Ethical Fundraising: Balancing Integrity, Transparency & Impact
- Third Sector Experts International
- 4 days ago
- 5 min read
Fundraising is the lifeblood of every charity and CIC, but it’s also one of the greatest tests of integrity. How you raise money is as important as how you spend it. In a world where public trust in institutions is fragile and scrutiny is instant, ethical fundraising isn’t just good practice, it’s an organisational necessity.
At Third Sector Experts International, we help charities and CICs build fundraising strategies rooted in transparency, values, and accountability. Because ethical fundraising doesn’t limit growth, it sustains it.
Here’s how your organisation can balance financial ambition with moral responsibility.
What Is Ethical Fundraising?
Ethical fundraising means raising money in ways that align with your mission, values, and legal responsibilities.
It’s about asking the right people, in the right way, for the right reasons — and being open about how that money is used.
In practice, it requires three things:
· Integrity – ensuring fundraising methods are honest and mission-led.
· Transparency – communicating clearly about costs, outcomes, and impact.
· Accountability – ensuring governance structures oversee all fundraising activity.
Ethical fundraising isn’t just about compliance; it’s about trust. And trust is what drives long-term donor relationships and reputation.
Why It Matters More Than Ever
In 2025, donors, funders, and the public expect higher standards than ever before.
Public trust drives sustainability
According to the Charity Commission’s latest research, public trust remains the single biggest factor influencing whether people give.
A single misstep, misleading appeals, opaque spending, or insensitive messaging can have long-term reputational consequences.
Funders are demanding transparency
Grant-making bodies and corporate partners increasingly assess ethical alignment when choosing who to fund.
Charities that can demonstrate robust ethical fundraising frameworks are seen as lower-risk and higher-integrity partners.
Internal culture depends on it
When fundraising aligns with values, staff and volunteers are more motivated and confident in the organisation’s mission.
Ethical fundraising creates coherence between what a charity says, what it does, and how it earns the right to do it.
The Principles of Ethical Fundraising
At Third Sector Experts International, we use six key principles to guide clients in building ethical fundraising strategies:
1. Respect for Donors
Treat every supporter with dignity and respect. Never pressure, guilt, or manipulate people into giving. Donors must feel valued, not used.
2. Honesty and Accuracy
All appeals must be factually accurate and reflect genuine need. Avoid emotional exaggeration or misleading statistics.
3. Transparency
Be open about how funds are spent, including administration and fundraising costs. Publish annual impact reports and make financial statements accessible.
4. Accountability
The board of trustees holds ultimate responsibility for fundraising ethics. They must review fundraising policies, monitor risk, and approve partnerships.
5. Privacy and Data Protection
Protect supporter information under UK GDPR. Never share or sell donor data without explicit consent.
6. Dignity for Beneficiaries
Avoid exploitative or distressing imagery. Beneficiaries’ stories should be told with consent, dignity, and empowerment.
Ethical fundraising is a daily practice, not a statement on a website.
Building an Ethical Fundraising Framework
An ethical approach requires structure. Here’s what your framework should include:
A. Fundraising Policy
Your starting point. This outlines principles, approval processes, and unacceptable practices (e.g., partnerships conflicting with your mission).
B. Code of Conduct for Fundraisers
A clear guide for staff, volunteers, and third parties covering tone, behaviour, and standards.
C. Partnership & Donation Acceptance Policy
Define which donations you will and will not accept. This avoids reactive decisions later, for example, declining funding from companies involved in gambling, arms, or unethical labour.
D. Complaints and Whistleblowing Procedure
Enable donors, staff, and beneficiaries to raise concerns safely and confidentially.
E. Oversight & Reporting
Trustees should review fundraising activities at every board meeting, not just during audits or crises.
Fundraising Channels and Ethical Risks
Each fundraising method carries its own ethical considerations:
Corporate Partnerships
Corporate giving can be powerful but ensure alignment between your values and your partner’s activities. Ask: “Does this partnership enhance or compromise our mission?”
