National Fundraising Policy

Issued: December 5, 1998 Revised: March 9, 1999 Adopted: October 13, 1999

1. Introduction
2. Definitions
3. Statement of Ethical Principles
4. Authorities & Jurisdictions
5. Donor/Sponsor Bill of Rights
6. Code of Professional Practice
7. Conclusion
8. References
9. Motion

Introduction

When contributors are asked how important certain factors are in their decision to contribute to non-for-profit organizations, the following items are regarded as very important:

• A clear mission statement;
• How well the organization is serving its mission;
• Whether advertising and promotion accurately describes the organization’s program;
• Whether fund-raising techniques involve undue pressure;
• Whether an annual report is available, and
• Whether the organization is spending adequate income on programs rather than management.

For the organization, the challenge is to acquire funds by ethical means, and use them wisely. For the donor, the principal basis for making a charitable gift should be a desire to support the work of the institution. In the case of a corporate sponsor, aligning with a non-profit organization is an enticing and powerful marketing tool. Of course, the sponsors are looking for a good return on their money and visible recognition.

The Canadian Coast Guard Auxiliary is a new player in the field of fundraising. It does have already, some of the above mentioned items (clear mission statement, good track record on serving its mission, etc.) However, it has to establish a fundraising policy to guide its members involved in marketing the organization and to inform eventual donors and sponsors.

Although every code of ethic is unique and tailored to each organization, codes also tend to have elements in common. They tend to:

• Begin with a Statement of Purpose; 
• Identify major stakeholders; 
• Affirm good citizenship; 
• Commit to ethical principles; 
• Identify interests consistent with the organization’s values and principles;
• Give special attention to conflicts of interest that can arise in pursuit of objectives.

The importance of a fundraising policy is two-fold: first, it clarifies the organization’s expectations of employee/volunteer conduct in various situations and second, it makes clear that the organization expects its people and contributing partners to recognize the ethical dimensions of its corporate mission.

The CCGA Fundraising Policy is an amalgamation of three distinct statements :

1. Statement of Ethical Principles

The Statement of Ethical Principles formalizes the principles, obligations and high standards of ethical behaviour, which are listed as values. It does not detail all responsibilities but rather sets general guidelines of conduct.

2. Donor/Sponsor Bill of Rights

Donors and sponsors will participate in the very essence of the CCGA mission and purpose. They have rights, prerogatives and privileges that must be recognized. To ensure these rights, the CCGA is endorsing a Donor/Sponsor Bill of Rights developed by the NSFRE¹. 

A code of professional practice adapted from a version also developed by the NSFRE complements the Statement of Ethical Principles and the Donor/Sponsor Bill of Rights to which the CCGA fundraising members adhere. The code of professional practice includes a list of ethical obligations expected of all members. It is important that these obligations be clearly articulated and that the members conduct themselves accordingly.

Footnote: 1 -  National Society of Fundraising Executives

Definitions

Fundraising Activity

A fundraising activity includes a charitable solicitation; the activities, representations and materials that are an integral part of the planning, creation, production and communication of the solicitation; and the collection of the money and property or other thing of value requested. Fundraising includes but is not limited to donor acquisition and renewal, development, fund or resource development, member or membership development, and contract or grant procurement.

Corporate Sponsorship

A corporate sponsorship is a contractual arrangement between the Canadian Coast Guard Auxiliary and a corporation that is designed to benefit both parties. The partnership is marketing-oriented and is usually developed around a specific program or service.

Relevant CCGA Authorities

The CCGA National Fundraising Policy applies to all regions, units and members of the CCGA. Each regional Board of Directors is responsible for the implementation of the Policy in its respective territory and responsible for the review and approval of local and regional sponsorship proposals. The CCGA National Council is responsible for review of the National Policy and review and approval of national sponsorship proposals.

CCGA National Council will also be responsible for use of funds raised at the national level and redistribution of these funds to the regional associations. Regional Boards of Directors will be responsible for use and redistribution of funds raised at the regional level. Local units will be responsible for use of funds raised at the local level.

