When Scandal Hits 

  Over the past month, there has been a tremendous amount of publicity surrounding the questions of  "Three Cups of Tea" founder Greg Mortenson and his nonprofit organization, the Central Asia Institute.  He joins the ranks other nonprofits who have gotten headlines for less than stellar behaviors.  Because he is a best-selling author with a huge following, his story gets told on "60 Minutes" instead of the local throwaway where most nonprofit scandals get told.

  Unfortunately, when controversy strikes someone as visible as Mr. Mortenson, it brings up questions for all nonprofits.  However, studies conducted by the Association of Certified Fraud Examiners have found that nonprofits account for far fewer fraud cases than those in for profit businesses, both publicly traded and privately held, and government. 

Still, scandals do occur and it is in the best interest of every nonprofit to both have a written code of ethics and-more importantly-to ensure that the leaders of the organization model ethical behavior. 

In 2004, in response to the scandals of that day, Guidestar published an article (article ) by Elizabeth Schmidt in which she outlines principles of ethical decision-making.  When making a decision, "a good rule of thumb," she writes, "is to ask whether you would want to be treated the same way and whether you would be comfortable seeing your decision on the front page of the local newspaper."  That, as Schmidt points out, is a valid rule for whatever sector you may work in. 

Nonprofits, however, "have another guiding principle: no one individual is to profit from the organization."  It is this that shapes who we are (and why we are nonprofits-not, as too many would wrongly assert that our organizations cannot end up the year with a surplus). (READ MORE )

The Right Ask    

 Someone, somewhere famously said "successful fundraising is the right person asking the right prospect for the right amount for the right project at the right time in the right way."  That's a lot of rights to get, well, right. 

  I could spend pages writing about how to solicit prospects strategically and successfully.  I teach those skills frequently. Right now, however, I want to concentrate on a piece that is too often overlooked-asking for the right amount. But I want to look at that from an aspect that is too often overlooked.

  Generally, when we talk about the right amount for a charitable gift, we are considering the prospect's capacity.  That is, at what level can this donor support us?  To answer that, a wise organization looks not just at the prospect's assets, but also at the level of interest and involvement the donor has with your organization.  We call that "inclination," as in "How inclined to support you is this prospect?"

  That's a valid consideration, but it is only part of the equation.

  Recently, I was doing a fundraising training for the board of a very small nonprofit.  Their operating budget is less than $200,000.  The largest charitable gift they've ever received was a grant for $100,000-given over 3 years.  Typically, a large gift would be under $3,000.  Most gifts had far fewer zeroes.

  Where-realistically-should board members put their focus?  The Board chair wants the concentration to be on large gifts.  He defined that as 6 figure gifts.  But is that realistic?  Why would anyone want to make a gift that was at the low end 50% of the total annual budget (unless it was a multi-year gift)?  Most major donors (and I am including private foundations here) don't want to be responsible for that much of your financial needs.  Charitable gifts and grants must be scaled to your size. (READ MORE )