Before being accepted into the Evangelical Council for Financial Accountability, potential members must show that they meet the following criteria:
1. Truthfulness in communication: All representations of fact, description of financial condition of the organization, or narrative about events must be current, complete and accurate. References to past activities or events must be appropriately dated. There must be no material omissions or exaggerations of fact or use of misleading photographs or any other communication which would tend to create a false impression or misunderstanding.
2. Communication and donor expectations: Fund-raising appeals must not create unrealistic donor expectations of what a donor’s gift will actually accomplish within the limits of the organization’s ministry.
3. Communication and donor intent: All statements made by the organization in its fund-raising appeals about the use of the gift must be honored by the organization. The donor’s intent is related to both what was communicated in the appeal and to any donor instructions accompanying the gift. The organization should be aware that communications made in fund-raising appeals may indeed create a legally binding restriction.
4. Projects unrelated to a ministry’s primary purpose: An organization raising or receiving funds for programs that are not part of its present or prospective ministry, but are proper in accordance with its exempt purpose, must either treat them as restricted funds and channel them through an organization that can carry out the donor’s intent, or return the funds to the donor.
5. Incentives and premiums: Fund-raising appeals which, in exchange for a contribution, offer premiums or incentives (the value of which is not insubstantial, but which is significant in relation to the amount of the donation) must advise the donor, both in the solicitation and in the receipt, of the fair market value of the premium or incentive and that the value is not deductible for tax purposes.
6. Reporting: An organization must provide, on request, a report, including financial information, on the project for which it is soliciting gifts.
7. Percentage compensation for fund raisers: Compensation of outside fund-raising consultants based directly or indirectly on a percentage of what is raised, or on any other contingency agreement, may create potential conflicts and opportunities for abuse. Full disclosure of such arrangements is required, at least annually, in the organization’s audited financial statements, in which the disclosure must match income and related expenses. Compensation to the organization’s own employees on a percentage basis or contingency basis is not allowed.
8. Tax-deductible gifts for a named recipient’s personal benefit: Tax-deductible gifts may not be used to pass money or benefits to any named individual for personal use.
9. Conflict of interest on royalties: An officer, director, or other principal of the organization must not receive royalties for any product that is used for fund raising or promotional purposes by his/her own organization.
10. Acknowledgement of gifts in kind: Property or gifts in kind received by an organization, should be acknowledged describing the property or gift accurately without a statement of the gift’s market value. It is the responsibility of the donor to determine the fair market value of the property for tax purposes. But the organization should inform the donor of IRS reporting requirements for all gifts in excess of $5,000.
11. Acting in the interest of the donor: An organization must make every effort to avoid accepting a gift from or entering into a contract with a prospective donor which would knowingly place a hardship on the donor, or place the donor’s future well-being in jeopardy.
12. Financial advice: The representative of the organization, when dealing with persons regarding commitments on major estate assets, must seek to guide and advise donors so they have adequately considered the broad interests of the family and the various ministries they are currently supporting before they make a final decision. Donors should be encouraged to use the services of their attorneys, accountants, or other professional advisers.
