There are many ethical challenges that nonprofit organizations can encounter. These challenges can occur within many different function levels of the organization, including marketing, fundraising, and management. Examples of ethical issues can include volunteer management, effective leadership, board of directors, and the marketing and fundraising functions.
Ethical Challenges in Volunteer Management
One example of an ethical challenge that nonprofits may face involves effectively managing volunteers. Many nonprofits rely heavily on volunteer labor to perform many functions. These volunteers work in areas such as management, fundraising, lobbying, public speaking, and many other activities that are usually paid positions in for-profit organizations (Cooper, 2000).
Although volunteers are not paid, there is an expectation for volunteers to act in the best interests of the organization (Malloy & Agarwal, 2001). But the challenge for nonprofit organizations is to use their volunteer’s time ethically.
Ethical Challenges for Nonprofit Leadership
Leaders within nonprofit organizations have an ethical responsibility to act within the organization’s best interests. The nonprofit leader has the main responsibility of effectively leading the organization to achieve its mission and goals (Mason, 1992a). Moreover, nonprofit managers and supervisors set the ethical tone throughout the entire organization.
Managers should be aware of their ethical behavior and decision-making because employees form ethical perceptions about the organizations based upon their actions (Malloy & Agarwal, 2001). If managers are getting away with unethical behavior, there is a chance that employees will follow their manager’s examples. The ethical culture of any kind of organization begins with its management.
Ethical Challenges for Nonprofit Boards
Related to nonprofit leadership is the ethical behavior of the board of directors. Nonprofit boards are comprised of volunteers that usually have a strong commitment to the mission of the organization. They contribute their knowledge and expertise toward furthering a nonprofit organization’s goals and mission simply because they believe in the cause.
Decisions made by the board of directors can set the ethical climate for the organization. Ethical challenges within nonprofit boards usually happen in the everyday decision-making for the good of the organization. Many nonprofits find themselves in the middle of political battles, budget crises, and competing for donor dollars. Moreover, nonprofit boards are constantly answerable to stakeholders and are expected to perform their “due diligence” in decision-making or be susceptible to legal ramifications (Whitehouse, 2004). Consequently, nonprofit boards must consistently remain ethical in their decision making to benefit the core mission of the organization.
Ethical Challenges in Nonprofit Marketing
Nonprofit marketing has often come under scrutiny because of the negative publicity surrounding the use of large advertising budgets and marketing campaigns that are comparable to for-profit organizations. In today’s economy, donors are hard to come by and some believe that nonprofits need to do whatever it takes to remain solvent to continue doing good in the community. Ethical dilemmas in nonprofit marketing can include:
- Using marketing strategies or tactics for all kinds of social problems
- Using marketing strategies across cultures
- Using whatever means necessary to get money into the organization
The ethical challenges of a nonprofit organization receive a lot of attention because they affect the overall operations and budget of the organization. Nonprofit organizations have a responsibility to behave ethically through volunteer management, leadership, and with marketing. The values and mission of nonprofit organizations should filter into the ethical culture of the organization. Donors should be aware of this culture and trust that their money is being used in the right way.
Sources
- Cooper, T. L. (2000). Handbook of administrative ethics (2nd ed.). New York, NY: Marcel Dekker Inc.
- Malloy, D. C., & Agarwal, J. (2001). Ethical climate in nonprofit organizations. Nonprofit Management & Leadership, 12(1), 39.
- Mason, D. E. (1992a). Ethics and the nonprofit leader. Nonprofit World, 10(4), 30-32.
- Whitehouse, S. (2004). The Sarbanes-Oxley Act and Nonprofits: "but I thought that didn't apply to us". Nonprofit World, 22(5)
Michele Whitney - Over 10 years of diverse professional experience, PhD candidate in Public Service with an undergraduate degree in Marketing and an MBA.
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