7 Ethical Dilemmas Facing Nonprofit Organizations

If ethics were cut and dry, there wouldn’t be dilemmas; we wouldn’t have to use our moral compasses. Unfortunately, life is a little more complicated than that. In the nonprofit sector, there are various ethical and moral dilemmas that could creep in and bog down your straight path to doing more good.

At the AFP Mid-America Conference on Fundraising, Robbe Healey spoke to seven ethical dilemmas nonprofits will face. Healey is a member of the Association of Fundraising Professionals Ethics Committee, Vice President for Philanthropy for Simpson Senior Services and Founding Member of Aurora Philanthropic Consulting. Healey has worked in philanthropic fundraising and nonprofit management for more than 35 years.

The number one reason donors said they don’t give is because they don’t trust the sector. Choosing the right path could help change that perception. Let’s take back the trust that good organizations deserve by brushing up on the top ethical dilemmas facing the sector.

1. Tainted Money

A nonprofit can’t turn away money, right? After all, any gift helps you get one step closer to your mission. It’s a difficult situation when somebody is trying to offer money that may have a conflict of interest.

For example, you wouldn’t accept money that has been stolen or acquired from selling drugs. You also wouldn’t accept money if it were coming from somebody who goes against everything your mission stands for. Always consider where the money is coming from and whether there would be a conflict because of your mission.

2. Compensation

Never, and we mean never, connect the amount of funds raised to compensation. The motivation for fundraisers should be to help further the mission, not to make more money.

3. Privacy

Only keep the information that is necessary for your donors. Never get more than you need or use it for anything other than what you told donors you’d use it for. Be especially mindful of lists that you collect for email marketing pieces and more.

4. Appearance of Impropriety

Sure, it’s not illegal; but that doesn’t make it right. There are various activities you’ll need to be aware of that could come across to your constituents as shady even if they aren’t considered illegal. For example, AFP lists the example of a fundraiser directly benefiting from a benefactor’s estate gift. While not illegal, the sector would look down upon the behavior. Be wary of certain situations that might be perceived in the wrong way.

5. Stewardship

Donors want to know that you’re using the funds for what you said you’d use them for. Don’t promise donors one thing and then turn around and use the funds for something else. If you must change the usage of your funds, check with the donor first and abide by their wishes. They’ll appreciate the honesty and be more likely to continue giving.

6. Honesty

Remember what you learned as a kid—honesty involves telling the whole truth. That means leaving out specific details will inevitably blow up in your face (we’ve all been there). Tell the whole truth to your staff, donors and constituents, and nothing but the truth. Honesty goes a long way.

7. Conflicts of Interest

A conflict of interest could arise from multiple aspects of your organization; it could involve financials or the interests of members on your board. Be aware of situations where somebody has more at stake than the best intentions of the organization.

Remember, ethics require always listening to your moral compass; not just when it’s convenient for your organization. Not all ethical dilemmas will be apparent and some will be harder than ever. If you have an ethical dilemma you aren’t sure how to handle, seek outside guidance from somebody who can give an unbiased opinion. Also, check out the Code of Ethical Standards from AFP.

  • Jennifer

    Why not connect compensation to fundraising goals? Many employees are motivated if they earn commission from making a sale, why not use this principal as a motivation tactic in the nonprofit sector as well? It seems to just make business sense. I agree that ideally, yes an employee would fundraise to increase funds to further the mission of the organization, but at the end of the day, they are still an employee.