Ethical fundraising requires both courage and clarity. It means having the discipline to decline funding opportunities that don’t align with your mission, even when the potential financial benefit is significant. It also means communicating honestly and transparently with donors, especially when conversations become difficult. Neither is optional. Together, these practices protect the trust that makes long-term donor relationships possible.
When the Money Comes Looking for the Mission
Most fundraisers are trained to go after resources. Fewer are trained to recognize when resources are coming after them, and to ask whether that is a good thing.
About a decade ago, as a Chief Development Officer, I unexpectedly received a call from a foundation director based an hour outside our service area. Our organization did serve some families from that region, but we had never had an internal conversation about formally expanding services there. The funder wanted us to establish a presence in their community, including a building, and they were offering funding to help make it happen.
My first question was simple: Had they identified a pressing need in the community? They noted a need but acknowledged it was anecdotal. Without a completed needs assessment, it felt more like an assumption than an established need.
My second question came from years in fundraising: Was this transformational funding enough to fully underwrite the project? It sounded significant, but not nearly enough to cover the entire cost. Those two responses to my questions changed everything.
If the funding had been sufficient to fully underwrite the expansion, it might have justified a serious strategic conversation. But it wasn’t, and what I was looking at instead was fundraising pushing the direction of our services, rather than community need and our own strategy driving where and how we raised money. When a generous offer arrives, the instinct is often to find a way to make it work. Saying yes, though, would have meant shaping a program around a funder’s interest instead of a documented, on-the-ground priority.
I told the funder I would bring the opportunity to our board, and I was honest with them at that moment: I thought it was unlikely we would move forward, because allowing funding opportunities to drive strategy can create serious organizational problems down the road. The board ultimately agreed, and we declined.
It was not an easy call. Turning down real money, from a funder genuinely trying to help, never feels good. But saying no protected something more valuable than that single gift: our ability to make decisions based on strategy and evidence, not just opportunity. It also protected our credibility with that funder. Because we were candid from the first conversation, the relationship remained positive, despite saying no.
Boundaries Require Honesty
It is tempting to think of “knowing when to say no” and “being transparent with donors” as two separate items on an ethics checklist. In practice, they are the same muscle exercised in two directions.
A vague or evasive “no” can be nearly as damaging to donor trust as an unethical “yes.” If I had simply gone quiet on that funder, or given a soft non-answer, I would have wasted their time and left them guessing. Instead, transparency about our hesitation, in real time, made the “no” defensible and even respectable.
That commitment must hold after a gift is accepted, not just before. If a restricted gift can no longer be spent as intended, or funds sit unused longer than a donor might expect, proactively saying so is transparency in practice. Silence erodes trust just as quickly as a vague “no” would have up front. This principle sits at the center of the Donor Bill of Rights, jointly developed by AFP, CASE, AHP, and the Giving Institute, which holds that donors are entitled to know how their gifts are used and to receive prompt, truthful answers.
This is also where the fundamentals of relationship-based fundraising, the donor-centered approach taught in Sanford Institute of Philanthropy’s Cause Selling curriculum, come into play. Cause Selling is built on understanding a donor’s motivations through honest, two-way conversation rather than a persuasion-driven pitch. That principle works both ways: we ask donors to be candid about their intentions and capacity, and they deserve the same candor from us about our mission, our limits, and our reasoning when a yes changes shape after the fact.
The AFP Code of Ethical Standards reflects this same principle, calling on fundraisers to act with fidelity to the mission and values of the organizations they serve, not simply the availability of funding. BoardSource similarly frames the board’s duty of obedience as remaining faithful to the organization’s mission, exactly the role our board played in that decision. And the Grant Professionals Association Code of Ethics offers similar guidance for those navigating funder relationships in the grant-seeking space, where mission fit and funder intent can just as easily pull apart.
The Takeaway
Ethical fundraising is not about having a rule for every situation. It is about building the judgment and courage to pause when something feels backward, even when it is dressed up as good news. Being honest rather than avoidant is not a failure of fundraising. It is fundraising done right, and it is only possible when transparency is practiced consistently, especially in hard conversations.
Author Bio: Joelle is a Partner with Pathway Group and a highly successful and sought-after consultant, changemaker, fundraiser, and executive leader with 25 years of professional nonprofit experience. She is skilled in interim leadership and executive search, fundraising, strategy development, governance, and board relations. Connect with Joelle on LinkedIn or via email at joelle@pathwaygroup.co.
