Category: Ethics

Developing Your Own Statement
The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector calls for “all organizations to incorporate diversity, equity, and inclusion into their work as part of their missions.” Most organizations have incorporated these principles into their organizational values, visions and goals. The killing of George Floyd at the hands of police has created untold pain and fear among Black communities but has also mobilized leaders and organizations from across the nation to stand against systemic racism. Staying silent in this time is not an option for organizations that have embraced a true commitment to diversity, equity, and inclusion. Making a statement can highlight your organization’s unique mission and expertise, and provide an opportunity for you to educate the community on how the field in which you work is impacted by systemic racism. It can also help your organizational stakeholders to clarify your analysis and action steps you can take.

Below are some steps to take in preparing an organizational statement:
- Read and listen to Black voices.
- Have an organizational conversation. Invite Black people to speak first if they choose to do so.
- Discuss the meaning of your mission, vision, and values statements in this context. How are they reflected your response?
- Expect push-back, and talk about it in advance. Receiving criticism of your statement may be the sign that you are part of creating change, not just stating platitudes. Your response to criticism will help you further your analysis and commitment.
For the content of your statement, consider the following questions:
- What is your mission, who do you serve, and how are people you are serving impacted by systemic racism?
- What are our organizational values and how do we put those values into action now?
- What analysis can we provide that is unique to our field?
- How does our analysis link to broader, systemic, and institutional racism?
- What help can we offer?
- What actions will we take, and what commitments are we making?
Always be non-partisan. See resources from Alliance for Justice on 501(c)(3) rules for addressing the actions of incumbent officials in an election year.

The process of creating a statement can help you deepen your commitment to racial equity, and uncover priorities you may have to deepen your work in this area. We invite you to claim your expertise and stretch to consider and name laws or policies in your field that need to be examined with a racial equity lens.

For more information on how you can incorporate the principles of diversity, equity and inclusion into the mission of your organization, please check out the Standards for Excellence educational resource packet Diversity, Equity, and Inclusion which offers advice and assistance on assessing your own diversity, equity and inclusion values, creating a strong and effective DEI policy, understanding the terms and language, as well as sample assessment and planning tools.

The Standards for Excellence 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. Members of Maryland Nonprofits have access to this and all 27 Standards for Excellence Educational Resource Packets through the member portal.

We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.
June 5, 2020
Fundraising and Working with Donors During the COVID-19 Crisis

In the midst of the current coronavirus pandemic, many nonprofits are faced with tough choices related to raising the necessary resources to meet their missions and support the great needs of the communities they serve. The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector provides guidance for how organizations should act when planning resource development and states, “An organization’s resource development program should be maintained on a foundation of truthfulness and responsible stewardship. Its resource development policies should be consistent with its mission, compatible with its organizational capacity, and respectful of the interests of donors, prospective donors, and others providing resources to the organization.”

Some of the decisions nonprofits are grappling with right now relate to special events that have been scheduled for a long time, which are vitally important to raise revenue in support of the organization’s important mission. Many have been forced to cancel events that were to take place in March, April, May, and June. Others are trying to develop contingency plans, expecting the cancellation of important revenue generating events for later summer, fall, and beyond.

Of course, many of these events have been in the planning stages for months and months with some donations and sponsorships already deposited in the nonprofit bank accounts. When faced with the legal and ethical considerations around what to do with such sponsorships for events that will likely be cancelled or significantly altered in light of the global pandemic, we can again turn to the Standards for Excellence code and its encouragement that “nonprofits must honor the known intentions of a donor regarding the use of any and all types of donations (including but not limited to: cash, in-kind, cryptocurrency, stocks, etc.).” We must use donations, including sponsorships, in the way the donor intended.

To address fidelity to donor intent, many organizations are reaching out to donors and sponsors who committed to events now cancelled to see if they would approve a change in their contribution from a “purchase of a ticket to attend a gala, dinner or auction” to a “completely tax deductible donation” that is not accompanied by a special dinner or entertainment. Such outreach helps the nonprofit honor the intention of donors and gives the donors the opportunity to support the work of the nonprofit in a different manner.

As nonprofits reach out to their donors with these requests, care should be taken to communicate with donors in a way that is respectful and honors the intentions that they initially placed on their gift.Every effort should be made to avoid placing undue pressure on donors in this time when we are all concerned about health, finances, job security, and emotional well-being. Many donors will agree to redirect their gifts, however, others may not wish to do so. As leaders in the sector, we can use the communication around change of gift intent as an opportunity to deepen our relationships with our donors, and express concern and compassion for their situation at the same time.

The Standards for Excellence educational resource packet on Fundraising, Solicitation, Acceptance of Gifts, and Working with Donors provides additional background on this subject and includes a helpful Model Solicitation and Acceptance of Gifts Policy.

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.

We share our sincere wishes for your continued good health and patience as we all navigate these challenging and uncertain times.

April 17, 2020
Ethical Storytelling on Social Media from the Markkula Center for Applied Ethics

“On social media, images and hashtags can spread like wildfire. Posts that go viral are usually those that prompt a visceral reaction from users who feel moved to reshare and, in the best cases, take action based on a post. The scale, reach, and free nature of social media make it lucrative for nonprofits on tight budgets to leverage it as a platform for soliciting donations and raising awareness through storytelling.”

