Why is it essential for organizations not to make claims that cannot be upheld or that are misleading? To develop a robust donor base, an organization must represent its activities truthfully. Making claims that cannot be upheld or that are misleading is unethical and can damage an organization’s reputation, making it extremely difficult to attract the resources it needs to make an impact in its community. Donors who find that organizations they have contributed to were unable to follow through on their promises are unlikely to support the organization in the future.
Making misleading claims can also incur consequences from CRA if the organization is found to be acting contrary to public policy or to be violating provincial consumer protection legislation or the federal Competition Act.1 CRA could also see misleading claims as evidence of “deceptive fundraising,” which can result in legal sanctions including the revocation of charitable status.1 To avoid misleading potential donors, The Association of Fundraising Professionals requires its members to accurately disclose the organization’s mission and the use of solicited funds on all fundraising materials.2
Examples of misleading claims:
a. It would be misleading for an organization working to cure cancer to suggest that by reaching their fundraising goal, they will be able to cure the disease. The organization cannot guarantee this kind of outcome. When discussing the impact of donations, organizations must not guarantee outcomes that are beyond the organization’s control.
b. It would be misleading to state that all donors who contribute over $200 will be invited to a special reception to thank them for their donation and then neglect to host such a reception.
c. An organization that already has significant reserve funds but launches a new fundraising campaign that gives the impression that the organization is in desperate need of funds is misrepresenting the financial status of the organization. CRA could consider this to be an example of “deceptive” fundraising.1
From "Accreditation Preparation Workbook Section C: Fundraising," Katharine Zywert, Social Prosperity Wood Buffalo at the University of Waterloo, 2013.
- “Fundraising by Registered Charities: Guidance,” Canada Revenue Agency, April 20th 2012.
- “Association of Fundraising Professionals Code of Ethical Principles and Standards,” Association of Fundraising Professionals, 2004.
Standards Reference Guide