How to Get the Most Out of Your Fundraising Professional

Sasha Herzig on February 24, 2014

The bread and butter of many non-profit organizations comes from fundraising events and campaigns.

With all the daily tasks involved in running a successful charity, it’s no wonder that many organizations choose to seek outside help when planning fundraisers. So let’s talk about what goes into professional fundraising.

Professional Fundraiser vs. Fundraising Counsel

A professional fundraiser is someone who is compensated to work with a charitable organization in planning, managing, conducting or otherwise assisting the organization with solicitations for charitable donations. This includes employing another person to assist with charitable solicitations. A Professional Fundraiser may directly solicit on behalf of a charitable organization.

Fundraising counsel is any person who is compensated to consult with a charitable organization on that organization’s solicitations, but does not have access to such contributions and does not have the authority to pay expenses associated with such solicitation, or to solicit on behalf of the charity.

The main difference: A professional fundraiser may actually solicit on behalf of an organization, while fundraising counsel may only advise an organization on how to solicit, but does not actually have the authority to perform the solicitation. (Please see Executive Law § 171-a for complete definitions of “professional fundraiser” and “fundraising counsel”, collectively referred to as “fundraising professionals.”)

Professional fundraisers should register with form CHAR 013 and file an annual bond form CHAR 015. Professional fundraisers should use CHAR 037 when filing their interim/closing statement.

Fundraising counsel should register with form CHAR 014. Both professional fundraisers and fundraising counsel should use CHAR 016A/016B for contract filing certification and addendums to contracts with charitable organizations.

What to do Before Contracting with a Fundraising Professional

First, do some homework on your own end. Charitable organizations should make sure they are in compliance with the Charities Bureau and are current in their annual filings before working with a fundraising professional – please see CHAR 410 and CHAR 500.

Next, we highly recommend you diligently research your potential fundraising professionals.

Remember – the decisions a fundraising professional makes on behalf of your organization will be a direct reflection of your charity’s work.

  • 1. Double check that potential fundraising professionals are also registered with the Charities Bureau and in compliance with filing requirements. Fundraising professionals are required by law to register annually and file fundraising contracts with the Attorney General’s Office.
  • 2. It would also be helpful to contact the Charities Bureau and request copies of contracts that potential fundraising professionals have used with other charitable organizations. Additional information, such as financial reports of fundraising campaigns and annual report of telemarketing campaigns can also be obtained for review before choosing a fundraising professional.
  • 3. Some questions to consider when interviewing professional fundraisers include:
  • How would they conduct your campaign?
  • What methods of solicitation would they use?
  • Will they be selling products or tickets to events?
  • Will the fundraiser be using subcontractors for any part of the campaign?
  • 4. It’s okay (and suggested) to ask fundraising professionals for references from past clients. Ask other charitable organizations for feedback on fundraising professionals with which they have worked, including:
  • Whether they met their contractual obligations.
  • If there were any problems.
  • What type of soliciting they engaged in and how much was raised.
  • 5. Once you decide on a fundraising professional, you must obtain written confirmation from the fundraising professional stating that they are in compliance with the Attorney General’s fundraiser registration and filing requirements. You should also double check with the Attorney General to make sure the fundraiser is properly registered.

The Contract: What Must be Included

Any organization working with a fundraising professional is required to have a written contract. The fundraising professional is required by law to file this contract with the Attorney General within 10 days of signing.

New York law requires that fundraising contracts include the following provisions:

  • Names, addresses and registration numbers of both parties to the contract, as well as the dated signatures of the fundraiser and the charity.
  • Beginning and expiration dates of the contract.
  • If the fundraising professional is directly receiving funds on behalf of the charity, all funds solicited must be deposited in a bank account exclusively controlled by the charity within 5 days of receipt.
  • A statement that the charity has the right to cancel the contract without cost, penalty or liability within 15 days after the fundraiser has filed it with the Attorney General.
  • Clear descriptions of the services to be provided by the professional fundraiser and the financial terms of the contract.
  • Dated signatures of each contracting party.

The Contract: Extras to Consider

When contracting with an outside professional, it is important to have an agreement drafted that will encourage success, positive publicity and financial security. As every charity and fundraising event is different, there is no one contract that will work for everyone.

Some things to consider including in your fundraising contract are:

  • Ownership of donor lists – Who owns your organization’s donor list and if you want it to be available for rent.
  • Renewal clauses – When the contract expires and specific reasons to terminate the agreement.
  • Exclusivity – Whether one fundraising professional has exclusive rights to work with your charitable organization.
  • Compensation – New York law does not specifically prohibit percentage-based compensation agreements, finder’s fees or contingent fees. However, members of the Association of Fundraising Professionals would be in violation of AFP’s Ethics Standards if they were to accept percentage-based compensation, finder’s fees or contingent fees.
  • Auditing of campaign results – When results may be audited and whether there are specific intervals of time to do so.
  • Control over outgoing communications – The right to review all communications made on behalf of the charitable organization before those communications become public (emails, newsletters, speaking engagements, telephone solicitations, etc.).

After the Contract is Signed – How to Ensure Your Fundraiser is a Continued Success!

The Attorney General suggests the following for charitable organizations, after contracting with the fundraising professional:

  • Regularly obtain and review copies of all invoices and receipts for expenses incurred by the fundraising professional.
  • Make sure that all outside vendors used for the charity event or hired on your behalf by the fundraising professional are paid on time.
  • Maintain regular communication with the fundraising professional throughout the contract period.
  • Be sure to receive periodic accountings of the fundraising campaign and make sure that the fundraising professional maintains accurate and current records of gross revenue received and expenses incurred.
  • Review telemarketing and training materials used by the fundraising professional.
  • After the expiration of a contract with a fundraising professional, or on an annual basis if a contract is for more than a 1-year period, make sure that the professional fundraiser prepares a Professional Fundraiser Interim/Closing Statement, which must be filed by the professional fundraiser within 90 days of the contract’s termination date or anniversary date (if more than 1 year).

Following these guidelines will help you to have a successful and positive fundraiser for your organization.

As you can see, there are quite a few steps involved. It’s helpful to have an attorney review any fundraising contracts before signing them to make sure all the requirements are met, as well as any necessary clauses which should be included specific to your charity.

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