Commissions
(Added 3/10/2009)
Why is "commissions" such a dirty word when it comes to paying fundraisers? The for-profit world, in almost every sector, pays its salespeople based on what they earn for their companies. I know the ethics codes of the National Association of Charitable Gift Planners and the Association for Fundraising Professionals say that paying fundraisers is wrong. But why? The reason I ask is that, in this economic crisis, I've been offered a job by a charity that says it will pay me based on what I raise; they have made it clear that it is a commission-based position. I was recently let go from another job and I need to do something. I've pretty much decided to take the job, but I still want to know what you have to say about this matter.
While no one can force you not to take the job or prevent the charity from offering it - there is a reason that charity groups have concluded that commission-based fundraising by employees of charities is wrong. At its highest, the principle is part of what I have come to call the "nonprofit ethos," a philosophy that distinguishes the way business is done at charities from the way it is done at for-profit companies. While the donor certainly expects employees of charities to be paid, the amount of payment should not be a function of the amount of the gift. A restaurant server's gratuity is appropriately a function of the total bill (this enhances his or her meager salary), but a donor who is considering a larger gift will, with reason, deplore the idea that the increased amount will line the pockets of the solicitor and not fully help the charity. People who professionally migrate from the for-profit world into the nonprofit world find this ethos particularly difficult to grasp, but the difficulty of understanding a concept that has merit is no argument to abandon it.
There are also practical factors at work here. What about a pledge? For accounting purposes charities often record, not only the amount that the charity receives in that year, but the whole pledge. If a donor eventually does not pay the amount he or she has promised, even though the pledge was in a written document, how can anyone claim that the solicitor who was paid on the basis of the pledge amount - and who may no longer work at the charity - has been properly compensated? Even when the pledge is paid, the solicitor may be paid ahead of the time when the charity gets the money. With deferred gifts the idea of commissions is even worse. Even if the charity pays based on the remainder value of an irrevocable gift, which some charities have suggested to me, the fact is, aside from gift annuities (which, of course, are not deferred gifts), the charity physically doesn't have the money - and won't for a long time. All of this dilutes the amount available for the charity to serve its community. (High salaries and bonuses, as well as hired outside solicitors, are fodder for other questions and responses.)
A quote comes to mind (translated from Bertolt Brecht's Threepenny Opera): "First grub, then ethics." Of course economic considerations often play a role in how we decide to behave (Jean Valjean comes to mind), but when a charity makes the claim that it is better off collecting part of a gift than collecting nothing, I hear a specious and convenient line of reasoning. Is the only alternative to a commission . . . no gift at all? No. Good practice and success at charities over the decades prove that. A first-rate charity and a first-rate fundraiser will adhere to high and principled conduct. If a principle is solid and the argument against paying commissions to charity employees who solicit charitable gifts is then it cannot be watered down, even when times are tough.