Ethics and Philanthropy

Partnership for Philanthropic Planning San Antonio presentation on ethics in early 2013, which inspired me to write "Ethics and Philanthropy."

A Partnership for Philanthropic Planning San Antonio presentation on ethics in early 2013 inspired me to write, “Ethics and Philanthropy.”

The economic challenges of the past few years and increased scrutiny of nonprofit organizations has required the nonprofit sector to demonstrate more fully the merits of its financial accounting and the ethical management of charitable donations.

The media’s coverage of a few nonprofits that have abused donations has cast a shadow over the entire nonprofit sector. Certainly, the media should warn the public of dangerous organizations. But I keep hoping they will balance their coverage with reports about those nonprofits that do an excellent job and maintain the highest standards of behavior in their service to the public.

The subject of ethical behavior and philanthropy requires constant diligence by the nonprofit sector. Although donations have begun to increase as the economy heals, the actual percentage of donations vis-a-vis disposable income remains at a relatively low level.

The percentage Americans donated remained at 2% of disposable income in 2013 and 2014 (Giving USA).

The percentage Americans donated remained at 2% of disposable income in 2013 and 2014 (Giving USA).

The National Council of Nonprofits provides a concise statement about the situation we face today.

“The greatest threat to the not-for-profit sector is the betrayal of public trust, the disappointment of public confidence. Virtually all knowledgeable observers of the not-for-profit scene believe that an overwhelming proportion of not-for-profits are honorably run … that admirable context, however, does not provide much protection to the sector when a sequence of highly publicized disgraceful not-for-profit misdeeds occurs.”

~ Joel Fleishman, Scholar, Author, Professor of Law and Public Policy, and Director of the Heyman Center on Ethics, Public Policy and the Professions, Duke University

When one joins the Association of Fundraising Professionals (AFP), it requires each member to agree to and sign a statement of ethical behavior. Being able to say you have signed this statement is considered one of the organization’s most valuable membership benefits.

Those outside the profession are often ignorant of ethical standards. For instance, I am asked surprisingly often if I will tackle a nonprofit fundraising project and be paid a percentage of the total funds raised. This might inspire fundraisers to focus on personal gain rather than on the good of the nonprofit’s mission and funding needs. It also puts the burden of success or failure on the fundraiser or fundraising team, rather than on the nonprofit asking for donations (this should be a joint responsibility).

The Canadian Coalition for Global Health Research has posted, “Social Media Best Practices for Nonprofit Organizations.”

AFP has also posted Guidelines, Codes, Standards that you might find helpful.

The Foundation Center provides a helpful section on its website for Fundraising Ethics: A Selected Resource List.

“In recent years, controversies at major nonprofit organizations have created new public concern about, and focused media attention on, the ethics of fundraising. National trade and professional groups have responded with the establishment or revision of codes of ethics for their members.”

The Partnership for Philanthropic Planning shares several resources on this subject as well. Ethics Resources provides links to associations, institutes, and centers that study and promote ethical behavior.

For planned giving professionals specifically, the Model Standards of Practice for the Charitable Gift Planner is quite comprehensive. It includes not only nonprofit staff, but other professionals involved in estate planning.

“The purpose of this statement is to encourage responsible gift planning by urging the adoption of the following Standards of Practice by all individuals who work in the charitable gift planning process, gift planning officers, fund raising consultants, attorneys, accountants, financial planners, life insurance agents and other financial services professionals (collectively referred to hereafter as “Gift Planners”), and by the institutions that these persons represent. This statement recognizes that the solicitation, planning and administration of a charitable gift is a complex process involving philanthropic, personal, financial, and tax considerations, and as such often involves professionals from various disciplines whose goals should include working together to structure a gift that achieves a fair and proper balance between the interests of the donor and the purposes of the charitable institution.”

Ethical compensation is an important consideration for planned giving executives. Toward that end, you should read, Competence & Professionalism: Gift Planning Compensation.

GuideStar is one of my favorite resources for information about nonprofit organizations and nonprofit funding organizations. I frequently check to be sure the nonprofits with which I work or volunteer are present on GuideStar, and if they have completed their respective profiles.

Better yet, I urge nonprofits to apply and become part of the GuideStar Exchange – read, GuideStar Exchange Requirements and Benefits. The process involves completing their profile to the fullest extent and thereby being as transparent to the public as possible.

Look below the main body of Carolyn’s Nonprofit Blog to find links to two GuideStar case studies. When you read them, you will see why I am such a fan of GuideStar!

Click on the image to read Stanford Innovation Review’s article, “Ethics and Nonprofits” (2009).

You might also enjoy reading a more informal discussion about ethics, “Cowboy Ethics: Ten Principles to Live By.” This article is one of my most read, since the blog was launched on WordPress in 2011.

In closing …

“If you don’t have integrity, you have nothing. You can’t buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.”

~ Henry Kravis, American businessman (b. 1944)

Here are links to additional helpful resources on nonprofit ethics:

Click to reach my article with two case studies involving GuideStar.

Click to reach my article with two case studies involving GuideStar.

Click on the logo above to reach my article about how I have used GuideStar in my work.

This article was written in February, 2013 when I lived in San Antonio, Texas. I have since revised and updated it.

I would also like to mention that one should not have to pay to prove one adheres to the highest possible ethical standards (i.e., join an organization). The resources I have provided can be quoted on your nonprofit’s website and in collaborative materials to demonstrate your awareness of and adherence to ethical nonprofit fundraising practices.

2 thoughts on “Ethics and Philanthropy

  1. Carolyn, on behalf of GuideStar, thank you for including us in this blog post! We’d love, love, love to feature your use of the GuideStar Exchange in a case study on our website. Would you be interested? We’re happy to put it together and run by you, and then announce it via our social media networks, generating publicity for you. Thoughts? Please feel free to email me at lnichols@guidestar.org any time with questions or concerns. Thank you!
    ~Lindsay J.K. Nichols, GuideStar’s communications director

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