Paying Commission for Fundraising; Ethical?

Is there EVER a circumstance or situation that makes paying a commission for raising money acceptable?

I think not…but what do you say?Fundraising Commissions

Today, I received an email from a dedicated leader who is striving to help a struggling organization with a whole host of challenges. Two of the organization’s most pressing issues should be familiar to most of us:

  1. the level of his board’s commitment to the organization
  2. NO MONEY

He decided to tackle the money problem first, so he’s contracted with a fundraiser to help the organization go after dollars. The contracted fundraiser has offered to do all the leg work, including paying the expenses associated with fundraising. The fundraiser’s fee is 75% of the proceeds raised. Though my friend was shocked at first, after considering what the net gain would be, and that the contractor would not be paid until the funds had been realized by the organization, he decided that he had nothing to lose and agreed to the terms.

Curiosity got the better of me, so I did a bit of research and found nothing to support this kind of contract.  In fact, as a member of the Association of Fundraising Professionals, this goes against what I have been taught for the past 20 years and is specifically addressed in the AFP Code of Ethical Principles regarding compensation (read item number 21 on AFP’s Code of Ethical Principles and Standards, click here).

But my friend’s situation does beg the question of whether or not there is EVER an appropriate time to enter into a commission-based contract. 

What does your experience tell you?

Thanks for reading,
Kimberley