By Linda Fisher Thornton
It doesn't work to wait for ethical problems to develop, since the fallout of an ethics scandal can hurt an association or nonprofit organization for many years. It is important to build an ethical culture before difficult ethical situations arise. There are specific steps that leaders can take to proactively manage the organization's ethics so that they are not caught off guard by ethical challenges.
Ethical Challenges Non-Profits and Associations Face
Non-profit and association leaders have to deal with a wide variety of ethical challenges that include:
- Building and maintaining a strong ethical culture while working with a wide variety of staff, volunteers, and community partners;
- Making sure that individuals involved in doing the work of the organization are honest and do not personally profit from the organization;
- Ensuring truthful communication with all constituents;
- Ensuring that all parties involved in the work of the organization are treated with respect and care;
- Carefully ensuring the privacy and confidentiality of personal information;
- Managing fundraising ethically, ensuring that funds are used as promised during fundraising;
- Managing their preferred tax status and the deductibility of charitable contributions with the highest ethics;
- Deciding how to handle donations that appear to come with strings attached—expectations for favorable treatment that may jeopardize objectivity or current services or may move the organization away from its mission;
- Recognizing and managing potential conflicts of interest due to members and leaders being part of multiple community organizations;
- Ensuring that the organization's intended outcomes are accomplished, providing the public benefit that drives its mission.
Here are some of the crucial actions recommended for leaders for proactively managing ethical challenges:
- Face the complexity involved in making ethical choices. Don't oversimplify decisions. Openly discuss the ethical grey areas and acknowledge the complexity of work life. Be a leader who talks about the difficult ethical choices, and help others learn to take responsibility for making ethical decisions carefully. Bring ethics to life by talking about the kinds of ethical challenges that people face in their work and how they should be handled. Let these conversations be a learning forum for discussing your ethical obligations and how to honor them.
- Talk about the right thing to do in the context of your daily challenges. Don't separate ethics from day-to-day business. Make it clear to your people that ethics is the way you operate and not a training program or reference manual. Every activity, whether it is a training program, a meeting, or an important strategy session, should include conversations about ethics. Make it clear that the association's ethics are monitored by everyone, not just top leaders, and let people know what to do if they see a possible ethical problem. Involve people in making ethical decisions and understanding decisions involving ethics.
- Demonstrate respect for everyone all the time. Don't allow negative interpersonal behaviors to erode trust. Create a respectful, high-trust environment. Build the kind of environment where people can speak openly, where they share ownership of organizational values, and where all people are treated with respect, regardless of their role in the organization. Build trust, foster open communication, and share the ownership of organizational values. Cultivate a respectful environment where people can speak up about ethics and share the responsibility for living it.
- Take responsibility broadly, and reach for the highest level of ethical leadership. Don't think about ethics as just following laws and regulations. Make ethics a visible priority. Post the association's professional or industry ethics codes that you are bound by in your work. Talk about them often, and discuss how to act on them in your day-to-day work. Demonstrate your commitment to go beyond mere compliance with laws and regulations. Prove that you are committed to ethical issues, including human rights, social justice, and sustainability.
- Hold everyone accountable, and expect leaders to model the standards. Don't exempt anyone from meeting ethical expectations. Make sure that ethics is treated as a must-do in the association, and quickly deal with any ethical problems. When resolving problems, use them as teachable moments to help everyone uphold the association's ethics. Make sure that no one is exempted from meeting the ethical standards you adopt. Set the tone for the organization by modeling the highest ethics and demonstrating the kinds of ethical decisions and actions that you expect from others. When you model the highest ethics, people are more likely to follow your lead. Expect all leaders to do the same. No exceptions!
- When you talk about ethics, don't just talk about the negative. Celebrate positive ethical moments. Instead of focusing on the punishments and penalties that can result from ethical problems, talk about the positive benefits of being an ethical organization. Make sure people understand that an ethical organization more easily gets results, more easily recruits volunteers and sponsors, and makes a powerful positive difference in your profession, industry, or community. Talk about what positive ethics looks like in practice as often as you talk about what to avoid. Take time to celebrate positive ethical choices.
