The economic challenges of the past several 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 casts a shadow over the entire 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. Although donations are increasing, the percentage of donations vis-a-vis disposable income remains at a relatively low level.
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
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 (no, I will not).
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 Foundation Center provides a helpful section on its website for Fundraising Ethics.
“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. See Model Standards of Practice for the code of ethical practice for all professionals working in the planned giving sector.
GuideStar is a favorite resource for information about nonprofit organizations and nonprofit funding organizations like foundations. 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 (board list, budgetary information, tax returns and the like).
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 profiles to the fullest extent and thereby being as transparent to the public as possible.
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)
Below are a few links to additional helpful resources on nonprofit ethics:
- The Bridespan Group, A Board Member’s Code of Ethics
- Niall McCarthy for Forbes, “The Institutions Americans Feel The Most Confident About [Infographic]” (June 16, 2015). Telling!
- It is helpful to see how nonprofit organizations, in this case NPR, view ethics and social media use. Click to read the NPR Ethics Handbook.
This article was written in February, 2013 when I lived in San Antonio, Texas. I have since revised and updated it. If you go to the top of the page and click on the tiny three bars, the drop down will reveal a series of handy links on ethical fundraising practices.
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 operational practices.