Management Ethics In Nonprofit Organizations

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Management Ethics In Nonprofit Organizations

Management Ethics In Nonprofit Organizations


Ethics exists in a multitude of formats from the philosophical and abstract to the realm of applied contexts defined by statutes and codes. All forms vary in their situational importance and some present as contradictory to each other. Scholars and students often find that ethical studies within a particular field follow a similar developmental pattern of moving from concrete, or black and white, to a more fluid shades-of-gray model. Narrowing the focus to applied, organizational-level ethics in the nonprofit sector we find an emerging body of knowledge that is moving along this developmental continuum (Barrett, 2008).

The Importance of Ethics to Nonprofit Organizations

Ethics plays an integral role in the viability of nonprofit organizations for multiple reasons. Nonprofit organizations serve as stewards of public monies and as a result they receive tax exemption privileges. This benefit comes in exchange for the work and services they provide to the societal common good. Nonprofit organizations historically have filled the gap between (a) the goods and services provided by business and government and (b) the remaining unmet needs of communities. This typically includes the specialized needs of marginalized populations. Since the work of nonprofits receives public scrutiny and often depends on the generosity of donors to continue providing services, nonprofits have a vested interest in maintaining ethical organizations. Even the hint or perception of unethical behavior can destroy a nonprofit entity as donors and community members will typically not support a nonprofit organization labeled as unethical (Ostrower, 2007).

Organizations seeking to ride out the guilty-by-association phenomena, while maintaining their funding streams and reputations, have needed to take a proactive approach to demonstrating their ethical health during these troubled times. Striving to create an ethical context in which ethical behavior is the default behavior has served as one means of accomplishing this task. Nonprofit leaders can promote a healthy ethical context within their organizations by staying informed and actively promoting ethics within their organizations.

Engaging in regular organizational-level assessment serves as one method for gathering the data nonprofit leaders need to assess the current level of ethical health in their organizations. Working from a data-based vantage point maximizes the opportunity to reinforce a culture supportive of positive ethical behavior. This informed perspective decreases the risk of having an ethical lapse. Thus, a proactive approach to organizational ethics through periodic ethics assessment provides nonprofit leaders with the needed data to inform them about the ethical culture that exists in their organization, so they can best serve their missions and constituents (Ostrower, 2007).

Compliance: Important to Ethics but Not Enough

Separate from the empirical studies conducted in the field of nonprofit ethics, a large body of complementary work has focused on issues of compliance. Compliance typically refers to adherence to laws, policies, or procedures. Checklists represent a useful way to measure compliance by providing recommendations for how things should be in an organization. Primarily, three forms of tools exist in this arena: (a) checklists to determine ...
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