- Don't ever stop. Talk about ethics as an ongoing learning journey, not a once-a-year training program. Integrate ethics into every action of your organization—everything people do, touch, or influence. Talk about ethics as a learning journey, not something you have or don't have. Recognize that the world changes constantly, and that ethical conduct requires that everyone remain vigilant. Ethics has an important and permanent role in our work lives for as long as we live.
There will always be ethical challenges, and we need a strong ethical infrastructure to ensure that our associations will respond ethically to those challenges. These seven action steps help association and nonprofit leaders create cultures where ethical choices are expected, are a priority, and are monitored on an ongoing basis.
To better understand how to apply these action steps, let's explore the situation of a donation to a nonprofit organization that comes with conditions attached.
Should We Take the Donation With Strings Attached?
A non-profit receives an offer of a $50,000 donation that will only be donated if the organization does three things:
- Prominently advertises the donating company and its product on the organization's website, with active links;
- Reserves a table at an upcoming function for the donating company's executives and guests;
- Uses the donating company as a main supplier of materials in place of a supplier currently in use.
While there could be situations in which these conditions attached to the donation could pass the ethical test, there are also situations in which they would not and should be avoided. For example, let's imagine that the donating organization has a reputation for being unethical, and is hoping to use its connection with your association to improve its reputation. How could having its logo on your website negatively impact your organization's reputation? How will using the donating company as a main supplier impact you? What if the organization's product has been deemed unsafe by a consumer agency? In order for you to accept the donation you would have to prominently display it on your website and add it to your supply inventory.
Here are some key issues to consider and possible actions to take in this situation, based on the seven action steps above.
Should We Take the Donation With Strings Attached?
Face the complexity involved in making ethical choices. Don't oversimplify decisions.
We should not just take the donation without thinking through the consequences.
Talk about the right thing to do in the context of your daily challenges. Don't separate ethics from day-to-day business.
We need to talk this over carefully and consider how it would affect our organization.
Demonstrate respect for everyone all the time. Don't allow negative interpersonal behaviors to erode trust.
We need to thank the potential donor and let them know that we are considering their offer. We need to keep the conversation respectful if we disagree internally about what to do. I suspect that some in the group will want to just take the money. Others will want to stick to higher principles and graciously decline or suggest alternate terms that the sponsor might accept.
Take responsibility broadly, and reach for the highest level of ethical leadership. Don't think about ethics as just following laws and regulations.
It would be perfectly legal to take this donation with the strings attached. But does it violate our mission? Our principles? Our integrity?
Hold everyone accountable, and expect leaders to model the standards. Don't exempt anyone from meeting ethical expectations.
We need to hold ourselves accountable for making an ethical choice. We should think about both scenarios—what could happen if we did and didn't accept this offer, and then see if we can come up with a better way to work with the donor that fits our ethics.
When you talk about ethics, don't just talk about the negative. Celebrate positive ethical moments.
We need to focus on the positive impact of making the ethical choice here. It could be a mutual win with different terms or it could be an organizational victory to stick to our principles and politely turn down the offer.
Don't ever stop. Talk about ethics as an ongoing learning journey, not a once-a-year training program.
I'm glad we've been talking about our organizational values and how to handle ethical issues. We'll be ready to talk about this openly and make a good decision.
Sticking to Our Principles
Leaders will always face difficult ethical dilemmas. Proactively having ethics conversations and talking about the association's or nonprofit's values will keep us and our teams grounded in what matters to the organization. While sponsorships and donations are the lifeblood of many organizations, we can be careful not to sell our ethics to the highest bidder by taking donations that violate our principles.
Linda Fisher Thornton is CEO of Leading in Context LLC, an Adjunct Assistant Professor of Leadership for the University of Richmond School of Professional and Continuing Studies, and author of 7 Lenses: Learning the Principles and Practices of Ethical Leadership (©2013). She can be reached at Linda@LeadinginContext.com, @leadingincontxt.