The Mikuska Group  

Ethical fundraising is not like sales

It’s amazing how often we’re asked if we take a percentage of funds raised, and how astonished prospective clients are when we say no, that happens to be unethical. Up until that moment, they have equated fundraising with sales, where the seller seeks to maximize profit.

Ethical fundraising is multi-faceted. It seeks to engage donors in long-term relationships that benefit both the donor and the organization. It is not focused on the “bottom line”. It is transparent and honest. It does not look at donors as “low-hanging fruit.” It is respectful.

The Association of Fundraising Professionals (AFP) has a Code of Ethical Principles and Standards that all members must annually sign. It has 25 ethical standards that members must meet. Laura and I are members, and we urge everyone who is in development to join.

But a commitment to ethics goes well beyond the development staff. In a culture of engagement and philanthropy, the CEO/executive director, board members, staff and volunteers must all learn about ethical fundraising and how it will, in fact, make it easier to engage donors.

So what does ethical fundraising look like?

  • You look at potential donors as givers rather than a source of dollars. You focus on the person and their relationship to your mission.
  • You make a personal gift before you ask others for theirs.
  • You have excellent policies on privacy and confidentiality and you communicate them widely to staff and volunteers and to donors. You have regular training for anyone with access to personal information to prevent inadvertent breaches of privacy.
  • You pay fundraisers a salary based on their qualifications and experience. You do not pay a percentage of funds raised as this leads to staff working in their own best interest (i.e. to maximize their profit) rather than that of the donor or your organization.
  • Your development staff (in fact, all your staff and volunteers) maintain a professional relationship with donors, and do not accept more than token gifts from donors (e.g. a meal).
  • You do exactly what you’ve agreed to do with donors’ gifts. If the original purpose of the gift is no longer relevant, you go back to the donor or their designate to change the use of the gift. If they disagree, be prepared to return the gift.
  • Your board members, staff and volunteers disclose conflicts of interest. A conflict is not necessarily bad, but it is important to be open so that decisions are made on all the information.
  • You give accurate information about the tax implications of donations and planned gifts, but you also advise donors to seek their own financial advisor’s advice.
  • You have a clear policy on gift acceptance that is understood by board, staff and volunteers and is available on your website. That way, you don’t accept gifts that would have a negative impact on your organization’s mission and image.
  • You are honest and transparent about why you are soliciting funds and how it relates to your mission. You make sure all communications about fundraising are accurate and clear.

If you live and breathe ethical fundraising, your donors will thank you. And you can turn around and thank them.

Julie Mikuska.


When is it time to pack it in?

When is it time for an organization to hang up the cleats? Stop fighting the fight and dissolve or merge?

  • If the mission is no longer relevant i.e. the reasons for founding the organization have become obsolete.
  • If the organization’s mission is similar to others in the community.
  • If the funding has dried up, especially from governments, and there is no natural base of support i.e. donor or member relationships don’t exist or are few in number.
  • If opportunities for earned income are not viable e.g. sales, fees.
  • If the organization exists solely on projects and has no sustainable income.
  • If the mission is supported by only a handful of foundations.
  • If the volunteer base is aging and younger volunteers aren’t filling in, both in client service and on the board.
  • If the board is dysfunctional and relations with staff are sour.

Any one of these reasons may not be what makes an organization decide to dissolve or merge. But for some, it will be a combination.

The Manitoba Society of Seniors was founded in 1979 by volunteers who wanted to give seniors a voice. At the time, seniors needed advocacy around pensions, housing, services and recreation. MSOS also provided services at low or no cost (tax preparation, financial counselling, photocopying), operated bus tours and published the MSOS Journal. It ran the popular 55 Plus Games. Membership, at one time as high as 10,000, provided steady income, and numerous volunteers worked in the office, at the games and served on regional councils.

In 2011, MSOS closed its doors and ceased operations, citing declining membership and revenues. Other organizations work with government to advocate for seniors’ issues, and offer services once offered by MSOS, including the 55 Plus Games. They ceased to be relevant to enough people to support it either as volunteers or as members and donors. Baby Boomers don’t see themselves needing advocacy by a seniors group as they are used to going after and getting what they want.

Deciding to stop operating is not failure if it’s done thoughtfully. If, for example, the need for services still exists in the community but an organization is unable to deliver on its own, a merger with a similar organization can allow for the work to continue. Or any remaining funds at dissolution can be given to an organization with a compatible mission.

If you’re struggling, ask yourselves why. If the conditions aren’t right to go on, then stop.