Statement of Ethical Principles

Honesty CCGA fundraisers shall be truthful with regard to their identity, purpose and identity of the organization during the course of their work.

They must be open honest and clear, avoiding exaggerated claims of performance and misleading descriptions of activities. Proposals should be forthright about the organization’s identity, purpose, programs and financial needs.

Confidentiality CCGA Fundraisers must be thorough and discreet in the process of learning to know and engage all donors and prospective supporters, to earn their enduring support. They must do this with sensitivity and respect for individual and corporate dignity.

Confidential information pertaining to donors or prospective donors shall be scrupulously protected so that the relationship of trust between them and the CCGA is upheld.

Unless given permission by the donor, gifts are regarded as confidential transactions between the donor and the Canadian Coast Guard Auxiliary. Therefore, the CCGA will not sell its donor list.

Fundraising solicitations should also respect the dignity and privacy of those who benefit from CCGA activities.

Accountability The value of accountability includes acceptance of responsibility for decisions and the consequences of actions or inaction. It requires fully divulging how funding was used, including fundraising and administrative costs; being a scrupulous steward over contributed dollars; confronting issues directly and quickly, planning for the future of the organization; laying the groundwork to meet future goals by projecting future demands and cultivating future support.

As an accountable organization, the CCGA will state its mission and purpose, articulate the needs of those being served, explain how its programs work, how much they cost and what benefits they produce. The CCGA will freely and accurately share information about its finances, governance, processes and programs.

The CCGA will make available on request an annual report presenting the organization’s purpose, description of overall programs, activities and accomplishments, information about the governing body and information about financial activities. The financial statement shall present adequate information to serve as a basis for informed decisions by prospective donors/sponsors.

The CCGA is responsible for mission fulfillment (doing what it says it will do), leadership on behalf of the public interest, stewardship (generating adequate resources, managing resources effectively, supporting and recognizing volunteers) and excellence.

The CCGA Regional Boards of Directors and National Council (in the case of national fundraising initiatives) are responsible and accountable for the respective authorized activities generating financial support on the organization’s behalf.

The CCGA will establish and exercise controls over fund raising activities conducted for its benefit by staff, volunteers or consultants, including commitment to writing of all fund raising contracts and agreements. It shall also establish and exercise adequate controls over contributions.

The CCGA relevant authority must be informed of the complaints received from donors/sponsors or prospective donors/sponsors.

Fairness Fundraisers must seek fairness and objectivity in arrangements that require the sharing of benefits and burdens, privileges and responsibilities. They must create and follow a process and achieve outcomes, which are just, even-handed and non-arbitrary.

Integrity The lack of integrity causes such things as bending the institution’s mission to get funding or allowing program activities to drag the organization away from its mission.

The CCGA must live up to both the spirit and letter of promises to donors. Its fundraisers must make and keep promises, agreements and contracts that are consistent with organizational purposes.

Staff and volunteers must avoid conflict of interest or exploiting relationships with donors or volunteers for personal benefit.

The CCGA will only enter into contractual agreements, which uphold the organizations core values and principles, and which are not deemed to be unfair and unethical to other business interests. The CCGA will not accept donations for purposes that are inconsistent with its mission. Relevant CCGA authorities may identify sources from which it will not accept contributions.

When in doubt about the compatibility of an action or expenditure with these values, CCGA fundraisers have a responsibility to disclose and discuss the situation with relevant CCGA authorities. For example, traveling must be done with a sense of fiscal responsibility.

Truth telling Fundraisers must communicate, convey, and record information truthfully, accurately, and completely. They must avoid misleading or deceiving.

The CCGA must be truthful in its broadcast and print fundraising and public relation, using factual, current or truly representative information with honest statement of purpose.

Solicitations and informational materials shall include a clear description of the programs and activities for which funds are requested. A brief written statement about policies, program interests, and grant making practices, geographical and policy restrictions, and preferred ways of receiving applications is recommended.

Solicitations in conjunction with the sale of goods, services or admissions shall identify the benefiting organization and the actual portion of the sales price to benefit the CCGA.

