Ethical Challenges and Choices for Nonprofit Executives

Ethical challenges are sometimes referred to as the difficult choice “between right . . . and right.”  Well above the non-negotiable boundaries of the law, conscience, and/or one’s own faith, there are often grey areas in our lives where a choice must be made between valid, but competing, courses of action. This is the kind of high level decision-making that nonprofit boards hire executive directors to tackle.
One challenge we’ve touched on before in discussions of corporate sponsorships is the decision to take money from a company whose industry, product, advertising, hiring practices, or philosophy are arguably contrary with your mission. Does the benefit to fund your program–which could be substantial–outweigh the community’s potentially misguided perception of your mission? Can you find a win-win that doesn’t compromise your nonprofit’s values but also helps the corporation improve its image?

As seasoned nonprofit leaders know, many more ethical challenges exist in our everyday lives. Here are a few examples (all borrowed from real life):

Privacy. Your data base contains deep detail about a number of wealthy individuals in your area. Some, although not all, are your donors and the rest are dormant. Your development budget and staffing is really tight. Another nonprofit whose mission is compatible, but not competing, with yours has offered you a very nice fee in order to access this data for their own planned giving and cultivation. You don’t know whether your predecessor as development director had a privacy policy which was shared with these individuals at the time the data was gathered. You appreciate that some donors are sensitive about how new organizations acquire their names. Should you take the fee and share the data?

Events. Your nonprofit serves minority youth in a low-income area, and you’re raising money for a badly needed recreation center. Your board is looking at different kinds of special events for fundraising in 2011. One idea is a golf tournament, which you think you might be able to raise money with, and a private country club has offered to host the event within your budget. The exclusive club has never seemed to embrace people of color in its membership, nor is golf a sport that the population you serve can afford. Should you go with this event and/or venue?
Social/political agendas. You have received news of funding for your new teen health outreach/education program from a large, faith-based foundation in your area that has a conservative stance. You have just been informed that the program has also been awarded a startup grant from a smaller foundation that is identified with progressive policy, particularly on behalf of the gay, lesbian, bisexual and transgendered community. The large funder advocates abstinence and the new, smaller funder sees your program as an opportunity to teach safe sexual behavior, including condom use, as well as acceptance for alternative lifestyles. Your program hasn’t even rolled out yet. Can you deliver program that satisfies both funders, or should you finalize the curriculum based on one perspective, and return the other foundation’s money?

Media coverage. A reporter from a major news outlet in your area calls you with a specific story idea in mind. It’s not really your primary program area, and in fact another nonprofit (with whom you probably compete for donors, grants, and volunteers) has a much stronger, more successful project that would fit the reporter’s story beautifully. It’s a pressing community issue that certainly warrants more public awareness. Do you do the interview, trying to bend the angle to be more of a fit to your own organization . . . or refer the reporter to the other nonprofit?

Employment. Your organization has had a lean year. It’s time for performance reviews and salary adjustments for your 12 staff members. Your three program managers have performed exceptionally well in spite of various internal and external challenges, and they are the star performers who make it all work. If you give them a modest raise (which they clearly deserve), you will have to eliminate an entry level support position. If you don’t reward your core leaders, they may well seek other jobs; if you eliminate the support job, morale and productivity throughout the team will be affected. What do you do?
Board education. You’re an executive director with a pressing problem on your desk that needs prompt attention. The solution you’re inclined to seek is theoretically large enough in scope to alter your organization’s major program, and, according to your bylaws, thus requires board approval. Your next board meeting is three weeks away. Discussing this issue would be an excellent opportunity to educate your board on timely challenges in your industry and the true “nuts and bolts” of your operations. Do you wait on the solution until your board has had a chance to really discuss it in person and take a vote, or do you make your own decision and explain to the board later why the timing dictated that you not bring it forward as a board action?
In-kind donors as vendors. As it has evolved and grown, your nonprofit has enjoyed the generous donation of in-kind printing for the past two years from a particular local shop. Now you have a budget to purchase printing, and you’ve gotten bids from several providers. Your in-kind donor’s bid is significantly higher. Do you owe that printer the work?
Our goal isn’t to provide the answers but to help you recognize these challenges as they arise. Too often we fear talking about these kinds of questions because tempers may flare or feathers will be ruffled.
Once you can appreciate that your dilemmas are of an ethical nature (i.e., not an obvious “right” answer), one tool is Rotary International’s Four-Way Test. Is has been the cornerstone for Rotarians worldwide for decades:

“Of the things we think, say or do —
Is it the truth?
Is it fair to all concerned?
Will it build goodwill and better friendships?
Will it be beneficial to all concerned?”

Another way to help guide your choice is to think about the ramifications of publicizing your decision. How will you feel if your choice becomes a headline in tomorrow’s paper, or on the evening news? How will the specific people whose opinion you most respect feel about you or your organization?

In closing, it is naïve to assume that ethical challenges have an obvious answer. As adults and nonprofit professionals, we are confident within the learned boundaries of ‘right and wrong’ (“Should you take something that does not belong to you?”) and can focus on the deeper questions that emerge in our lives, the people we work with, and the people we serve. Remember that part of leadership is facing fears and being willing to have difficult conversations. Ethical challenges confront us virtually every week. Your first task as leader is to see them and prepare to move through them with grace and wisdom. Together, your board and senior staff must build the trust and the fortitude to address ethical dilemmas honestly and directly, making choices that you all can live with.

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