Laura Mikuska


How much is a personally significant gift?

We ask each member of the boards we work with to make a personally significant gift. That often prompts the question of “how much is that?”

It’s what you feel is significant to you. It’s not decided around the board table, it’s decided at the kitchen table. If you have a partner, you decide together.

If you’re on a board, you should make that organization one of your top three giving priorities. After all, if you believe so strongly in the mission and work of that organization that you are giving of your time and expertise, then it also means you should invest your gifts there, too.

It should be a stretch gift – annually. Some find it easier to sign up for monthly giving as you don’t notice a small amount coming out of your account each month.

And, depending on your income, you may decide that $10 is your gift. And you should feel good about that.

Again, it’s not the actual amount that counts. It’s that you give, that it’s meaningful to you, and now you can be in a position to ask others to join you in making an impact in the community.

Now that’s significant.

Julie Mikuska.


You don’t need millionaires

Sometimes at nonprofit board meetings, I hear from board members that all they need is to find a few millionaires and their problems will be solved. Boom!

As if there a pool of rich people out there who must surely be waiting to give us money. We just need to find them, right?

Sigh. It’s wrong, so wrong. Donors of all means are people, which means they give with their heart to solve problems that are dear to their hearts.

Repeat after me: It’s not about the money! It’s not about the money! It’s not about the money!

Just because you need money is not a reason for someone to give it. People give because they care, and because they think they will have an impact through your organization.

So stop hunting elusive “deep pockets” or “moneybags” and sincerely engage the donors you have and the donors you’d like. Treat them as you’d like to be treated.

Julie Mikuska.


Marcy Heim interviews the twins

In June, Marcy Heim interviewed Julie and Laura as part of her Major Gift Success Club. We had a great conversation on a number of topics including:

  • educating board members to talk about impact rather than overhead
  • why concentrating on low overhead is a race to the bottom
  • the most common mistakes we make when talking to donors
  • the importance of life-long learning for fundraisers
  • why you may be able to ditch your fundraising events

Marcy has generously provided us with the audio of the conversation – have a listen.

Marcy presented at the AFP Manitoba 2013 National Philanthropy Day professional development session. She is a coach and frequent speaker on asking for major gifts among other topics. She is the author of the book Empower Your Board to Serve As Effective Development Ambassadors. Check out her website!

Laura and Julie Mikuska.


Low overhead is a race to the bottom

Are you still talking to your donors about overhead? Does your board operate on the premise of aiming for low overhead? Do you squeeze your budget to get the lowest possible percentage of overhead?

If so, stop right now.

Overhead is not an indication of impact. Low overhead is not a badge of honour. And by not educating donors about how an investment of their funds includes keeping the lights on, you’re doing them a disservice.

Whenever we hear a donor say they want 100% of their gift to go to “programs,” and not to “overhead,” it means they don’t understand that most of an organization’s budget is for people. Those people run the programs! Or they raise funds to run the programs. Or they keep the books for the programs. And so on. And they deserve to be adequately compensated, and not work for peanuts just because they’re working at a non-profit.

Concentrating on overhead is a race to the bottom. The less you invest in your organization, the harder it will be to do the work you’ve set out in your mission. Non-profit doesn’t mean “to starve an organization.” It means the “profits” are for the community’s benefit, not shareholders. So making sure the organization is on sound financial footing is very important.

We all want what’s best for the community, and that requires investment for impact. So talk to your donors about how you’re making an impact by providing solutions to problems. Then ask them to join you in making a difference.

– from our May e-newsletter – subscribe here.

Julie Mikuska.


Navigating charity rules

You’re passionate about your mission and you’re operating as a registered charitable organization in Canada. In addition to fulfilling your mission (feeding kittens, housing street youth, saving the planet), you issue donation receipts, hold fundraising events, send direct mail appeals, send a call to action to your supporters to take the government to task for policies and laws you feel should be changed – the list goes on.

Do you know what a qualified donee is? Do you know the definition of a gift? Do you understand split-receipting? Can you define “advantage”? How does it affect your receipting? Do you know the definition of “political activity” and how much you can do? Are your by-laws up to date?

The rules around operating a charitable organization are vast and at times complex. But fear not, there are excellent resources available to help you navigate these particular waters:

  • Canada Revenue Agency’s Guidance Fundraising by Registered Charities – this is a must-read by the people in your organization who are fundraising.
  • Canadian Charity Legal Checklist – compiled by Mark Blumberg at An excellent overview of activities with links to more detailed information.
  • Canada Revenue Agency’s Charities and Giving website – detailed information and guidance on any topic you can imagine (including answers to the questions in paragraph #2!).