Teamwork Success in the CCGA mission is always the result of team effort - staff teamwork, teamwork between staff and volunteers, and teamwork with other partners. CCGA volunteers, directors and staff members must pursue honest and open communication between each other.

Paid fundraisers whether staff or consultants, will be compensated by a salary or fee, and will not be paid finders’ fees, commissions or other payments based on the value of funds raised.

Excellence The value of excellence includes instilling within each member the importance of the CCGA mission, goals, and the role of leadership in achieving them, as well as integrating each member into a productive and functioning team.

Excellence also means recognizing the areas in which members are less strong and working to strengthen those areas so that they can meet their commitment to the organization and its mission.

Duty Fundraisers have a duty to ensure that the legitimate interests of the donor are protected, a duty to avoid manipulation or intimidation, and a duty to seek funds only for motives which are consistent with the mission of the organization.

They must also be scrupulous in their efforts to accomplish the donors’ purposes, to prudently manage all funds, and to direct discretionary gifts to objectives that are open for public scrutiny.

It must be clear however that accepting a donation or entering into a sponsorship agreement does not by itself imply an endorsement of the views, actions or products of the sponsor.

Authorities & Jurisdictions

By adopting a code of ethics, the Canadian Coast Guard Auxiliary commits itself to fundraising principles that respect donors’ rights to truthful information and to privacy. The CCGA also commits to manage responsibly the funds that donors entrust to the organization, and to report their financial affairs accurately and completely.

An organization must have processes by which it can decide if its policy is being obeyed, if thoughtful ethics are being practiced, and if tough ethical dilemmas are being openly considered, and decided.

Organizations regularly face two principal kinds of decision-making:

a) Drawing lines, often to avoid abuse;
b) Making difficult choices among competing or conflicting values. The resolution and justification of conflicting or competing values goes to the heart of ethical decision-making.

Another goal of the CCGA fundraising policy is to prevent donations and sponsoring revenues from being improperly managed. Here are a few potential actions upon which an organization must be ready to take a stand based on the provisions of its Fundraising Policy:

• Actions affecting donors
  • Misusing donor funds; 
  • Divulging donor information;
  • Giving prospects false information.
• Actions affecting the organization
  • Conflict of interest;
  • Improper use of intellectual property;
  • Altering or destroying records;
  • Questionable charges or expenses;
  • Misusing organizational funds;
  • Reporting inaccurate or misleading information.

Setting ethical standards begins with commitment to a process. Adherence to high standards of ethical behavior requires inclusion of all individuals and entities affected by the organization’s work. Such a statement is addressed to grant seekers as well as grant makers, to staff and volunteers as well as trustees. The organization should do everything possible to be certain the process, the documents and the values they reflect become part of the culture of the total organization. In the end, people must live up to ethical principles, even when confronted with personal, professional and social risks, as well as economic pressures.

The policy should lead the organization to avoid actions that could compromise the long-term for the sake of short-term expediency. It also recognizes a dual responsibility to the donors as well as to the institution and the pivotal role the volunteers play in making the CCGA mission possible.

Sharing the Market Another related issue for a national organization like the CCGA is: Who makes the approach to the sponsoring prospect? No company wants to field several approaches from different levels of the same organization.

Red Cross has addressed this in its policy by stipulating that approaches to Canada’s largest companies (as determined by the Financial Post’s listing of the top 500 companies) must be coordinated through the national office to prevent duplication. Local branches are allowed to approach local companies for local support. Canadian Diabetes Association’s draft protocol suggests that right of first approach for national corporations and the top 500 be reserved for the national office, while divisions would get first crack at companies with a provincial focus, and chapters and branches are left free to pursue local business. The CCGA Fundraising Policy agrees with these principles.

Specific Requirements

To take effect, sponsorship agreements/activities must be made in writing and approved by proper CCGA authorities (as determined by the regional board of director). The agreement must spell out exactly what’s been agreed to and who is responsible for what. This can range from a simple letter of agreement to an in-depth contract for marketing driven sponsorship that entails a lot of details and specifics.

