Professional Fundraising Agreement

A professional fundraising agreement (PFA) is a contract between a nonprofit organization and a professional fundraising firm. The agreement outlines the terms and conditions of the partnership and is designed to protect the interests of both parties. In this article, we will discuss the key elements of a professional fundraising agreement and why having one is essential for nonprofit organizations.

Purpose of a Professional Fundraising Agreement

A Professional Fundraising Agreement serves several purposes, including:

1. Clarifying the roles and responsibilities of both parties: The agreement outlines the specific duties and responsibilities of the nonprofit organization and the fundraising firm. It helps to avoid misunderstandings and ensures that everyone knows what is expected of them.

2. Ensuring compliance with state regulations: Many states require that professional fundraisers register and comply with regulations before soliciting charitable donations. The PFA can help ensure that the fundraising firm complies with all applicable regulations.

3. Protecting the interests of the nonprofit organization: The agreement provides protection to the nonprofit by outlining the fundraising activities that the firm will undertake and the fees and expenses that will be incurred.

Key Elements of a Professional Fundraising Agreement

1. Scope of services: The agreement should clearly state what services the fundraising firm will provide to the nonprofit organization. This may include soliciting donations, event planning, or other services. It is important for the agreement to spell out what services will be provided and the time frame for completing them.

2. Compensation: The agreement should specify the fees and expenses that will be incurred by the nonprofit organization. Typically, fundraising firms charge a percentage of the funds raised. The agreement should spell out how this percentage will be calculated and when payments will be made.

3. Duration of the agreement: The agreement should specify the length of the partnership between the nonprofit organization and the fundraising firm. This may be a fixed term or an open-ended agreement that can be terminated by either party.

4. Termination: The agreement should also specify the circumstances under which the agreement can be terminated by either party. This may include breaches of the agreement, failure to meet deadlines, or other reasons.

5. Non-disclosure and confidentiality: The agreement should include provisions to protect the confidential information of both parties. This may include donor lists, financial information, or other sensitive data.

Conclusion

A professional fundraising agreement is an essential tool for nonprofit organizations that are working with fundraising firms. The agreement helps to clarify the roles and responsibilities of both parties, ensures compliance with state regulations, and protects the interests of the nonprofit organization. Nonprofit organizations should carefully review and negotiate the terms of any fundraising agreement before signing it to ensure that it meets their needs and protects their interests.