Ethics in Nonprofits/Fundraising
“We in the nonprofit sector are held to a higher level of trust than our
colleagues in the for-profit sector”
(Rosso, 2003)
Association of Fundraising Professionals (AFP) challenges its members to (see
AFP Code of Ethics in handout section):
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Accept responsibility for their own behavior
Accept responsibility for the behavior of their institutions
In the areas of stewardship, accountability, confidentiality
A Trust Crisis
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57% trusted private higher education
39% healthcare
31.6% private and community foundations
15.8% Congress (however this increased post 9/11)
“Those who presume to serve the public good must assume the public trust”
(Rosso, 2003)
Ethics in Nonprofits/Fundraising
Factors that Challenge Ethics in Fundraising
1.
Fund raising is not “business as usual”
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2.
The challenge comes from changes in non-profit organizations,
changes in the public’s assumption about nonprofits, and from
technological shifts in how fund raising is done
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3.
Due to the amount of personal attention, engagement and creativity it impossible
to outline every single scenario that can occur can document an ethical response
Increased education and professionalism helps, but still dependent on the
professional
Being responsive to changing circumstances and conditions leads
non-profit leaders and managers to consider moral issues that
pertain to their organizations
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What is fine for one organization, may be a contradiction to the mission of
another organization; no one size fits all approaches (some examples)
Ethics in Nonprofits/Fundraising
Answers to Ethical Dilemmas are not always clear
AFP suggests using the following guidelines:
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If you use this solution, will you be able to look in the mirror and feel
proud?
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Is your solution one for which your organization can stand tall in
front of its donors and clients?
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Given today’s climate, would this solution stand up under the
scrutiny of the press?
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As a Development Officer progresses through their career they achieve
higher levels of professionalism…and an ethical sense (they progress
from technician to professional).
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There is no substitute for experience in this field
Ethics in Nonprofits/Fundraising
Ethics and Professionalism
The text outlines six criteria that are essential to the fund raising profession;
they are:
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Autonomy
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Systematic knowledge
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Self-regulation
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Commitment and identification
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Altruism and dedication to service (fund raisers are more generous with their
resources and time than other citizens)
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Ethics and sanctions (AFP has a process in place to sanction unethical behavior by
members)
“Do we live for philanthropy or do we live off philanthropy”
(Robert Payton, Former Executive Director Center on Philanthropy at Indiana University)
Ethics in Nonprofits/Fundraising
Section 501(c)(3) of the Internal Revenue Code
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Professional Fundraisers must always be cognizant of the nondistribution clause
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“…no part of the net earnings of which inures to the benefit of any private shareholder
or individual,…”
Commits nonprofits and those associated to the public good
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Establishment of trust between donors and organizations
Professional Fundraisers must be the protectors; ensure that we, and all others, do
not benefit personally from the funds being donated to an organization
This do NOT mean that fundraisers should not be paid fairly and equitably; it does
mean:
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Fundraisers do not accept personal gifts from donors
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Salaries must be commensurate with public expectation
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Board members should not have competitive advantage in bidding for business
with the organization
Ethics in Nonprofits/Fundraising
Issues of Professionalism (Rosso, 2004)
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What is the role of trust in our development as fund raising professionals?
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What are the burdens placed on us as fund raising practitioners by the “nondistribution clause” in Section 501(c)(3) of the code?
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As fund raising practitioners, who is our client: the donor or the
organization?
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In every transaction, what are the intents of the donor and what are the
intents of the organization?
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How can we, as fund raising professionals, protect and maintain our integrity
as “boundary spanners” between donors and organizations?
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How do we manage the tensions that arise as fund raisers working for
organizations assist donors expand their philanthropy?
Ethics in Nonprofits/Fundraising
The Josephson Institute surveyed more than 10,000 to define the values that
are important to an ethical or virtuous person.
Josephson’s 10 ethical values that form the basis for ethical
decision making:
1.
2.
3.
4.
5.
Honesty
Integrity
Promise-keeping
Loyalty (fidelity)
Fairness
6.
7.
8.
9.
10.
Concern for others
Respect for others
Law-abidingness and civic duty
Pursuit of excellence
Personal Accountability
Source: Achieving Excellence in Fund Raising, Rosso, 2003
Ethics in Nonprofits/Fundraising
Ethical Dilemmas (example in text:)
What does the professional fund raiser do (the matter of personal
accountability) when the organization (loyalty-fidelity) decides to use
funds given for one purpose by a donor (promise-keeping, integrity,
honesty) for another purpose?
Three step process:
1.
2.
3.
All decision must take into account and reflect a concern for the interests and
well-being of all shareholders
Ethical values and principles always take precedence over non-ethical ones
It is ethically proper to violate an ethical principle only when it is clearly
necessary to advance another true ethical principle, which according to the
decision maker’s conscience, will produce the greatest balance of good in the
long run
Ethics in Nonprofits/Fundraising
C
I
Payton’s Ethics Cube: Individual (fundraiser)
against the Organization surrounded by Competence,
Language, Relations and Mission
L
M
O
First Ethical Tension – Individual vs. Organization
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Is the fund raising executive acting in the best interest of the organization?
Is the organization treating the professional fairly (compensation, etc.)
Who is the client?
Competence
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Competent in ethical and technical standard of the fund raising profession
Law abiding
Pursuit of excellence
Personal accountability
R
Ethics in Nonprofits/Fundraising
Payton’s Ethics Cube (continued):
Language
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The way we talk about our profession
The way we discus the process of fund raising
E.g. don’t refer to donors as “targets”; or “hit people us”
Integrity, honesty, commitment to openness
Relationships
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Who owns the relationship?
Promise keeping, loyalty and
fidelity, fairness, concern for others
Mission
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Fund raising begins with Mission
The Donor Bill of Rights
Philanthropy is based on voluntary action for
the common good. It is a tradition of giving
and sharing that is primary to the quality of
life. To ensure that philanthropy merits the
respect and trust of the general public, and
that donors and prospective donors can have
full confidence in the nonprofit organizations
and causes they are asked to support, we
declare that all donors have these rights: (see
next slide)
Ethics in Nonprofits/Fundraising
Ethical Dilemmas - Some Cases
 Physicians participating in philanthropy (recruiting gifts from
current/former patients)
 Soliciting philanthropy support from contracted vendors
 Board Members as vendors
 Foursome to Augusta National Golf Club
 Butler Hospital Golf Tournament at Foxwoods Resort
Casino