The public relies on nonprofit employees to play by the rules. They expect nonprofit professionals to use funds prudently and honestly, to serve their constituency and keep their noses clean in all their affairs. Nonprofits have a fiduciary and social duty to develop and uphold a code of ethics that covers all their activities.
Nonprofits should honor donors’ requests for anonymity and develop rules that require their organizations to not resell donor information. At the same time, you should acknowledge donors for their generosity with a letter of appreciation from the nonprofit. A code of ethics includes using the donations as publicized and respecting donors’ requests for using funds in specific ways. Finally, according to the Association of Fundraising Professionals, a finder’s fee or commission to professional fundraisers is unethical. Payments should be pre-arranged, and fundraisers must have the best interest of the nonprofit and its goals as their primary concern.
CEO salaries, program costs and staff compensation should be out in the open, available for the board, donors and the general public to view. Nonprofits should clearly spell out in their code of ethics who is responsible for funds and how they'll be used, including how much the nonprofit spends on travel, marketing and operations. Nonprofits that follow a strict code of transparency post financial statements on their websites and make them available on request.
No matter what kind of population the nonprofit serves, an internal code of ethics requires that all staff members treat those people with dignity and respect. Staff members of nonprofits also should respect and support a diverse culture within their ranks. In an ideal world, all program recipients should receive equal treatment, with no favors granted, and that should be the goal of nonprofit leadership. Leaders are above reproach and also treat their staff with the same respect given to the people served. Respect includes listening to different opinions, not forcing viewpoints on others and allowing people to express their various cultures freely without fear of reprisal.
Conflict of Interest
Every nonprofit should clearly state which kinds of activities constitute a conflict of interest for employees. Right from the start, employees should be clear about which activities outside and inside the organization may conflict with their duties. For example, an employee who sits on the board of directors for a major funding organization clearly violates the duality of interest ethics most nonprofits follow. If the code of ethics doesn't clearly state policy on an activity, employees should ask a manager before engaging in questionable actions that could jeopardize transparency .
- National Council of Nonprofits: Ethics and Accountability
- National Council of Nonprofits: Ethics in Fundraising
- Association of Fundraising Professionals: Percentage Based Compensation
- National Council of Nonprofits: Cultivating a Culture of Accountability and Transparency
- Colorado Nonprofit Association: Code of Ethics
- Nonprofit Risk Management Center: Ethics Accountability and Conflict of Interest
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."