This policy statement reflects an old policy that was modified in October 2010 to accommodate a revised business model. Click here to see a description of the changes.

Calvin Edwards & Company (CEC) is committed to retaining its independence in serving the needs of donors. Thus, not anyone or any entity may be a client.

Typically our independence is assured by being engaged directly by donors, not charitable organizations. The need for independence is particularly obvious in the area of evaluation and due diligence, be it organizational, programmatic, or grant evaluation.

The need is less clear when the donor’s focus is on advice, counsel, and consulting to a nonprofit. One may ask, “Why could such services not be offered directly to a nonprofit? Is it necessary for such counsel to be independent?”

CEC Values: Serving Donor Needs
Two values guide us—and always have—in determining acceptable engagements.

• We serve the needs of donors
  
• We retain our independence and objectivity, and avoid conflicts of interest

These values are implied in the slogan we have used since our inception, “Maximizing the good of giving.” Giving is done by donors; maximization of good depends on reliable, independent advice.

We believe that there is value in consistency, in maintaining a steady policy of serving the needs of donors. Also serving the needs of nonprofits may create a conflict of interest. While direct service to nonprofits in the area of management consulting (not evaluation) does not necessarily create an inherent conflict, it can do so. Were we to evaluate for a donor an organization that was concurrently a nonprofit consulting client, we would be in a clear and obvious conflicted situation. It is not hard to imagine that in our consulting work for a nonprofit we would learn information that we could not (by any ethical standard) report to an outsider, yet at the same time while evaluating that same nonprofit for a donor we must report all pertinent information that we discover.

This is a classic, textbook case of conflict of interest. Conflict of interest policies and ethical guidelines are created to avoid and resolve such situations.

Emerging Complexity
Thus, CEC is committed exclusively to meet the needs of donors. We have traditionally stated this in terms of “the donor is our client.” As the firm has grown and gained experience, and since the philanthropic consulting arena has developed and become more complex, this simple definition has required expansion and clarification. We have frequently been confronted with situations that are not as straightforward or formulaic as our simple definition.

Questions arise about the definition of a “client.” What if a nonprofit wants to be a client but finds a donor to sponsor the work? What if a donor wants to engage us but seeks to have us paid through a donation made to the organization under review? What if a nonprofit and a donor are jointly directing us in a venture philanthropy project? What if a donor makes a grant for the explicit purpose of having a nonprofit engage us and requires reporting of our work done under the grant? There are numerous variations.

Hopefully, our work will typically benefit both the donor and the nonprofit. Historically, we have a strong record of achieving this. When we serve donors, the organizations that donors have us work with receive substantial value. Thus, the issue is not who benefits from our work, not for whose benefit we are engaged. Arguably we are engaged for the benefit of the donor, the nonprofit’s board and management, and other potential donors. Meeting a donor’s needs will very likely also meet a nonprofit’s needs. Thus, this alone does not adequately define our engagements.

Rather, our engagements are characterized by who authorizes and initiates them. Who is the originator of the work? At whose direction do we enter into the engagement? The issue is whether a donor directed the engagement. We retain our independence when we accept engagements that meet a donor’s needs and respond to the donor’s direction.

Acceptable Engagements
Two cases constitute an appropriate engagement where we are able to serve the needs of donors and retain our independence in serving them:

• A donor directly engages us
• A donor advises or instructs a nonprofit to engage us for a project that the donor has funded, and the following apply:

•		CEC is free to report independently to the donor (the nonprofit forgoes its right to consultant-client confidentiality)
•		The donor approves the design and parameters of the project
•		The donor can control the project (a donor may or may not exercise this right in a given case)
•		The donor authorizes CEC to provide the services
•		CEC is paid with funds designated by the donor for the provision of our services, and in an amount that the donor has approved
•		The donor signs a Memorandum of Understanding indicating these terms and conditions

In the first case, CEC executes a Letter of Engagement with the donor; in the second, we execute a Memorandum of Understanding with the donor and an Agreement to Perform Services with the nonprofit.

Serving the needs of the giving community faithfully is challenging and complex. We will continue to assess this policy in an attempt to “maximize the good of giving.”