You’ll also need to consult with your legal counsel in the event of a complicated situation, for example, updating your by-laws, gift agreements and filing your charitable tax return.

It’s your responsibility to be in the know – ignorance is not a defence!

Laura Mikuska


Succession planning and loyalty

A recent discussion with a business owner, Sue Leclair of The Pretzel Place, about her staff got me interested in what lessons she shared could be applied to non-profits. While she’s relatively new to the business, Sue does have her eye on when she’d like to step away and have someone else run the day-to-day operations. With that in mind, she told her staff that she’d like to “train my replacement” and was pleasantly surprised at the number who were interested.

Another observation she made was that almost all of her staff had returned from the previous year! That loyalty stems from her attitude that they are like “family” and should be treated with respect. She is taking that further and challenging them to choose, among themselves, who will be “Team Leader of the Day” in each of her concessions. She wants to give everyone a chance to test out that responsibility.

So what can business teach non-profits?

Often we see organizations struggle when a long-time executive director or board chair leaves and there is no plan for succession. Boards have a duty to “write themselves out of the picture” by advancing board members through the various positions up to President, then stepping off the board to allow new members and fresh perspective. Who in the organization might one day be interested in the top staff position?  Consider sending your leader and future leaders to a Leadership Development module at the Banff Centre so they can explore this possibility. Bursaries are available!

Do you have loyal and long-time staff members? Or is it a revolving door in and out of your organization? Do you invest in your staff training? Having activities such as “Team Leader of the Day” or similar things can breed good feelings about your workplace and don’t have to cost a lot. Recognition and encouragement also go a long way in keeping staff interested in working for you.

Plan your succession and engender staff loyalty. You will reap the rewards.

Laura Mikuska


Observations from Thunder Bay

We recently visited Thunder Bay, Ontario to meet with members of the Lakehead Fundraising Association and provide a workshop on engagement. We were warmly greeted and had a chance to hear from their members.

Observations about Thunder Bay:

  1. The roads and infrastructure are as bad as in Winnipeg.
  2. The people are super friendly.
  3. Charitable organizations have the same challenges there as anywhere we’ve visited.

One thing we found in common among the twenty or so organizations represented, was the lack of board engagement. Many bemoaned the fact that very few of their board members understood their role in fundraising and even fewer gave a personal gift. One staff member said that despite being the fundraising coordinator, she was not allowed to meet with the board. Her Executive Director was the buffer between the board and the staff, and the two groups had never met each other. This board was puzzled about their lack of success in fundraising. Go figure!

Another challenge was lack of support for professional development. Most felt their organizations didn’t see the benefit in investing in furthering their fundraiser’s knowledge. They viewed it as an expense and refused to send them to courses or conferences that would have increased their knowledge and brought back new ideas. There was similar grumblings about lack of investment in technology and databases. We call this the Poverty Mentality.

Two organizations we met with had thousands of donor names in their database, but had never done a direct mail campaign to them! They had dutifully recorded the names and sent out a thank you letter and receipt, and that was the end of their contact with them. Astonishing! We told them they had huge potential to reach out with a campaign to re-engage these people. They had hope for the future after learning about how they could do this.

Do you see yourself or your organization in any of these scenarios?

Laura Mikuska


Governance is not a dirty word

If you work in a nonprofit or charitable organization, or serve on a board of one of these organizations, chances are you’ve tackled the notion of “governance”. The very word is enough to make people’s eyes glaze over and have them scrambling for the exits.

Yet when done well, governance contributes to the overall health and sustainability of the organization. It’s not just about “bums in seats”, but requires all board members to be active participants in discussion and decision-making.

A healthy board:

  • has a strong chair who facilitates conversation and discussion
  • has members that come to each meeting prepared to voice opinions
  • has everyone attend meetings having read the reports and minutes
  • tolerates dissent but speaks with one voice
  • can make decisions in a timely matter because quorum is met every time

An unhealthy board:

  • has a dominating or weak chair who is ineffective in facilitating discussion
  • has members who don’t participate or who remain silent to avoid controversy
  • has members who dominate the discussion
  • has members who come unprepared; unable to contribute because they are not up to speed
  • has instances of “sidebar conversations” outside the meetings that don’t involve the entire board
  • has “rogue” board members who act contrary to the will of the board
  • has difficulty reaching quorum due to non-attendance of board members

Funders are increasingly making decisions about where to invest based on the health of your board. Which type of board would you rather have?

Laura Mikuska


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