Lessons for the Social Sector from the Freedom Convoy 2022 fundraiser
In January, a convoy of truckers travelled across Canada to participate in a protest against COVID-19 public health restrictions. The protest fuelled controversy in several ways, including around the Freedom Convoy 2022 fundraiser on GoFundMe. In a few short weeks, the fundraiser raised more than $10 million–much of which came from outside of the country. The social crowdfunding platform was quick to pause the fundraiser, and has since refunded much of the money. But other forms of gift-giving have followed. And the public is calling for increased charity accountability.
The situation has brought to the forefront the significance of having a plan and process for spending the money you raise – and reporting back – to protect your donors’ generosity. But more than that, having policies in place to protect your brand reputation and resources, as personal issues become increasingly political.
In this blog post, we’ll share 5 actionable ways to protect your charity by bridging your finance and fundraising teams:
Ensure your case for support is clear
Review your gift acceptance policy
Be prepared for a financial windfall
Establish a code of conduct for board members
Be wary of bleeding-edge ideas
The winding road to charity accountability
All organizations want to be accountable, but the ways of looking at accountability are different thanks to varying definitions of charitable activity. In Canada, registered charities and non-profit organizations both operate on a non-profit basis; however, they have distinct purposes and are held to different standards.
For example, registered charities–charitable organizations, public foundations, or private foundations that have charitable purposes–can provide official donation receipts. They’re also tax exempt. Non-profits, on the other hand, cannot issue official donation receipts. Nor do they have spending requirements (also called disbursement quotas) for charitable activities.
The situation becomes more complicated when you consider the breadth of grant opportunities and funding programs available. From governments to community foundations, each granting body has its own expectations for how charitable organizations or non-profits should contribute to their causes and communities.
Crowdfunding platforms like GoFundMe take an arms-length approach to accountability. In its Terms and Conditions, GoFundMe makes clear that it is a platform only–not a broker, financial institution, creditor, or charity. As such, it is the donor’s responsibility to understand how their funds will be used. At the same time, it’s the organizer’s duty to ensure donations are used as described in the fundraiser. But the public wants more.
As platforms like GoFundMe take a more active role in charity accountability, ensuring your case for support is clear and putting policies in place to protect your organization is key. Your finance team can help. By working together, fundraising and finance teams can better assess how to plan for–and protect–fundraising priorities; helping to ensure your organization is both financially secure and impactful long into the future.
5 ways finance and fundraising can work together to protect your charity
1. Ensure your case for support is clear
Most grant applications or fundraising proposals require a detailed budget. That is, an explanation of how the funds will be used. It’s how they determine if your proposed project is both actionable and sustainable. As situations like the Freedom Convoy 2022 fundraiser unfold, it’s becoming increasingly clear that having a plan to distribute the funds is a top priority for grant administrators and the public alike.
Whether it’s a requirement of your funder or not, it’s important to have this information on hand for transparency and true accountability. Your donors will want to know how their investment is being managed–and by whom. So, meet with your finance team to build a budget that includes descriptions as well as hard numbers for every line item.
2. Review your gift acceptance policy
A gift acceptance policy describes the type of donations your non-profit or charitable organization will accept. It acts as a guide for your board and staff, and a source of information for potential donors. Furthermore, it serves as a powerful tool to protect your brand reputation and propel your mission forward.
To create an ethical gift acceptance policy, consider all of the groups, organizations, and individuals your cause might attract. You’ll need to decide whether or not to accept their donations. A strong gift acceptance policy should be diverse, equitable, and inclusive, but take a hard stance against those that might negatively affect your reputation or expose your organization to uncertain risk. As experts in policy development, your finance team can ensure your fundraising priorities are supported by policies and procedures that protect your organization.
3. Be prepared for a financial windfall
It’s no secret that people support the causes and communities they care about. Just look at how much the Freedom Convoy 2022 fundraiser was able to raise in just a few, short weeks!
A sudden influx of financial support could significantly impact your organization’s ability to deliver its mission and vision, but how you plan to save the money is just as important as how you plan to spend it. Creating lasting change in the causes and communities you care about requires sustainability; meeting near-term goals and mapping long-term tactics and strategies.
Get clear on the resources you need to tackle the urgent and important work before you, and set yourself up for success later. This is key to winning your supporters’ trust. If you’re not sure, your finance team can help you find gaps your good fortune can fill.
4. Establish a code of conduct for board members
Some charitable organizations have been surprised to find their board members named in the leaked lists of Freedom Convoy supporters. They may have donated their own personal funds, but as Mark Blumberg says, the situation is more complicated than that. Every charity is going to have to think hard about its response.
One solution is to put in place a board code of conduct: a policy that outlines the principles and standards that all directors, including ex-officio directors, must follow. In addition to social media standards, you can include a summary of what’s expected in situations when board members’ personal interests conflict with their duties–and that includes disclosing any donations made to questionable causes. Your finance team can help you find the right way to describe this type of disclosure clause.
5. Be wary of bleeding-edge ideas
After courts froze donations that had been raised through GoFundMe and GiveSendGo, Freedom Convoy organizers turned to cryptocurrency. This new form of gift-giving recently stepped into the spotlight, and some charitable organizations and non-profits have started accepting Bitcoin and other crypto-currencies as donations. But like stocks, bonds, real estate, and other investments, they take time to appreciate.
If your organization is ready to venture into the digital currency realm, make sure you have the financial systems necessary to create safe and regulatory-compliant crypto-giving platforms. This is where your finance team comes in. In some cases, it might make more sense to bring in outside support so you can focus on core fundraising activities and furthering your mission. A great third-party processor is Canada Helps.
Bridge your teams and drive better results
In this blog post, we’ve shared 5 ways to protect your charity by bridging your finance and fundraising teams. As a leading non-profit consulting firm, we’ve seen first-hand how working together can help charitable organizations and non-profits build capacity and maximize their impact.
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