Tuesday, June 24, 2008

Code of Conduct - discuss

So a load of Canadian charities have agreed to a new Code of Ethics. There is the International Statement of Ethical Principles in Fundraising already, but the new Canadian code can be found here.

Within the code there is a ban on commission-based fundraising.

Rather than me splurge here - I am asking you dear reader for your views on this. Let's get a nice debate up online.

I would be especially interested to hear from charities that use Face to Face, and Face to Face agencies too.



Gordon Michie said...

the debate on commission based fundraising is not just a debate raging in Canadian fundraising circles and the concept of commission is generally frowned upon in most developed and developing main stream fundraising markets and this is something that I would tend not to disagree with- however over the years that I have been involved in fundraising one of the interesting debates that I have come across and had with a variety of individuals and sector governing bodies is what is the actual definition of commission? is it a precentage of the actual gift, this is easy in major giving fundraising such as a precentage of the donation to a hospital wing but is much more difficult to define in committed giving where the final amount of the gift is never known at the point if payment and therefore can never be thought of as a percentage of the final amount - that is true commission - however some people add into commission set fee payments and I would contest that these are not commission based payments - so to me like so many other terms in our industry we need to find a common and accepted definition of what we mean by commission

richardmpd said...

I think we need to distinguish between a comission based on the size of the cost, and a commission based on the size of the gift.

The former is OK, and is what is usually taken by the agencies. The latter is a no-no, only because the donor is going to feel that the more she gives the more she will enrich the professional fundraisers.

'Sean is always learning' said...

Richard makes a good point here, but surely commission based on gift has a much lower risk for the charity than that based on cost?

The success of mass face to face donor recruitment has been more based on income commission - hasn't it?

JohnB said...

Discussing whether commission is bad or not seems a little disingenuous to me. Surely the simple answer is that fundraisers should adopt the most appropriate payment method for the program they are running. To not consider commission based payments to suppliers solely on the basis of an unsubstantiated aversion to the practice (such as 'we don't do that here' or 'I heard the hospital down road ended up paying over 80% commission to some guy they got to do their capital campaign')isn't the basis of good decision making.

I know of organisations that have ended up paying a fortune per donor by purchasing 'capacity' from a Face to Face supplier who couldn't live up to sign-up expectations. Similarly there are fundraisers who can't do their sums and have ended signing contracts that have close to unacceptable commission terms. You should also keep in mind, however that if a F2F campaign is in trouble it is rarely solely because of the payment method chosen. If your break even point is 27 months it's probably not because the agency is signing up hobos on commission, it's probably because of unacceptably high attrition caused by inefficient backend or non existent donor engagement.

Myself, I would never engage a F2F supplier unless on a form of commission. I’m not going to invest a couple of million Australian pesos in a supplier unless there is a significant level of risk diversification between us and the supplier.

Irrespective of what method you prefer, nothing beats doing your sums beforehand, ensuring your quality methodologies are in place and ongoing monitoring of your campaign. Do that and it will rarely end in tears.

Of course, there is one context where commission based remuneration doesn’t work and that is us fundraisers professionally employed by charitable organisations. Aside from all the usual issues fundraisers have to deal with internally, that last thing fundraisers need is projects knocked back because of a perception that they may have proposed it for personal gain.

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