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How to Foster an Ethical Culture in a Nonprofit

 In Board of Directors, Management

WHAT IS ORGANIZATIONAL ETHICS?

Organizational ethics refers to the responsibility of an organization to conduct its business in an honest, respectable, and appropriate manner. Organizations must take into consideration their own values and moral positions when determining how to define their “code of ethics.” Honesty, integrity, transparency, confidentiality, and equity are some examples of values that nonprofits should strive to foster in the organization’s culture.

WHY IS FOSTERING AN ETHICAL CULTURE IMPORTANT?

Simply put, nonprofits rely on the public trust to do their work. Trust is vital to a nonprofit’s legitimacy, for effectiveness, and for financial and non-financial support. Earning trust requires demonstrating a commitment to ethical conduct. For this reason, a nonprofit must strive to continuously earn the public’s trust through their commitment to foster an ethical culture.

HOW CAN A NONPROFIT FOSTER AN ETHICAL CULTURE?

  1. Polices, Polices, Polices. Codified rules can clarify expectations, establish consistent standards, and project a responsible public image. Key policies and procedures include:
  • Conflict of Interest policy
  • Gift Acceptance policy
  • Whistleblower policy
  • Compensation policy
  • Document Retention policy
  • Joint Venture policy
  1. Recruit and Hire Well. The leaders of an organization set an example of how the organization as a whole will behave ethically. For this reason, the board should be composed of individuals who are personally committed to the mission of the organization and understand their roles as a fiduciary (could add link to existing blog article about NP laws, and BOD) in performing the legal duties of a governing body. In addition, board members should be willing to ask uncomfortable questions-not just is it legal, but also is it fair? Is it honest? How would it feel to defend the decision on the evening news?
  1. Define the Nonprofit’s Values and Discuss Them Often. Create and adopt a statement of core values. Look to the Standard for Excellence for you state for guidance. Once the nonprofit has adopted its values make them known to individuals within the organization and the public. This can be accomplished by posting them on the website, holding periodic training on values and ethics and communicating the nonprofit’s values to new board members during orientation.

Sources:

https://www.councilofnonprofits.org/tools-resources/code-of-ethics-nonprofits

https://www.councilofnonprofits.org/tools-resources/ethics-and-accountability-nonprofits

https://ssir.org/articles/entry/ethics_and_nonprofits

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