Canada: Ethical, Legal And Equitable Duties In Fundraising

Last Updated: August 17 2017
Article by Lisa Goodfellow

There are a number of ethical, legal, and equitable rules that directors, officers, and employees of charities and not-for-profit organizations must follow. This article focuses in particular on persons engaged in fundraising roles and what they need to know to ensure they follow these rules.

Duty of Confidentiality:

One of the most important obligations for an organization to always keep in mind is the duty of confidentiality. This duty is implied in every contract of employment, even if it is not expressly stated, and is also a duty of directors on boards. The duty of confidentiality is the duty to keep confidential any information relating to or belonging to the organization that is not generally available to the public—not to disclose it, and, beyond that, not to use it for any reason other than in the performance of duties for the organization.

This duty lasts not only for the duration of employment or office, but indefinitely beyond that for as long as the information is not generally available to the public.

Confidential information includes things like donor names and contact information, their giving habits and profile or history. It also includes non-public information about the way the organization is run, such as marketing strategies, innovative fundraising ideas, personnel information, and internal processes. When an employee or officer leaves an organization, he or she may not take physical or electronic copies of such things; as for the information that is in his or her head, careful attention is required not to use it or disclose it to others. General know-how, that is not unique in any way, is the employee's to use in his or her next position.

This duty plays a big role in what a person can legally or properly do to try to bring donors over from one organization to another.

Privacy legislation, such as PIPEDA and CASL, also places significant limitations on the collection, use and disclosure of personal information about donors and potential donors.

Duty of Fidelity:

Every employee of an organization also has a duty of fidelity, or loyalty. This means that employees should not do anything which is not in the best interests of the organization, nor anything that would put them in a conflict of interest with the organization. The duty of fidelity ends when the employment relationship ends. This duty subsists when planning to leave, right up until the last day of work, and prohibits employees from doing anything to solicit donors or co-workers away from the organization while still there.

Fiduciary Duty:

In addition to having a duty of fidelity, senior management employees, directors and officers of an organization are fiduciaries of the organization. This is a higher and more onerous duty that covers everything within the duty of fidelity and more, and which, most importantly, also continues for some period of time after they leave an organization. It could last as long as a year or two afterward. Fiduciary duty means putting the interests of the organization ahead of the individual, and allows no room for self-interest whatsoever.

Fiduciary duty includes a duty not to compete unfairly against the organization, even after the senior employee or officer has left. It includes a duty not to solicit the employees or donors, or other relationships formed while with the organization, in an effort to make them end their relationship with the organization and move their allegiance or donations to a new one.

Contractual Duties:

In addition, employees may have contractual non-competition or non-solicitation obligations to their former employer that last for some period of time following the end of the relationship. Non-competition restrictions may be difficult for an employer to enforce, unless they are reasonable in terms of their timeline, geographic scope, and subject matter. By comparison, non-solicitation restrictions are much easier to enforce, and can even prevent employees who were not senior enough to be fiduciaries from soliciting donors and other employees away from the former employer for a reasonable period of time after their employment ends.

One should be mindful of these duties, especially when making a move from one organization to another. Even where there is pressure to deliver new donors to a new employer, one should not breach these duties, which are both legal and ethical duties. Although relationships with donors may feel like personal relationships, which an employee should be free to bring along for the benefit of a new organization, they are not truly personal. They are relationships that the employee forged on behalf of the former employer, while being paid by that former employer, and they are not the employee's to take with him or her.

The fact that a donor might follow if asked does not give the employee licence to ask.

So do be careful. Do consider the obligations that employees might have, whether contractual or equitable, before doing anything that may be in breach of these duties. If the employee is a manager, he or she should ensure that employees for whom he or she is responsible understand their duties as well, so that management can enforce those duties and protect the organization.

On the difficult matter of what to do when another employee, or manager, is breaching their duties to the organization, remember this: the duty of loyalty is owed to the organization, not to any one individual in the organization. So even if an employee is a manager or a higher level executive in the organization, he or she should not stand by and watch. The senior employee must make the breach known to the organization so that the breach can be dealt with appropriately.

The duties owed to the organization require employees, directors, and officers to come forward to disclose any witnessed impropriety. Whether it be financial impropriety, or breach of other laws such as human rights or health and safety laws, it is the responsibility of the individual employee to come forward. If it feels too unsafe to do so, consider whether an anonymous complaint is possible.

Many organizations do have whistle-blower policies that encourage employees to report such matters while ensuring that their anonymity is protected. Also, most legislation has anti-reprisal protections built into it, which make it illegal to take any sort of action against a person who makes a good faith complaint or report of a breach of the legislation. For example, the Ontario Human Rights Code, the Occupational Health and Safety Act, and the Employment Standards Act, 2000 all have anti-reprisal sections.

Whenever possible, these reports should be made within the organization to enable it to investigate and address them first internally, with maximum confidentiality, and a minimum of bad press or the potential for reputational damage to the organization. Where the CEO or Executive Director of the organization is the subject of the complaint, then it should be made to the Board of Directors, to whom that person is accountable.

If that is not effective, then, as an alternative or a last resort, the complaint could be made to an external agency, such as the Canada Revenue Agency, the Ministry of Labour, or whatever body is appropriate to the nature of the concern. By first attempting to deal with the issue internally, the employee permits the organization to address the issue before it becomes public, thereby protecting the reputation of the organization from damage. After all, protecting the organization is the reason individuals make these complaints in the first place.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Lisa Goodfellow
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions