Category: Best Practices

The Ethics of Social Media and Nonprofits from the Markkula Center for Applied Ethics

“The vast majority of nonprofits use multiple forms of social media to raise money, find volunteers, or take some action on behalf of the organization, with the goal of advancing objectives. Is your social media program fulfilling your mission? You need to ask yourself three questions.”

Joan Harrington, the director of Social Sector Ethics at the Markkula Center for Applied Ethics, a Replication Partner of the Standards for Excellence Institute wrote a blog on the Ethics of Social Media and Nonprofits. Read the full article to learn more about this topic.

February 13, 2020
Developing a Code of Ethics

This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

Back in the mid-1990s, I had the privilege of working with the volunteer taskforce that ultimately developed and released the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector in 1998. The group had all the hallmarks of an exemplary volunteer team—incredibly dedicated, extremely knowledgeable, and willing to roll up their sleeves to get the job done! I learned so much from this group and I’m grateful for their service. Quite a few of these volunteers still support the Standards for Excellence program in various roles.

One of the projects this taskforce completed was a large-scale review of all of the existing codes of ethics that we could find from a variety of professional industries, the government, the private sector, and the nonprofit sector. Volunteers completed a substantial amount of homework to collect these codes. In these pre-internet years, finding such documents took a lot more work than it does today! The volunteers read each one, studied the topics addressed, and completed a matrix to assess the strengths and weaknesses of the various codes   It was a terrific undertaking that resulted in one of the most comprehensive code of ethics for nonprofits that exists today.



Images from L-R: The cover of the very first Standards for Excellence code (circa 1998) and the first national edition of the Standards for Excellence code (circa 2001)

Having a code of ethics for the entire nonprofit sector is helpful to outline how nonprofit organizations can and should govern and manage their work. It is also important for individual nonprofits to have their own code of ethics to guide its work and decision-making. The Standards for Excellence states that nonprofits should “ensure that they have an explicit and clear set of ethical principles and, as appropriate, operational or program standards that have been discussed by their board and staff and that are transparently clear to all stakeholders.”

More information is available in the Standards for Excellence educational packet on developing a code of ethics which includes discussions of the reasons for having a code of ethics, how nonprofits can put their values into practice, types of codes of ethics, training on the ethics code, and steps to developing a code of ethics.

This educational resource packet and the full series of all packets  – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

January 30, 2020
Creating Nonprofit Volunteer Policies

This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

So many of us volunteer for nonprofits. My best volunteer experiences leave me with feelings of hope and accomplishment that the mission of the organization was being well served. It is easy to feel pride and respect for a nonprofit organization that you volunteer with when you know you were part of a stellar effort and you can see real, tangible results.

These days, I feel grateful for the chance to volunteer as a religious education teacher once per week with a terrific group of five and six-year old children. I feel supported in my efforts by receiving curricula and tools to carry out my work and I am thankful to be able to learn from the other teachers during school wide, bi-monthly teacher meetings. I am lucky to work with a kind, capable director who ensures all of the volunteer teachers possess everything they need for success.

Volunteers are an essential part of just about any nonprofit organization. As such, it is crucial that volunteers are treated with respect and that they are managed effectively – after all, they are giving you their time. The investment an organization makes to carefully recruit, train, and supervise volunteers means that volunteers are not free, making effective management all the more crucial. Organizations should spend the time and effort in having written, board-approved policies and procedures to govern the work, actions, and safety of both employees and volunteers regardless of how frequently or in what capacity volunteers are used. These policies should guide, direct, and clarify your organization’s relationship with its volunteers.

The Standards for Excellence educational packet on Volunteer Policies outlines what should be incorporated into excellent volunteer policy. A few of the topics that may be found in a volunteer policy include: volunteer standard of conduct, absenteeism, grievance procedure, media conduct, alcohol/drugs, harassment, dress code, confidentiality, conflicts of interest, partisanship, proselytizing, change of placement, reporting misconduct, safety/liability, and discontinuation of volunteer service. It also comes with customizable companion documents such as Model Volunteer Program Policies and Procedures, a sample volunteer job description and a sample volunteer and intern agreement.

This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

January 23, 2020
How Do I Prevent Conflicts of Interest at My Organization?

This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

Its that time of year again! For many nonprofit boards, this is the time of year when all active board members are asked to complete an annual conflict of interest disclosure form. Such forms should be completed when an individual (such as board member, staff member or volunteer with decision making authority) becomes affiliated with a nonprofit organization and annually thereafter.

Conflicts of interest involving nonprofit board members, employees, or volunteers can undermine the public’s trust and confidence in any nonprofit. It is important that nonprofits have policies in place to address conflicts of interest to maintain public trust and ensure that the organization is compliant with requirements of the Internal Revenue Code and regulations. Conflicts of interest can not only harm the organization’s reputation but could even result in the loss of tax-exempt status.

