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Fundraising Professional Hail New York Case Settlement, Encourage Donors to Take Wise Giving Steps

July 21, 2014

(Arlington, VA)  The Association of Fundraising Professionals (AFP) applauds the recent investigation by the New York State Attorney’s General Office into the Disabled Veterans National Foundation (DVNF), calling it a victory for ethical charities and fundraisers.

According to a press release by the Attorney General’s office, two of DVNF's outside fundraisers, Quadriga Art and Convergence Direct Marketing, are alleged to have engaged in fundraising abuses, "including misleading solicitations and failure to disclose conflicts of interest." The investigation resulted in a settlement (Assurance #14-145) calling for damages against the two firms and changes to DVNF’s governance and operations.

“This isn’t an issue about the effectiveness of direct mail, or about fundraising costs or methods,” said Andrew Watt, FInstF, president and CEO of AFP. “It’s about charities and fundraisers living up to their ethical standards and obligations. This is an isolated incident, but it’s an important one because it’s an opportunity to highlight what ethical charities do in their direct marketing and how donors can make wise giving decisions.”

Watt noted that direct mail is a critical component of many charities’ fundraising programs, and that direct mail throughout the years has been an important way charities have educated donors about new issues and raised funds to address those issues. According to the recent Nonprofit Research Collaborative’s 2013 Year-End Fundraising Survey, 87 percent of charities use direct mail to raise funds.

“AFP encourages all donors to practice wise giving and learn more about the charities they intend to support,” said Watt. “If you get a piece of direct mail from a charity that looks interesting, look up the organization online. Learn what it really does. Ask the charity questions. Take your time and make good, informed choices, and you’re going to find that nearly all of the 1.2 million charities in the U.S. are working effectively and ethically on their causes.”

It is worth noting that the settlement prohibits Quadriga from using a funded model arrangement whereby, according to the Attorney’s General Office, “the fundraiser assumes the up-front printing, packaging and mailing costs of the direct mail campaign, and is paid only out of the revenues brought in by the campaign.” In exchange, the fundraiser gets control of the charity’s donated revenue and a lien on the charity’s donor list.

“Charities should never give up control of their donor list,” said Watt. “A charity’s donor list is the key to its growth—a group of tried-and-true donors who believe in your cause and have developed a connection with your organization. If you don’t treat your donors well—or relinquish control of that list to third parties who may not treat and cultivate your donors as capably—you will find success elusive. Worse yet, you could have a group of justifiably angry donors who no longer believe in your cause.”

There are numerous ethical standards about direct mail and fundraising in general, including AFP’s Code of Ethical Principles and Standards (which all members are required to sign annually) and the Donor Bill of Rights, both of which are available on the AFP website: http://www.afpnet.org/ethics.

AFP is available for more information and comments about ethical fundraising and the impact and effectiveness of direct mail.

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Since 1960, the Association of Fundraising Professionals (AFP) has inspired global change—helping nonprofits and charities and supporting fundraising efforts that have generated more than $1 trillion. AFP advances effective and ethical philanthropy by providing advocacy, research, education, mentoring, collaboration and technology opportunities for the world’s largest network of professional fundraisers. AFP’s more than 30,000 members raise more than $100 billion annually, equivalent to more than one-third of charitable giving in North America, with millions more generated around the world. For more information, go to www.afpnet.org



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