The Quest for Ethical Best
Practice
Chris Einolf, DePaul University School
of Public Service
NCDC Conference, 2014
Overview
I.
II.
III.
IV.
V.
Definition of ethics
Compliance-based and virtue ethics
State of nonprofit ethics
Barriers to ethical behavior
Solutions
I. Define ethics
What are “ethics”?
What are organizational ethics? How do they
differ from individual ethics?
II. Compliance vs. virtue
Compliance: Obey rules in the pursuit of selfinterest or organizational goals.
Common in business, public administration
Virtue: Skills to lead a worthwhile life. What is a
worthwhile life?
Catholic organizations?
Your organization?
Nonprofit ethical codes
Independent Sector: “Principles for Good
Governance and Ethical Practice”
https://www.independentsector.org/principles_
guide_summary
Donor’s Forum: “Illinois Nonprofit Principles and
Best Practices”
https://donorsforum.org/sites/default/files/files
/pages/Purple%20Book%20PDF.PDF
Nonprofit ethics
6 elements:
• written standards (code of conduct)
• training
• helpline
• employee evaluation on ethics
• discipline for violations
• resources to answer ethics questions
Source: Ethics Resource Center. (2008). National Nonprofit Ethics Survey,
2007. www.ethics.org.
Nonprofit ethics programs:
All 6 elements: 44%
Some elements: 52%
No elements: 4%
Those with all 6 elements reported very low
rates of unethical behavior.
Small organizations and ones where the ED (not
the Board) led on ethics had better behavior.
Source: Ethics Resource Center. (2008).
Ethics across the 3 sectors
Nonprofit
For Profit
Government
Strong culture:
Value alignment:
Effective program:
Seen misconduct:
58%
45%
32%
57%
52%
40%
25%
56%
50%
36%
17%
55%
Seen financial
fraud:
Less ethical:
8%
5%
6%
19%
7%
11%
Not in right
direction:
18%
9%
13%
IV. Barriers to ethical behavior
A.
B.
C.
D.
Reason: rationalization
Emotions: Not reliable
Framing
Awareness
Reasoning
A useful skill, but:
- Most decisions are intuitive
- Reasoning acts as a lawyer, not a judge. It
rationalizes after the fact
Emotions
Gut feelings
The “sleep test”
Fundamental attribution error
Self-serving bias
“I am satisfied with my moral character (T/F)”
“I am more ethical than my fellow students (T/F)”
Satisfied: 92%
More ethical than average: 75%
Framing
ABC Drug Company’s most profitable drug, its
internal studies indicate, causes 14-22
“unnecessary” deaths a year. Competitors offer
a safe medication with the same benefits at the
same price. If regulators knew of the internal
study, they would ban sale of the drug.
Power of framing
- Ethical dilemma: 97% say stop making the
drug.
- Business case: Nobody says stop making it;
80% say hire lawyers and lobbyists.
Challenger disaster: “Put on your managers’
hats’
Social norms
Conformity bias: Asch experiments
Advertising
Petrified forest study
Awareness
http://www.youtube.com/watch?v=Ahg6qcgoay
4
How many counted the passes correctly?
How many saw the bear?
Did anyone do both?
What does it have to do with ethics?
Solutions
I. “Want” self vs. “should” self
II. Power of others
“Want” self and “should” self
Changing the “want” self:
Prescripts (heroes study)
Pre-commitment devices (imagine
temptation)
Strengthen the “should” self:
Awareness
Monitoring rationalizations
Power of others
Strong effect of social context
Choose good social contexts
Encourage good moral environment
Religious culture
Positive: Virtue ethics, culture of values
Negative: Fraud common in religious nonprofits. Why?
- Higher authority
- Excessive trust
Solution: Follow rules