Unethical behavior remains a persistent problem in nonprofits and for-profits alike. To help organizations solve that problem, organizations need to examine the factors that influence moral conduct, the ethical issues that arise specifically in charitable organizations, and the best ways to promote ethical behavior within organizations.
The corporate sector has no monopoly on greed. According to Internal Revenue Service records, a multibillion-dollar student loan charity organization abused its tax-exempt status by charging excessive interest on loans and by providing millions in compensation and lavish perks to its CEO and her husband, including use of the organization’s $31 million private jet for family and friends.
Unsurprisingly, these and a host of other scandals have eroded public confidence in our nation’s leadership. According to numerous polls, only a quarter of Americans think that top executives are honest. Even executives themselves acknowledge cause for concern. The American Management Association Corporate Values Survey found that about one third of executives believed that their company’s public statements on ethics sometimes conflicted with internal messages and realities. And more than one third of the executives reported that although their company would follow the law, it would not always do what would be perceived as ethical.
Employee surveys similarly suggest that many American workplaces fail to foster a culture of integrity. Results vary but generally indicate that between about one-quarter and three-quarters of employees observe misconduct, only about half of which is reported. In the 2007 National Nonprofit Ethics Survey, slightly more than half of employees had observed at least one act of misconduct in the previous year, roughly the same percentages as in the for-profit and government sectors. Nearly 40 percent of nonprofit employees who observed misconduct failed to report it, largely because they believed that reporting would not lead to corrective action or they feared retaliation from management or peers.
Remember that you must first identify past and potential future costs of failing to be ethically compliant. Will your organization lose funding or perhaps its nonprofit status? With more social media exposure of ethical violations is much easier for others to research.
What Can Your Organization Do to Remedy the Situation?
Set ethical standards, policies and guidelines for your organization. For example, have a code of conduct, provide ethical compliance training, and revise the code of conduct periodically to expand its reach
Manage the ethics conversation in your organization.Develop “ethics hotline” where people can report ethical concerns anonymously.·Your organization must develop a means to support the activity. Develop an array (current listing) of ethical threats and challenges that your organization is facing and is expected to face. Update this list periodically and use this list to predict where ethical challenges will come in the future. The process takes leadership in setting high ethical compliance standards. There must be a zero tolerance policy towards failures to be ethically compliant.