Ethical Dilemma #1: Tainted Money One of the biggest ethical dilemmas that nonprofits are faced with in their fundraising world is tainted money. A nonprofit needs the money to support itself, but is the source of the money in agreement with the values and mission of the institution? “Tainted money- This concerns conflict between an organization 's mission and the source of the contributed funds. For example, Mothers Against Drunk Driving would not accept money from Anheuser-Busch, because the company derives profits from the sale of alcohol. But an art museum or a historical society may have no issues with a gift from the same benefactor. An organization 's mission always needs to be top-of-mind with its board and fundraising staff …show more content…
There has been questioning of one contributor due to the nature of the business that they are involved with. Although the business is acceptable to the majority of the world, the religion that our institution is modeled after does not agree with the practices of this company; yet we accept funds from them. Not only do we accept funds from them, we also have this company’s name adorned on one of our buildings. Many have pondered the institutions decision to accept money from the company in question, but the institution feels they have a validated answer to why they accept the funds. The answer is simply that we have had a relationship with this company for more than a hundred years. The relationship started with the original individuals within the company when the institution I work for stepped in to provide healthcare for these individuals. It is argued that the institution I work for saved these individuals lives and they have never forgotten that. That company now passes down to each generation the importance of the impact my institution had on them a hundred years ago and that is why they give back to the institution. Does the institution providing needed healthcare to this group of individuals constitute accepting funds from a company whose practices we don’t agree …show more content…
My personal opinion is that I see nothing wrong with accepting the money because I do not view that company as having bad business practices – they make their money in an ethical way. It is just not in a way that the religion that my institution is modeled after agrees with. In that sense, I do think that the nonprofit I work for is weak in this area because they found a way to accept the funds that if had come from a similar company they would have denied it immediately. Ethical Dilemma #2: Compensation There are a number of organizations that use commission based compensation as a means for motivation. Within the world of fundraising this can create a problem especially within in nonprofits. “Compensation for fundraisers and fundraising consultants should never be connected to the amount of funds raised. In the spirit of philanthropy, fundraisers are motivated by advancing the mission of their organizations, not by "earning" a percentage of funds raised” (Burchill, 2010, p.1). The institution that I work for has fundraisers, such as myself, sign a code of ethics from the Association of Fundraising Professionals or AFP. In this code of ethics it has a section specifically pertaining to compensation, bonuses and finder
Many people have begun to question how they use the money they raise. About 81% of their funds are put towards their programs and services, while more reputable charities are usually
Being identified as a nonprofit, doesn’t necessarily mean it will be a charitable organization. Though the term has been applied to most nonprofit organizations, the fact is most nonprofits is structured using the economic model. The economic model is based on the traditional model of management designed to deal with the complexity of managing an organization (Bradshaw & Hayday, 2007, p. 4). This model acquires funding from multiple sources such as; individuals, government grants, corporations, and foundations. Though an nonprofit organizations may be identified by the Internal Revenue Service (IRS) as tax-exempt, it may use the same economic model and framework as a for-profit organization. According to Brainard & Siplon, (2004), the nonprofit economic model often mimics that of the private sector by using organized professionals to help determine the goals and vision of the organization (p. 439). It is widely believed that most nonprofits use the economic model along with an aggressive...
The nonprofit sector in America is a reflection some of the foundational values that brought our nation into existence. Fundamentals, such as the idea that people can govern themselves and the belief that people should have the opportunity to make a difference by joining a like-minded group, have made America and its nonprofit sector what it is today. The American "civil society" is one that has been produced through generations of experiments with government policy, nonprofit organizations, private partnerships, and individuals who have asserted ideas and values. The future of the nonprofit sector will continue to be experimental in many ways. However, the increase of professional studies in nonprofit management and the greater expectation of its role in society is causing executives to look to more scientific methods of management.
According to Charity Navigator (Are Nonprofit CEOs Overpaid?), certain industries pay more than others, specifically; an executive can earn more at an Educational charity rather than a Religious one. Geographical location typically reflects the variations in cost of living throughout the country. Naturally, charities with larger budgets can afford to provide higher compensation. The focus of an organization's mission can also have a significant impact on the amount of compensation available. The board of a nonprofit should have a documented policy for determining compensation and raises. While there are not very many charitable organization executives earning over $1 million dollars annually, it should still be of concern because such an amount is quite
Mr. Rapfogel was charged with conspiring to inflate insurance payments and keeping one million dollars for himself, most of which was stashed in his Manhattan apartment that he shared with his wife. Some of the money was funneled to politician’s campaigns, who then kept his nonprofit flush with government funding. The twenty year scheme is alleged to have skimmed five million dollars from the venerable charity. (Hawkins, 2013). The case was brought to light by someone known as a whistle-blower. A whistle-blower is a person who reports illegal activity of their employers or of their organization to authorities (Colorado State University-Global Campus, 2014). Cases such as this raise questions about nonprofit organizations and their ability manage finances and the oversight that may or may not be present.
This issues study is aimed to explain the importance of ethical business practices which also include social responsibilities and will be compared to an example of an unethical business practice. It will explore the different unethical issues in business, the benefits of running an ethical business and this will be done with reference to a certain case study.