Each nonprofit should have a board-approved conflict of interest policy and statement that is applicable to “board members, staff, and volunteers who have significant, independent decision-making authority regarding the resources of the organization.” A conflict of interest policy should “identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts, and should provide a review of individual transactions by the uninvolved members of the board of directors.” (Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector.) The conflict of interest statement should also provide space for individuals to disclose any known interests that they or a member of their immediate family may have. Each organization should carefully and consistently follow the tenets of its conflict of interest policy throughout the year.

More information is available in the Standards for Excellence educational packet on conflicts of interest which outlines what conflicts of interest are, how to identify them, and what conflict of interest policies and procedures should look like. This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute. Amy Coates Madsen, Director of the Standards for Excellence Institute, has also written a blog entitled Three Tips to Prevent Conflicts of Interest at Your Nonprofit.

January 16, 2020
Nonprofits and Political Advocacy

This is part of a special series, brought to you by the Standards for Excellence Institute, to provide nonprofit leaders with a brief nonprofit governance and management tip weekly over the course of 2020. We hope these short tips will be helpful to you and the nonprofits you serve. If you have suggestions for future topics, please forward these to acmadsen@standardsforexcellence.org.

It’s an election year and it’s important for nonprofits to understand what they can and can’t do when it comes to political advocacy. There is a common misconception that nonprofit organizations are legally prohibited from engaging in advocacy or lobbying activities. This is entirely untrue. Nonprofits can advocate and lobby so long as they abide by federal and state regulations. In fact, nonprofits should engage in advocacy in or to represent the interests of the people they serve and “influence public policies that affect the organization’s ability to achieve its mission.” When nonprofits do engage in lobbying and advocacy, expenditures must be disclosed, paid lobbyists or staff that engage in lobbying must be properly registered with the state and Congress if necessary, and most importantly all lobbying and advocacy activities must be nonpartisan. This means that nonprofits may not endorse or imply support for or opposition to a particular candidate or contribute in any way to a political campaign. However, there are numerous ways in which nonprofits can be active during election season, from the provision of nonpartisan study, analysis, or research to the hosting of candidate forums. It is therefore crucial that nonprofits “have a written, board-approved policy on advocacy defining the process by which the organization determines positions on specific issues.” (Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector)

More information is available and helpful models and sample are available in the Standards for Excellence educational resource packet, Advancing the Mission through Public Policy which outlines the benefits of advocacy and the limits on and legal requirements for nonprofit lobbying. This educational resource packet and the full series of all packets – including sample policies, tools and model procedures to help nonprofits achieve best practices in their governance and management – can be accessed by contacting a licensed Standards for Excellence replication partner, one of the over 150 Standards for Excellence Licensed Consultants, or by becoming a member of the Standards for Excellence Institute.

January 10, 2020
Four Things Your Nonprofit’s Board of Directors Should Do to Start Out the New Year by Embracing Best Practices
This article was originally published by the National Council of Nonprofits on January 18, 2019.

It never fails. As soon as the iconic glittery New Year’s ball makes its descent in Times Square and the calendar turns to January nonprofit boards review their list of goals for the new year and begin to tackle tasks like updating woefully out-of-date bylaws and tightening up conflict of interest policies. Boards look at ways that they can ensure legal requirements are followed by their organization and that their next audit will come back squeaky clean. But there is more to running an ethical, accountable, and transparent nonprofit than just legal and accounting requirements. Boards of directors can set the tone for the organization by conducting regular reviews of core governing and operating policies and procedures.

In our work at the Standards for Excellence Institute, and through our parent organization, Maryland Nonprofits, we encourage nonprofits to embrace ethical and accountable management and governance in all their efforts. Our blueprint for nonprofit best practices encourages organizations to assess their own operations, governance, and management against our set of best practice standards, the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code is supported by a wide array of educational resources and tools, plus an accreditation and recognition program carried out by partners like state associations of nonprofits as well as consultants working around the nation.