An escape clause must be built in to all CCGA sponsorship agreements. The statement should say that: “The Canadian Coast Guard Auxiliary reserves the right to cancel its contract with the company at any time, and to do so at very short notice, should the company’s activities undermine the respect for the CCGA or its emblem.” The CCGA must therefore be able to withdraw from a project and repercussions must be addressed.

Another clause must stipulate that the sponsoring contract in its entirety is subject to the applications, rules and guidelines established in the CCGA Fundraising Policy.

The CCGA must retain control of its logo (Pennant), image and participation. In the case of printed advertisement, Proper CCGA authority must sign off the final film to authorize printing and distribution. The use of the CCGA crest with the Queen The use of the CCGA crest with the Queen The use of the CCGA crest with the Queen The use of the CCGA crest with the Queen’s Crown ’s Crown ’s Crown ’s Crown is prohibited in any sponsorship agreement. prohibited in any sponsorship agreement. prohibited in any sponsorship agreement. prohibited in any sponsorship agreement.

When associating with commercial partners, a method of revenue distribution acceptable to the CCGA must be clearly defined. The commercial partner must be credible and professional. The CCGA must be able to withdraw from the agreement if unexpected partners are included after contractual commitments have been executed.

The CCGA relevant authority should review the cost effectiveness (cost-benefit) of the fundraising program.

The CCGA will meet or exceed Revenue Canada’s requirement for expenditures on charitable activities. (In general, section 149.1 of the Income Tax Act requires all charities to spend at least 80% of their receipted donations on charitable activities.) It is always important to obtain a legal opinion on a project to ensure that there is protection for the CCGA. Will the organization be open to liable suits as a result of the promotion? Can the CCGA be sued? What are the responsibilities and obligations of all parties involved?

Management of funds The organization’s use of funds should reflect consideration of current and future needs and resources in planning for program continuity.

• A reasonable percentage of total income shall be applied to program and activities directly related to the purposes of the CCGA in accordance with donors’ expectations;
• Fundraising and administrative costs shall be reasonable and not exceed a certain percentage of fund raising results. 

All donations/sponsorship revenues will be used to support the CCGA Mission Statement. All restricted or designated donations will be used for the purposes for which they are given.

Independent corporations or societies, which are members of the CCGA, must comply with the CCGA national fundraising policy. They must obtain the authorization from the regional board of director to fundraise using the name of the CCGA and forward the proper percentage of funds raised to the regional fund.

Donor/Sponsor Bill of Rights

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the not-for-profit organizations and causes they are asked to support, we declare that all donors have these rights:

I. To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.

II. To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgement in its stewardship responsibilities.

III. To have access to the organization's most recent financial statements.

IV. To be assured their gifts will be used for the purposes for which they were given.

V. To receive appropriate acknowledgement and recognition.

VI. To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.

VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.

VIII. To be informed whether those seeking donations are volunteers or employees of the organization.

X. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers. 

--Developed by

American Association of Fund Raising Counsel (AAFRC) Association for Healthcare Philanthropy (AHP) Council for Advancement and Support of Education (CASE) National Society of Fund Raising Executives (NSFRE)

Code of Professional Practice

Members and employees of the Canadian Coast Guard Auxiliary are obliged to monitor their personal and professional affairs so as not to discredit the organization.

As stated in the CCGA Mission Statement, Personal conduct of the members should reflect the highest professional standards of behavior. Of course, carrying out all corporate obligations requires a comprehensive ethical perspective that is understood and acted on in every sector and at all levels of the organization.

Also, as educators, CCGA fundraisers need to present a vision of the public good, articulating how their organization contributes toward realizing that vision. They shall obey the following guidelines.

