Five questions to ask before hiring an outreach partner

Most states treat a company paid to ask for donations on a charity’s behalf as a professional fundraiser, also called a professional or paid solicitor. The law firm Perlman & Perlman counts 42 states with laws regulating them. Those states generally require the fundraiser to register before any fundraising starts, file its contracts and campaign financial reports, and make certain disclosures to donors.

1. Are you registered in the states where you will ask for donations?

A professional fundraiser generally has to register in every state where it directly solicits contributions. Perlman & Perlman notes that registration comes with a surety bond, meant to guard against misconduct in the solicitation, in face amounts from $10,000 to $25,000 depending on the state. Ask which states the partner is registered in, and ask to see the filings for the states your campaign will cover.

2. What will the contract say?

States that regulate professional fundraisers require the contract to be filed and to include certain terms. Common ones are the charitable purpose of the campaign, its start and end dates, a statement that your organization controls and approves the content, volume and frequency of the solicitation, and an estimate of what your organization expects to receive. California and New York also require cancellation terms that let a charity cancel within 10 to 15 days of signing without penalty.

3. What will your representatives tell donors?

Virtually all of these states require a professional fundraiser to identify itself as one, and many require it to disclose that it is being paid. If a donor asks, the fundraiser must truthfully say how much of the donation will go to the charity. Ask how representatives are trained to answer that question, and ask to hear the answer.

4. How are your representatives paid?

State law generally allows a professional fundraiser to receive percentage-based compensation, according to Perlman & Perlman. The Association of Fundraising Professionals holds its members to a different standard. Its Code of Ethical Standards, last amended in December 2023, allows bonuses or merit pay but says compensation “may never be based on a percentage of funds raised.” Ask which model the partner uses, for the company and for the people on the street.

5. What will you report, and who keeps the donor records?

Nearly all states that regulate professional fundraisers require a campaign report covering the total raised, the fee paid to the fundraiser and certain campaign expenses, typically within ninety days of the campaign’s end. That is the legal minimum. Ask what the partner reports to you on top of it. Our reports cover acquisition, retention and cost per donor.

Then ask who keeps the donor information. The AFP code treats donor and prospect information created on an organization’s behalf as that organization’s confidential property, which may not be taken, shared with, or transferred to other entities. Your contract should say the same.