$24 Million Fine … Yawn!
Yesterday Roger did a yeoman job of laying out the sordid story of Quadriga and its fellow travelers.
From a ‘moving forward’ standpoint, perhaps his three key points, aimed directly at Agitator readers, were these:
“…fundraising companies, consultants and their copywriters — this means everyone involved in this sector, no weaseling — has the duty to determine whether their clients’ claims and stories are true.
“Fundraising companies and their suppliers have the duty to disclose all payments made to themselves and other fundraising agencies, consultants, and suppliers or anyone else in the food chain.
“The obligation of transparency and financial disclosure could be, by far, the most important outcome of this case. And the fact that we as a sector have failed at self-policing is our own fault.”
In other words, each and every one of us in the sector bears the responsibility for protecting the integrity of fundraising practices.
I must say I am bothered that Roger’s post — or actually, the situation it reported on — drew a massive two comments (as I write).
Could that reflect that 99% of us operate with absolute integrity and simply take Roger’s admonitions for granted? In which case we should be proudly affirming that to our clients, our agencies/consultants, the media, and to the donors whose money we steward. So there’s no confusion about our individual ethical standards.
Or, do we greet the Quadriga debacle with a big yawn? Suggesting we’re not at all surprised … it’s business as usual.
Perhaps the only thing unusual in this case being its audacity, as David Krear commented: “In my more than 40 years in working with nonprofit organizations — most of it raising money for them –I have run into several of the bullet points in your posting on DVNF and Quadriga — but not all of them in a single organization.”
As Roger observed:
“This is serious stuff. $24 million worth of seriousness. And heaven only knows what these revelations will do to fundraising at other nonprofits dealing with veteran issues. Or any type of fundraising for that matter.”
I do hope you’re not yawning.
Tom
P.S. David Krear and Heather Eady, thanks for weighing in.
5 responses to “$24 Million Fine … Yawn!”
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There is considerable discussion about this settlement announcement (even if it hasn’t been pasted into the Agitator comment field). Included in that discussion is the despicable job CNN did with the ending to their news story on Monday night by painting all charities and their fundraising partners with the same dirty brush. Talk about a disservice to the giving public — wow. But we are also talking about the business reforms set forth by Quadriga. They’re certainly a silver lining. Last year the DMA Nonprofit Federation published the Principles and Best Practices for Accountability, in large part an outcome of this case, striving to help prevent other DVNF-type situations (Quadriga is a DMA member, DVNF is not). The new Quadriga business requirements can and should become another best practices reference. It is always incumbent upon the nonprofit organization to be responsible for the contracts they sign and the messages they deliver to their donors and the public — but agencies and vendors as the expert partners can take further ownership for setting the bar high.
My only thought yesterday was that maybe the fines weren’t high enough. The thought of so many donors, so badly ripped off just makes steam come out of my ears.
And yes, Shannon, that the entire sector would then be painted with that… so unfair.
People are afraid to comment because they’re worried about having a finger pointed at them — right or wrong, guilty or innocent. They are also afraid because Quadriga is a big organization with very deep pockets and few people want to get on their bad side.
Referencing Tom’s “audacity” comment and David Krear’s observations, I heartily agree. A reporter asked me whether the Quadriga-DVNF business arrangement bore a resemblance to the not-yet-forgotten UCC case. It does – but on steroids.
As to the amount of sanctions, $9.7 million is not chump change. On the other hand, the Quadriga companies took in over $104 million, says the New York AG. Looked at this way, even without consideration of other Quadriga companies’ revenues, 9.7 is not such a big number. While the $13.8 million in debt forgiven also goes on Quadriga’s side of the ledger, it seems to me very unlikely that this is money that Quadriga could ever have collected. And it remains to be seen whether the born-again DVNF can turn any of that forgiveness into public good.
Just sayin’
Your donor relationships are like any other relationships. If you’ve taken the time to make them strong, your donors won’t run at the first sign of trouble.
http://junesfundraisingletter.com/2014/07/03/will-donors-trust-even-scandal-like/