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AFP Ethics Code Expanded to Include Businesses

December 3, 2007

(Oct. 29, 2007) AFP’s Code of Ethical Principles and Standards of Professional Practice has been amended and expanded to apply to for-profit businesses involved with or supporting fundraising.

The changes, which include the addition of seven new standards and the alteration of one standard, now allows for-profit businesses to join AFP as members and actively promote ethical and efficient fundraising.

AFP  traditionally has been an individual-based membership association and now represents more than 29,000 charitable fundraisers around the world. However, the tremendous growth of fundraising has led to the creation of numerous for-profit businesses working in the charitable sector, making it imperative for ethical standards to be promulgated beyond just those individuals who directly raise funds.

The changes do not alter or lower in any way the standards that AFP applies to all its members, who are required to sign the association’s code of ethics annually.

“Thousands of organizations have sprung up that provide services and programs to the fundraising profession, from computer software to key chains” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “Yet, with the exception of standards for consultants, such as those set forth by the Giving Institute, there are few if any guidelines or codes for these organizations in terms of ethical behavior related to charities and other clients. Organizations have come to us and asked how they could fall under the code’s standards and principles, and the new changes accommodate these entities.”

The new standards relate to how business members interact with charities and their responsibilities to their clients. The new standards include:

Standard 7: Members shall present and supply products and/or services honestly and without misrepresentation and will clearly identify the details of those products, such as availability of the products and/or services, and other factors that may affect the suitability of the products and/or services for donors, clients or nonprofit organizations.

Standard 8: Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during and after any sale of materials and/or services. Members shall comply with all fair and reasonable obligations created by the contract.

Standard 9: Members shall refrain from knowingly infringing the intellectual property rights of other parties at all times. Members shall address and rectify any inadvertent infringement that may occur.

Standard 10: Members shall protect the confidentiality of all privileged information relating to the provider/client relationships.

Standard 11: Members shall refrain from any activity designed to disparage competitors untruthfully.

Standard 23: Members shall neither offer nor accept payments or special considerations for the purpose of influencing the selection of products or services.

Standard 25: Any member receiving funds on behalf of a donor or client must meet the legal requirements for the disbursement of those funds. Any interest or income earned on the funds should be fully disclosed.

In addition, language has been added to Standard 21 so it now reads (new language in italics): Members  shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees. Business members must refrain from receiving compensation from third parties derived from products or services for a client without disclosing that third-party compensation to the client (for example, volume rebates from vendors to business members).

Maehara noted that the charitable sectors in the United States and Canada both account for more than 7 percent of each country’s Gross Domestic Product and employ millions of individuals. “These changes will increase the prevalence of our code of ethics in the business community at a critical point when organizations and their vendors are raising billions of dollars annually,” said Maehara. “We hope these new standards will help unify the profession—and those organizations that support it—and promote ethical and effective fundraising.”

Maehara thanked AFP’s Industry Partners Council, led by Robert E. Carter, CFRE, vice chairman of Archimede Philanthropy Partners in Sarasota, Fla., and the Ethics Committee, chaired by Janice Gow Pettey, CFRE, principal, J. G. Pettey & Associates in San Francisco, for their work and guidance in developing the new standards.

A copy of the amended AFP Code of Ethical Principles and Standards is available below and will be sent to all members. Guidelines for the new code will be available in the near future.

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