Anita Varma, the assistant director of Social Sector Ethics, as well as Journalism & Media Ethics at the Markkula Center for Applied Ethics, recently wrote on the topic of Ethical Storytelling on Social Media. Read the full article here.

February 13, 2020
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
Failure to Address Succession Planning by the Markkula Center for Applied Ethics
A long-tenured executive director is uncertain about how much longer he intends to stay with his organization and has talked with a few members of the staff about the possibility of leaving. He has not spoken to the board or stated a clear intention, and the board is hesitant to address the issue out of respect. How can this board and executive director act ethically? Read this article from the Markkula Center for Applied Ethics, a Replication Partner based in Santa Clara, CA, to find out.
October 26, 2018
Lack of Board Engagement: Did this Board act ethically? By the Markkula Center for Applied Ethics

Disengaged board members fail to meet their ethical obligations to nonprofit organizations. If the executive director believes their nonprofit could raise more funds and serve more people, but the board’s lack of engagement is impacting growth, what options are there? Read this article from the Markkula Center for Applied Ethics, a Replication Partner based in Santa Clara, CA, to find out.

October 26, 2018
Nonprofit Fraud: Did this Board act ethically? By the Markkula Center for Applied Ethics

Boards have an ethical duty to understand and fulfill their responsibilities to a nonprofit, including rigorous financial oversight. If a nonprofit loses $900,000 over eight years due to theft by the executive director, was the board acting unethically? Check out this article from the Markkula Center for Applied Ethics, a Santa Clara, California-based Replication Partner, to find out.

October 26, 2018
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
Managing Difficult Board Members

You know who they are.

They engage in sidebar conversations with other board members or even the members about what they think is wrong with the board or the executive director or the organization in general. They joined the board simply to promote themselves or their business and then come up with schemes to get the organization to buy their services or products. They ask for special favors such as upgraded airfare or free tickets to a fundraising event or free products from vendors. They commandeer meetings and interrupt other board members or talk incessantly. They don’t show up for meetings. They don’t have their assigned tasks ready when asked or drop the ball altogether. They never raise a single dime. They insist money be spent on projects that are not in keeping with the mission or they come up with grandiose projects for which they will bear no responsibility. The over-scrutinize everything the CEO does and never find anything worth praising. They have unreal expectations of the CEO, often calling at home or while he/she is on vacation. They are rude to volunteers or members. They have no comprehension of nonprofit governance and often make suggestions that are contrary to maintaining nonprofit status. They are willing to break the law, falsify tax documents or behave unethically. They date or have a romantic relationship with a staff member. They donate a large amount of money so they can blackmail the other board members or CEO or staff with their generosity. They go behind the CEO’s back and direct staff to perform certain tasks. They get their friends hired to the nonprofit. I could go on. These are just a few of the things I (or my colleagues) have personally experienced. The point of this article is what is a CEO or board member to do with board members who misbehave? Years ago I was speaking to a peer explaining a particular problem I was having with a board member. He gave me a piece of advice that was golden. “Put a board member between you and the problem.” In other words, it is the responsibility of the board to manage its membership and even the most talented CEO must turn to the board for assistance in dealing with bad board members. This isn’t always easy because frequently board members don’t want to be confrontational or they hope that a problem will eventually work itself out. Most often though, problems do not go away on their own and ignoring them can cause them to grow. Problems are best avoided through written policies, governance structure, and organizational culture.

A clear set of guidelines such as a “Conflict of Interest” statement that each board member must agree to and sign, can help organizations fend off attempts at hijacking the organization for personal gain. Conflict of Interest statements can also define what board members are free to discuss with non-board members or the public at large. The Standards for Excellence Institute’s Board Excellence Handbook includes a sample Conflict of Interest statement that can be tailored to fit your organization.

Board members who don’t attend meetings can be dealt with by establishing a policy for meeting attendance. I’ve always favored the policy that requires a board member who misses two meetings in a row be automatically removed and must affirmatively be voted back on the board. This saves the board from having to vote members off the board, which so often boards are reluctant to do. Establishing clear guidelines for fundraising expectations can also save the board headaches. After talking with CEO’s for several years, I would hazard a guess that well over eighty percent of board members do not raise money for the organization they serve. This is contrary to one of the essential responsibilities of being a board member, fundraising. How a board handles an obnoxious person is a reflection of organizational culture. Ideally the president or chair of the board should manage meetings in such a way that no one person can dominate the agenda or bully the other members. However, if board behavior is out of hand, it might be time to call in a consultant to conduct board training.

And speaking of board training, does your organization have a board handbook and are new members provided with training? This is an area that is often overlooked or dismissed. And while organizational expectations might seem obvious, it should be remembered that people are born “board members” and many people who find their way onto board service are well-meaning volunteers, not governance experts.

The functionality and health of the board of directors is a direct reflection of the health of the nonprofit. If a board is dysfunctional, the organization will be dysfunctional. If a board is focused, healthy and mission driven, the organization will be the same. If you are dealing with problematic board members, it’s time to take action; delaying will only cause the problems to grow.

Bunnie Riedel is a Standards for Excellence Licensed Consultant. Her areas of expertise are board development, strategic planning, communications and media relations and public policy advocacy. riedelcommunications.com

June 28, 2017