In the world of non-profit organizations the fiscal year and its financial stability are just as important as its mission. One cannot exist without the other. An organization needs a mission, a set of values, and a vision the entire organization and its employees can unite behind. In large organization the leaders must determine the organization’s ethics and leadership structure to model and guide others in maintaining ethical practices.
Crutchfield, Leslie R., and Heather McLeod Grant. Forces for Good: The Six Practices of High-impact Nonprofits. San Francisco: Jossey-Bass, 2008. Print.
As Standard Oil Company’s founder, John D. Rockefeller passed out dimes to hungry children over one hundred years ago, “he believed he was fulfilling some sort of social responsibility” (Kreitner, 2008, p.55). Rockefeller may have been the pioneer of enlightened self-interest. When Chiquita partnered with the non-profit environmental group, Rainforest Alliance, to clean up its farms and working conditions, Chiquita was ultimately helping itself by helping its brand image and its own bottom line, not corporate philanthropy with a non-profit. This form of enlightened self-interest is different from other partnerships with non-profits because Rainforest Alliance “does not accept donations from companies that it certifies” (Kreitner, 2008, p. 71).
Nonprofit organizations are usually assumed to carry out their interactions with donors, employees, clients and other partners in an ethical manner, primarily because not-for-profit organizations are seen as serving altruistic purposes (Ingram, n.d.). True altruism focuses on an ethical behavior that results in doing good to people without expecting anything in return. Thus, leaders in non-profits are expected to make decisions that result in the benefit of their clients, rather than themselves. Unfortunately, nonprofits have recently come under a lot of scrutiny because of historical lapses in carrying out the decision-making process in an ethical manner. Non-profit leaders are usually tempted to carry out decisions in the same way as their
Although at the same time functional goals encourage unnecessary risk-taking and increased the probability of unethical and possibly unlawful behavior (James, 2015). All the same, the purpose of executive compensation is an incentive for well-trained executives that make the most of the firm’s value (James, 2015). Further, the benefit that is put in place for the executive is structured to remove all conflicts of interest amongst the executive and shareholders (James, 2015). Although, some workers feel as though the executive compensation is unethical; but according to James (2015) it is given to the executives that are well trained, therefore, it is ethical from his point of view. Additionally, the compensation package assists as an enticement for executives to participate in potentially risky, maximizing activities, and profits that benefit the shareholders whenever ventures are successful (James,
Although codes of ethics encourage better practice, higher standards, and attempt to hold NGOs and nonprofit organizations accountable, they do not include incentives or consequences (Sidel, 2005). However, they do include suggestions and most importantly resources. For example, the National Council of Nonprofits, Ethical Fundraising includes resources for how to handle gifts appropriately, suggestions for transparency, how to decline conditional gifts appropriately, and more. Since one of the largest issues in NGOs and nonprofit organizations includes funding and expenditures, finances are the main focus for codes of ethics. Therefore, one of the key tools for gaining trust and accountability in NGOs and nonprofit organizations is be transparency. The National Council of Nonprofits
Money laundering is the routing of illegal profits from bank to bank to disguise its existence. The illegal profits are usually made through activities such as drug trafficking, prostitution rings, illegal arms sales, and various other things. Unfortunately money laundering is a serious crime that is still prevalent in the United States and other countries. The Russian mafia, the Triad or Chinese mafia, and the Columbian drug cartel are just a few of the groups that partake in money laundering. No one knows exactly how much money is laundered yearly but it is estimated to be about $100 billion in the United States. The United States is not the only country affected by these numbers. The estimated amount of laundering is 2% - 5% of the world’s GDP, between $600 billion and $1.5 trillion dollars annually. Although there are hundreds of ways in which to launder money, some are more lucrative than others. For example, the Black Market Peso exchange, gold, and digital cash are some of the more common ways to launder money. Making it harder to crack down on money laundering is the fact that many countries do not have money-laundering laws in place like the United States does. These other countries make it possible for this illegal activity to carry on, and are only hurting themselves because money laundering creates a direct negative effect on their economy. If these nations want to fight money laundering they will need to implement laws against it. Banks could be one of the most useful tools in stopping the laundering of money.
Because one’s personal ethics are our foundation, they often influence how we administer ethical codes of conduct in carrying out our organizational duties. How close to the line are we willing to go before we cross over into the unethical arena of the mandates, rules, and regulations handed down to us in our professional career? If you are raised with the understanding that stealing is wrong - no matter how big or small – should you do it? For example, do you return the ink pen that you unconsciously put in your shirt pocket and took home which can now be used for personal use? The rules say that to ensure you are maximizing efficiency and work time, agency resources should not be utilized for employee celebrations or gatherings. Nor should public time be used to hold fundraising events to subsidize them. However, to boost morale and keep productivity up, should public organizations look the other way and allow such activities even on a limited basis? Svara states that the valuable aspects of each approach should be incorporated in one’s own ethical reasoning. One should identify those traits that define his or her character
In nonprofit organizations, the monetary support provided is not always directly related to the service provided, as patrons are not directly charged for services. So the success is measured by the quality of economically costed services.