Nonprofits should spend the majority of their annual revenue on programs, the Direct Marketing Association Nonprofit Federation's newly released guidelines say.
“Donors expect nonprofits to be accountable and transparent. The new principles serve as key reminders to organizations that they hold a public trust,” Senny Boone, DMANF general counsel, said in a news release. “Legitimate organizations already hold themselves and others accountable when fundraising; they explain their fundraising process to their donors; and they use donated funds wisely.”
DMA describes itself as the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing, and the Nonprofit Federation is one of its biggest groups.
The guidelines also say analysis should be conducted over a financial reporting period or longer. It suggests metrics including the cost to raise a dollar, cost to acquire a donor, long-term donor value, and net revenue available for the organization to spend on mission delivery.
Other parts of the guidelines include accurate and transparent messaging to donors and clear written contracts with external agencies, consultants and suppliers.
DMANF said it will host ethics compliance webinars and training for members to ensure compliance, and members will be asked to adhere to these standards in addition to DMA’s current ethical guidelines.