Dear Governance Matters,
I recently joined the Board of a non-profit that has no executive director. We do have a consultant who secured a potentially sizable donation and has requested a percentage of the revenue brought in. Is there a cap (by law) on the percentage of money raised that is paid to a consultant who did the fundraising for a non-profit?
While I don't think it is illegal to pay a bonus based on fundraising success, it is certainly not best practice.
Indeed, I think many would frown upon it as a way to do business. I also imagine donors would be quite dismayed to discover that a hunk of their donation is going to the consultant rather than to the organization. Transparency should be always be part of the transaction.
The Association of Fundraising Professionals has a section on ethics that I urge you to check out.
Editor, Ask the Experts