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Can professional fundraiser be paid percentage of funds raised?

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Can professional fundraiser be paid percentage of funds raised?

Can a nonprofit hire a professional fundraiser to secure funding for special events or donations and can the fee come from a commission of a designated percentage of funds raised?

Nonprofits may hire fundraisers and pay them from the amounts collected. There is no statutory restriction that I am aware of which would prevent the nonprofit from paying the solicitor a percentage of the amount collected, but the Association of Fundraising Professionals and other professional groups say it is unethical to do so. Members of those professional groups will not work on a commission basis. 
 
You should also check to see whether your fundraiser must register as fundraising counsel or professional solicitor under any relevant state charitable solicitation registration laws. 
Wednesday, May 9, 2007

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Comments

In response to the reader's question about why commission-based fundraising is unethical, I had the same question until I was faced with this situation. An organization approached me and asked me if they could hire me on as a freelance grantwriter. They offered to give me a percentage (I believe it was 10%) of all revenue that I raised. Suddenly, I was faced with several concerns. First, because most grants take months to finalize, I would essentially be working for free until things came through. Second, would I be responsible for post-award grant management? I have learned that this is a very important part of securing continued grant funding. So, if an organization isn't managing the grant properly (financial management, tracking outcomes, providing progress reports) then continued grant funding is often less likely. This would be unfair for me if I'm working based on commission. Third, if I stopped working for the nonprofit, and if they received ongoing funding from a relationship that I cultivated, would I receive commission even after I wasn't working for them anymore? Obviously, a clearly articulated contract would answer these and many other questions. But, after putting a lot of thought into it, I realized that it really is a bad idea to do this. It is more simple to provide a fair pay for fair work.

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