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/
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