Looking Back with Ron Brown: Part II

Without the CANARAS Planned Giving Council, the Model Standards of Practice for the Charitable Gift Planner might never have been given life. CANARAS, a council limited to 15 gift planners from colleges and universities, takes its name from its meeting place on Saranac Lake in New York State; CANARAS is Saranac spelled backward. In 1974, gift planners began meeting there in a small-group format to discuss the issues of the times. Brown recalls that after passage of the Tax Reform Act of 1986, a major topic was ethics: some financial planners were promoting charitable remainder trusts as tax shelters, and requiring that charities pay a finders fee for delivery of a planned gift.

Ron Brown writes in his essay "The First Ethical Standards for Gift Planners: A Fledgling National Association Earns its Wings" that the group was so alarmed by these unethical practices, in 1989 they issued a call to action: the CANARAS Convention. In 1990, with help from the late attorney David Donaldson and Jonathan Tidd, the group produced a more practical code of ethics entitled the CANARAS Code. Brown points out that these formed the heart of NCPG's Model Standards (the CANARAS Code and Convention, as well as the original Model Standards, are reprinted in his essay).

Brown's historical essay recalls the troubled beginning of NCPG, with its failed attempts at developing an effective and widely-accepted code of professional ethics for gift planners. "Frank Logan deserves a lot of credit," according to people interviewed by Brown in oral histories he conducted. Logan, the gift planning director at Dartmouth College, was President of CANARAS at the time. "Frank was the perfect spokesperson to warn of a clear threat to the spirit and the laws of charitable giving," Brown says. Instead of high-minded abstractions, the CANARAS Code provided clear, practical guidelines for practitioners.

When Frank Minton, Tal Roberts, Terry Simmons and other pioneers of NCPG began drafting the Model Standards, they used the CANARAS Code as the foundation, and added concepts found in the ethical codes of other professional associations. "NCPG looked at NSFRE (the National Society of Fundraising Professionals, now AFP, the Association of Fundraising Professionals) and CASE (the Council for the Advancement and Support of Education), but the heart of our Model Standards is found in the CANARAS Code."

While the Model Standards was widely embraced after their adoption by NCPG in 1991, not everyone agreed. Brown writes that the "National Association for Hospital Development (NAHD)," for example, "refused to endorse the Model Standards" on the basis that they might violate antitrust laws, leading members of NAHD to bring lawsuits alleging restraint of trade. Minton, NCPG's president at the time, wrote to assuage the health organization's concerns. "The remote possibility that the Federal Trade Commission may still find our statement unacceptable is, in our opinion, outweighed by the following considerations: 1) The I.R.S. has indicated that if we don't follow the CANARAS Code (which essentially agrees with our statement on fees), corrective action will be taken; 2) The payment of commissions on gifts may cause the Securities and Exchange Commission to regulate them as securities; 3) Commissions and fees as a condition for delivery of a gift lead to abuses which, in turn, result in adverse publicity."

Ron Brown says, "NCPG deserves a lot of credit for standing up and saying: to hell with possible lawsuits; we need to defend the central importance of charitable intent. If we don't take a strong stand, we're in danger of losing the charitable deduction." The IRS, he also notes, "appreciated that NCPG stood up and did that."

Ethical decision-making is never easy, but we can thank members of CANARAS and other early pioneers in our profession for providing a solid basis for us to make those decisions. And thanks to Ron Brown for writing an important history of how the Model Standards came about.