt with by reference to those norms (e.g. the competing “good” of individuals’ “quiet enjoyment” of their rights, and the “good” of the what NFPs do to uphold and advance basic liberties and the least-advantaged.

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