False Expectations: The Danger of Creative Campaign Reporting
Wednesday, November 29, 2017
By Jessica Browning, Senior Vice President, Winkler Group
In 2006, CASE created a Campaign Standards Working Group. The nature of fundraising campaigns was changing, and CASE recognized the need for standards that schools, colleges, and universities could use to benchmark their campaigns against peer institutions. John Lippincott, CASE President at the time stated, “revisions were warranted due to the rapid growth in the scale of campaigns, the need for greater transparency…and the growing variety and complexity of revenue sources.”
More than 10 years later, the trend towards larger and larger campaigns continues. So does the possibility for creative accounting that enables organizations to exaggerate results. Should we, as fundraising professionals, be concerned?
Inflated campaign goals and alternative reporting of campaign gifts occur across all philanthropic sectors and within all sizes of organizations and institutions. Nonprofits double count; they count loans, licensing agreements, and government grants; they inflate the value of donated items to report progress towards campaign goals. These practices are not illegal, but they are unethical. Because campaign audits are not a required practice, accountability is tenuous.
This creative reporting towards ever-larger campaign goals is a danger to the organizations we serve. Fundraisers who encourage organizations to secure a loan as a lead gift, or book a loan as part of the amount raised, are irresponsible. Fundraisers who suggest that board members serve as signatories are reckless. If the organization defaults on the loan, donor trust could be lost. Donor’s gifts may then be used to service debt, instead of launching a new program or building a new building as they were promised.
Organizations that count the inflated value of property towards a campaign goal face similar challenges. When they sell the property, and realize only a fraction of the origin value, the ability to fulfil campaign priorities is undermined and donor trust is once again lost.
Counting government tax credits or licensing proceeds towards the goal is also problematic. Campaigns are designed to encourage philanthropic giving from the private sector, and these proceeds are revenue, not charitable gifts.
The driving force behind campaign goal inflation and creative reporting is human nature. Call it one-upmanship or ego, but we feel the need to keep up with our peers, and outdo our competitors. Boards, leadership, and staff are all guilty of fueling the fire. And when we let hubris take the place of data-driven goal setting, we all suffer, especially our donors and the missions we strive to advance.
As professional fundraisers, we should all be concerned about the trend towards ever larger and unrealistic campaigns. But we must also take action.
Take a minute to review recommended guidelines from CASE and from the National Association of Charitable Gift Planners. AFP endorses these standards.
We can help by educating the organizations and institutions we serve. As fundraising professionals, we can insist on robust feasibility studies and goal amounts that are based on data, not dreams. We can include board members and trustees in these conversations. We can establish guidelines and gift acceptance policies that avoid overcounting.
If we don’t address these issues, we perpetuate a cycle of unrealistic goal expectations. We risk donor fatigue and alienation; we violate the ethics of fundraising and jeopardize the cultures of philanthropy we have worked so hard to create.
To read more about the hazards of creative campaign accounting visit:
Cooking the Books: How Nonprofits Make Inflated Claims About Their Fundraising Success