As the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector states, “Nonprofits depend upon effective leadership to successfully enact their missions… Board members are in a position of trust to ensure that resources are used to carry out the mission of the organization…”

Four Things Your Board of Directors Can Do to Embrace Ethical, Accountable, And Transparent Values
1. Review your bylaws:
- Do the bylaws describe standing committees or positions that no longer exist?
- Do they address modes of communication that you rarely employ?
- Have you moved away from some of the statements in the bylaws in a way that encourages you to re-think the clauses in the bylaws or does the organization need to resume past practices to avoid “mission creep”?
1. Review the position description for board members and officers:
- Do the roles and responsibilities adequately describe what is really needed for an individual to succeed in helping to advance your organization’s mission?
- Are the roles and responsibilities consistent (or in opposition to) the clauses of your organization’s governing documents, such as your bylaws?
- Do you find that your list of expectations for board members is helpful in the board recruitment, selection, and orientation process? Hopefully, this document is shared with board members BEFORE they accept a nomination to serve on the board. There is nothing worse than investing a lot of time recruiting a board member only to find out that he/she is unable or unwilling to carry out the expected responsibilities.
1. Take care in completing your annual conflict of interest statements.
- Each nonprofit organization should have a board-approved conflict of interest statement that, as the Standards for Excellence code states, “is applicable to board members and staff, as well as volunteers who have significant, independent decision-making authority regarding the resources of the organization.”
- The annual conflict of interest policy should “identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts and should provide for review of individuals transactions by uninvolved members of the board of directors.” (Standards for Excellence code)
1. Review the performance of your current board members and board as a whole.
- Don’t wait until the board presents its slate of new members to assess the strengths and weaknesses of your current board. Undertaking an assessment now can help your nonprofit know what talent and experience should be targeted in your next round of board member recruitment.
- Are your current board members fulfilling their responsibilities (fiduciary, fundraising, governance, attendance, etc.)?
- Do your current board members complete an annual or bi-annual self-assessment of their service as a board member and the board’s service as a whole? 2019 would be a great year to start this practice.
Whether we are “trusting the magic of new beginnings” (Meister Eckhart) or simply taking advantage of a lull in the frenetic pace of nonprofit organizations, the fact remains that many nonprofit boards take the opportunity to embrace improvement at the start of the calendar year. Perhaps this appetite for stronger ethics and accountability is even more pronounced at this time after a few high-profile nonprofit organizations have found themselves in the midst of serious investigations and sanctioning in recent months.

The board of directors in any nonprofit serves as a crucial player for demonstrating the values the nonprofit espouses and lives. We hope 2019 offers your board the opportunity to implement best practices and re-committing to doing its best at doing good.
January 31, 2019
Upholding Fundraising Standards and Ethics
The Standards for Excellence Institute has been following a news story in Baton Rouge, Louisiana about Timothy Young, the CEO of Open Health Care Clinic and the HIV/AIDS Alliance for Region Two, Inc. A series of articles describes a situation where Mr. Young negotiated a special compensation arrangement with his board, including an incentive that would entitle him to a bonus or finder’s fee for major gifts made to the agency under his leadership. This story raises important questions related to best practices in governance and management of nonprofit charitable resources, and provides a sharp example of the importance of embracing best practices, as articulated in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector. For over 20 years, we’ve been encouraging nonprofits to commit to and live by the Standards for Excellence tenets. This story highlights the need for our fundraising standard:

Resource development personnel, including both employees and independent consultants, should not be compensated based on a percentage of the amount raised or other commission formula.

Of course, the Institute is not the only entity that takes a stand on percentage-based compensation for nonprofit professionals who are raising money. The Association of Fundraising Professionals (AFP) also asserts that compensating fundraisers based on commissions or percentages is unethical. This professional association of fundraisers and development professionals recommends compensation based on a set fee. In addition to guarding against hiring fundraisers on a percentage basis, the Association’s Code of Ethical Principles and Standards for Professional Practice also makes it clear that fundraisers should not pay, seek, or accept finder’s fees, (or) commissions.

As we describe in our Standards for Excellence educational resources on this topic, commission-based compensation for fundraisers is considered unethical and inappropriate for many reasons, including:
- The practice may undermine the public’s trust in the nonprofit organization;
- The fundraiser’s self-interest may appear a larger motivation than support of the mission, which is unintended negative messaging associated with the organization;
- It is considered unprofessional or amateur – professionals are compensated for their time, amateurs are not;
- The IRS may conclude the fundraiser’s compensation is unreasonable, constituting an excess benefit, and putting the tax exemption of the organization in jeopardy;
- The practice encourages fundraisers to place pressure on donors for immediate needs, which can prove to be detrimental to the nonprofit organization and the fundraiser over the long-term;
- It may be viewed as privately benefiting fundraisers, rather than serving the public purposes of the nonprofit; and
- The practice may short-change the organization or the fundraiser.
As is often the case, the story in Baton Rouge has its share of twists and turns, including major planned gifts that were promised but not yet received, investigations that were promised, and concerned staff members. It is always courageous for leaders of an organization to stand up for the mission of the organization and their ethical principles. It appears that that is exactly what happened in Baton Rouge, where several executives left their jobs in protest over questionable fundraising practices that threaten the public’s trust in OHCC, and put its tax exempt status on the line.

For more information on the Standards for Excellence code, please click here: https://standardsforexcellence.org/Home-2/code
June 27, 2018