Digital Fundraising
Transparency online is critical. Always make donation pages clear about recurring payments, fees, and data usage.
Public Collections and Events
Volunteers representing your organisation must be trained and identifiable. The public’s trust rests on professionalism and honesty.
Grant Applications
Accuracy is key. Never overstate capacity, outcomes, or reach in bids. Funders appreciate realism over exaggeration.
Major Donors
Establish due diligence for all large gifts. Trustees should approve significant or politically sensitive donations.
International Fundraising
Be cautious about transferring or receiving funds internationally. Comply with anti-money laundering, counter-terrorism, and sanctions laws.
Third Sector Experts International often helps clients implement Gift Acceptance and Due Diligence Policies to ensure all income sources align with their charitable purpose.
The Role of Trustees in Ethical Fundraising
Trustees are legally responsible for ensuring that fundraising is carried out in compliance with the Charities Act 2011, Fundraising Regulator’s Code of Practice, and Charity Commission guidance (CC20).
Trustee responsibilities include:
Approving fundraising policies and budgets.
Monitoring compliance and reputational risks.
Reviewing donor complaints and partnership decisions.
Ensuring transparent reporting in annual accounts and impact reports.
Trustees don’t need to be fundraising experts but they must ask the right questions.
Communicating Transparency to Donors
Transparency isn’t just about publishing numbers, it’s about storytelling with honesty.
Ways to increase donor confidence:
Share clear impact reports with real outcomes, not just outputs.
Be open about costs, explain why admin and salaries are part of delivering impact.
Update donors when challenges arise; honesty strengthens trust.
Provide feedback loops so donors see results from their support.
The more transparent you are, the stronger the relationship becomes.
Measuring Ethical Impact
To embed ethics into fundraising, measure it like any other performance area.
Suggested ethical KPIs:
Percentage of donors retained year-on-year.
Number of complaints received and resolved.
Level of donor satisfaction or trust (surveyed annually).
Adherence to internal fundraising policy.
Alignment of funding sources with organisational values.
Ethical success is measured not just in pounds raised but in the quality and sustainability of your relationships.
When Things Go Wrong
Even the best organisations can face ethical dilemmas, such as donations from controversial sources or miscommunication in appeals.
The key is how you respond.
Best practice:
· Act quickly, transparently, and with accountability.
· Consult trustees before making public statements or returning donations.
· Review what went wrong and update policies accordingly.
· Communicate lessons learned internally and externally.
Mistakes handled ethically often strengthen, not damage, long-term trust.
Case Example: Ethical Review in Practice
A UK-registered environmental charity approached Third Sector Experts International after being offered a £250,000 corporate donation from a company involved in plastics manufacturing.
Though the funds could have transformed their operations, trustees were divided on ethical grounds.
We facilitated a structured Ethical Partnership Assessment, reviewing:
The company’s sustainability record.
Potential reputational risks.
Donor motivations and media exposure.
Long-term mission alignment.
The board decided to decline the donation, issuing a transparent public statement.
Within three months, the charity received new offers from partners more aligned with its values and gained increased donor confidence.
Integrity became its strongest asset.
How Third Sector Experts International Can Help
We help charities and CICs build ethical, transparent, and compliant fundraising systems through:
· Fundraising Policy & Framework Development
· Trustee Training on Ethical Fundraising and Oversight
· Donor Due Diligence & Partnership Assessments
· Transparency and Impact Reporting Frameworks
· Crisis Communication & Reputational Management
Our approach helps you raise funds confidently, knowing every pound aligns with your purpose.
Final Thoughts
Ethical fundraising is not a barrier to growth; it’s the foundation of sustainable success.
The public doesn’t just fund your work; they fund your values. When you demonstrate integrity in every request, you build something far more valuable than donations - you build trust.
As we tell our clients at Third Sector Experts International:
“The most successful charities don’t chase funding; they attract it through credibility.”
In a world where reputation is currency, ethical fundraising isn’t just good practice; it’s good governance.
Download our Ethical Fundraising Policy Template
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