Fundraising Guide (English) June 2014 - Page 16

basic grantmaking requirements. Donations given for charitable purposes are exempt from tax; however, donors need to document that the recipient of the funds is a registered charity. This means that most donors give to organizations registered in their country. If an individual or organization gives a grant to a non-registered group, they need to prove that the gr oup is charitable in purpose. This can be a complex process, which means that most people and foundations limit their giving to domestically-based groups. This makes it more difficult for small grassroots groups in developing countries to raise money from international sources. ETHICAL FUNDRAISING Before you start raising money, it is important to make sure that your organization has clear guidelines and policies that state from whom you can and cannot accept gifts. You should develop these through discussions with your key stakeholders, including your staff, leadership, board of directors, and advisors. At times, accepting money or in-kind gifts from particular institutions or individuals can undermine the credibility of your organization or show a conflict of interest. For example, an organization that works to protect the environment may not want to accept money from an oil company. However, some funds have been created to collect donations from individuals and groups who want to give to international charities, but also want to receive their tax deduction. These funds act as an intermediary: they have tax exempt status and have the ability to handle the complex legal paperwork required to make international grants – such as processing international electronic bank transfers, exercising due diligence to make sure grantees are legitimate groups doing good work, and meeting anti-terrorism requirements. These funds, like the Global Fund for Women, give grants directly to communitybased organizations internationally and usually accept unsolicited applications (proposals from new applicants who have no prior relationship with the funder). These funds also give small grassroots groups the opportunity to learn how to manage international grants and establish a good track record, traits that help to attract new donor prospects. If you put relevant policies and procedures in place early on, you can avoid problems for your organization down the line. Make sure all your staff and supporters who are involved in fundraising understand these rules before they go out and ask for money. Fundraisers are also subject to ethics rules. In the U.S., it is considered improper for a fundraiser to receive payment based on the percentage of funds raised (like a sales commission) or to receive individual bonuses based on meeting certain funding targets. Likewise, organizations limit the value of gifts that a fundraiser can accept from or give to a donor or prospect. For more information on these ethical guidelines, see the Association of Fundraising Professionals’ website: www. afpnet.org/ethics/ 13