Why Fundraising Ethics and Transparency Matter

What motivates people to donate to nonprofits and support other types of organizations? You may be surprised to learn that some of the most common reasons have to do with ethical frameworks—altruism, religious faith, and, for up to 96% of donors, a sense of duty to help others and give back.

This means that many of your ideal supporters prioritize and respect ethical behavior. They want to know that you’ll follow through on promises, steward resources wisely, and achieve results. 

While you could simply argue that it’s the right thing to do for your fundraising strategy, there are also concrete benefits to following a defined set of ethical principles, including transparency, in your fundraising efforts. 

Fundraising ethics and participation

A good cause is key to any fundraising appeal, whether you’re looking to help with school needs, purchase new sports team uniforms, or support relief efforts for your community. However, some folks need more than an elevator pitch to determine whether the organization is making headway on that cause. 

Acting ethically and providing transparency in your process and results allows you to connect with more individuals and increase participation and retention. 

Building trust in this way encourages participants and families to invest in your cause with both time and money. After all, if you show them clearly where their dollars and support are going, they’ll be more inclined (and excited!) to join in. 

Organizational credibility 

One way to showcase your organization’s credibility is through nonprofit ratings, which can assure the public of your group’s financial health, including overhead vs. program spending. Even if your group or organization isn’t at a scale to invest time in nonprofit rating services, it’s worth understanding their effects. 

Although they’ve added some new categories that are harder to rate objectively, Charity Navigator has long focused on assigning zero to four stars to over 225,000 nonprofit organizations based on financial health, accountability, and transparency. A 2023 study showed that donations increased 6-12% when the organization jumped from two to three stars or three to four stars.

Ultimately, providing clear, detailed, and accurate fundraising reporting enhances your credibility as an organization. 

Long-term relationships and loyalty 

With trust and credibility comes long-term relationships, which provide support you can depend on from month to month.

Sponsors, fundraising participants, and other long-term supporters also gain from these loyal relationships. That’s because they don’t have to start from scratch each season or year to: 

• Research where their money goes
• Vet organizational practices
• Set up payment options in new systems

But all of that relies on trust, and in order to stick with you for the long haul, they need to trust that your reporting on fundraising and results is accurate. 

Risk management

Does it really matter if you tweak the numbers a bit or sprinkle a few exaggerations into the annual report? While you may see some short-term relief from pressure or disappointment, the long-term risk isn’t worth it. 

Even within small organizations, there’s always a possibility of a financially savvy supporter or insider shining a light on the issue or demanding supporting details. At worst, trust is broken in honesty or misuse of funds. At best, there’s an appearance of incompetence. Either way, your organization can suffer significantly.

Following a strict set of ethical guidelines and avoiding the actuality or appearance of hiding or misrepresenting information will significantly reduce the risk of a significant ding to your organization’s reputation—and bottom line. 

How RaiseRight can help 

Fundraising transparency and fundraising ethics are essential for building trust with your participants and fostering loyal, long-term relationships. That’s why RaiseRight fundraisers allow you to allocate your participants' earnings as you wish and decide how the earnings are applied. 

RaiseRight is a passive, all-in-one fundraising program that enables your supporters to raise money without the extra effort or cost. Simply buy gift cards, shop online, or dine at participating restaurants to earn up to 20% back for your organization. With hundreds of brands available, including big names like Nike, McDonald’s, and Walmart, fundraising with RaiseRight is convenient, effortless, and doesn’t require out-of-pocket spending.

You can delegate a percentage of funds toward your general budget or specific causes, or allocate funds directly back to families to cover their fees or expenses. RaiseRight offers unmatched flexibility—you can run the program your way, using built-in reporting tools that make your fundraising clear, organized, and fully transparent.