A CCGA member or employee involved in an authorized fundraising/sponsoring activity shall :

1. Act according to the highest standards and visions of the CCGA, their profession and conscience.
2. Avoid even the appearance of any criminal offense or professional misconduct.
3. Be responsible for advocating, within the organization, adherence to all applicable laws and regulations.
4. Contribute to fundraising on a voluntary basis (in the case of a CCGA member), not for a fee, a percentage-based compensation or a commission for obtaining philanthropic funds. On their part, CCGA employees should not have a percentage of their compensation based on fundraising results.
5. Will not hire fundraising consultants on the basis of commissions or percentage-based compensation for obtaining funds.
6. Shall effectively disclose all conflicts of interest; such disclosure does not preclude or imply ethical impropriety.
7. Shall accurately state their professional experience, qualifications and expertise.
8. Shall adhere to the principle that all donor and prospect information created by, or on behalf of, an institution is the property of that institution and shall not be transferred or utilized except on behalf of that institution.
9. Shall not sell, rent, trade or distribute the CCGA lists of members, donors or sponsors.
10. Shall not disclose privileged information to unauthorized parties and keep constituent information confidential.
11. Shall ensure that all solicitation materials are accurate and correctly reflect the CCGA's mission and use of solicited funds.
12. Shall, to the best of their ability, ensure that contributions are used in accordance with donors' intentions.
13. Shall ensure, to the best of their ability, proper stewardship of contributions, including timely reporting on the use and management of funds and explicit consent by the donor before altering the conditions of a gift.
14. Shall ensure, to the best of their ability, that donors receive informed and ethical advice about the value and tax implications of potential gifts.
15. Shall not exploit any relationship with a donor or prospect to his/her own personal benefit.
16. Shall use accurate and consistent accounting methods that conform to the appropriate guidelines adopted by the Canadian Institute of Chartered Accountants.
17. Shall comply with all applicable local, provincial and federal civil and criminal laws.

Adapted from Standards of Professional Practice NSFRE Code of Ethical Principles, November 1992. Amended March 1993, October 1994, November 1997

Conclusion

This Fundraising Policy is a “living document”. The Policy must be reviewed periodically to meet new circumstances and renewed with employees and volunteers to assure understanding and “ownership” of CCGA principles.

References

Association for Volunteer Administration, “Statement of Professional Ethics in Volunteer Administration.” 1998.

Berenbeim, Ronald, “Ethical Principles May Provide Competitive Advantage.” Canadian Fundraiser, 1996.

Briscoe Marianne G. “Ethics in Fundraising: Putting Values into Practice.” Indiana University Center on Philanthropy, 1994.

Burlingame, Dwight F. “Critical Issues in Fundraising.” NSFRE/Wiley Fund Development Series, 1997.

Canadian Centre for Philanthropy, “Ethical Fundraising & Financial Accountability Code.” 1998.

Committee on Values and Ethics. “Ethics and the Nation’s Voluntary and Philanthropic Community: Obedience to the Unenforceable.” Washington, D.C.: Independent Sector, 1991.

Distelhorst, Michael, “Searching for an Ethical Approach to Fundraising.” Canadian Fundraiser, 1995.

Josephson, Michael, “Making Ethical decisions.” Josephson Institute of Ethics, 1996.

McClintock, Norah, “Why you Need a Sponsorship Policy and How to Get One.” Front & Centre, 1996.

National Society of Fund Raising Executives, “Code of Ethical Principles and Standards of Professional Practice.” 1997.

Philanthropic Advisory Service, “Standards for Charitable Solicitation.” Council of Better Business Bureaus, 1997.

United Way, “Discussion Paper on United Way Involvement with Cause-Related Marketing Activities.” 1990.

Young, Dennis R., “Accountability: The Key to Keeping the Nonprofit on Course.” Canadian Fundraiser, 1996.

Motion

The Canadian Coast Guard Auxiliary hereby adopts the Statement of Ethical Principles, Donor Bill of Rights and Code of Professional Practice as its National Fundraising Policy. In so doing, members of the National Council and Regional Boards of Directors commit to being responsible custodians of donated funds, to exercise due care concerning the governance of fundraising and financial reporting, and to ensure to the best of their ability that the organization adheres to the provisions of the policy. It is hereby confirmed that each member of the Council and Boards Members will receive a copy of the documents and that a copy will also be provided to each person who is subsequently elected to the CCGA governing instances.

Harry Strong
Chief Executive Officer

Robert Petitpas
President, Laurentian

Winston Pitcher
President, Newfoundland

Craig Dunn
President, Pacific

Norm Lloyd
President, Central & Arctic

Frank McLaughlin
President, Maritimes