Similarly to the business-focused companies, nonprofits employ workers who represent organizational values and fulfill its objectives. Therefore, the organization should provide its employees with a code of ethics – a document that describes the staff’s behavior, mission, and goals, paying attention to possible sanctions and infractions. An incomplete code of ethics may negatively impact workers’ understanding of situations that happen in the workplace.
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In many cases, this document may be superficial, failing to ensure compliance (Cooper, 2012). This issue can arise for many reasons, one of them being the code’s vagueness. The organization called Delaware Alliance for Nonprofit Advancement (DANA) provides an example of a publicly shared code of ethics that discusses key behaviors, and goals of employees but does not acknowledge problems or specific situations.
DANA is a nonprofit organization based in the state of Delaware. It is focused on providing training courses for other local nonprofits. For example, it assists organizations in discussing policy issues, networking, strategy development, and other vital topics for a nonprofit establishment. Moreover, DANA advocates for the nonprofit sector and conducts research centered on nonprofit advancement. DANA’s code of ethics is linked to the Standards for Excellence Institute which developed the Ethics and Accountability Code for the Nonprofit Sector (DANA, n.d.).
In the preamble to the code, some nonspecific characteristics and duties of nonprofits are mentioned. Here, the document includes the necessity to adhere to federal, state, and local laws. Moreover, such integral ethical values as fairness, honesty, trust, responsibility, and compassion are mentioned. Then, the code includes eight primary guiding principles which outline possible concerns.
The first principle deals with the mission of the nonprofit. Here, it is mentioned that DANA and other organizations should work efficiently to fulfill the mission. One should note that while this document appears to be the code of ethics for DANA, it presents general information and does not provide specific examples. For instance, the second aspect talks about the governing body but does not include the specific structure of DANA.
Nevertheless, it specifies that the board’s duty is to assure that the nonprofit has all the necessary resources for conducting its operations. Next, the code outlines the employees and volunteers’ responsibility to “act in the best interest of the organization” (DANA, n.d., para. 10). Contributors should not act in their personal interest, although sanctioning methods are not mentioned for noncompliance.
Accurate financial record keeping and adherence to legal requirements are discussed as well. In regards to the public, DANA provides policies for openness, fundraising efforts, and public affairs. Here, the transparency of reporting and accessibility of information are highlighted. For example, “an organization’s fundraising program should be maintained on a foundation of truthfulness and responsible stewardship” (DANA, n.d., para. 14). This policy, while vague, offers a description of behavior for staff. Finally, the attention to the interests of people and participation in public affairs are encouraged in the code.
Overall, the document is exceptionally obscure, offering only some basic ideas under which every nonprofit should operate. DANA’s code does not provide any information that relates to this nonprofit’s mission. While it contains such general themes as “integrity” and “transparency,” the document does not offer its employees or the public any information about particular problems and practices such as gift-giving, bribery, misconduct, or unethical behavior. Furthermore, the code focuses or describing positive aspects of nonprofits and fails to acknowledge noncompliance. The outcomes of not performing according to the code of ethics are not mentioned. Such vagueness of the principles makes the document seem unreliable and unofficial.
Cooper, T. L. (2012). The responsible administrator: An approach to ethics for the administrative role (6th ed.). San Francisco, CA: Jossey-Bass.
Delaware Alliance for Nonprofit Advancement. (n.d.). Code of ethics. Web.
Code of Ethics
America’s nonprofit sector is committed to public service. Hard at work in communities across the country, nonprofit organizations are serving and meeting the needs of our citizens and strengthening our communities.
The success of nonprofit organizations depends upon public confidence and broad public support. Nonprofits are supported by individuals, corporations, and foundations through charitable contributions and volunteer efforts; by government through contracts and grants; by consumers through purchases and fees; and by the general public through state and federal tax laws.
The Standards for Excellence Institute is committed to raising the level of ethical and accountable practices in nonprofit organizations. Therefore, the Standards for Excellence Institute has released these Standards for Excellence (Standards) to serve as a model for nonprofit organizations to implement in their operations and governance.
Nonprofit organizations must comply with applicable local, state, and federal laws. These Standards build upon that foundation and go a step further. Based on fundamental values – such as honesty, integrity, fairness, respect, trust, compassion, responsibility, and accountability – these Standards describe how nonprofits should act to be ethical and accountable in their program operations, governance, human resources, financial management, and fundraising. Eight (8) Guiding Principles are provided, along with fifty-five (55) standards – more detailed performance benchmarks that will enable nonprofits to strengthen their operations.
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The Standards for Excellence Institute is dedicated to helping individual nonprofit organizations and the nonprofit sector live by the Standards for Excellence. The Institute provides educational programming and a voluntary leadership‐based certification initiative by which nonprofits are evaluated based on their compliance with the performance indicators outlined in these Standards.
The Standards for Excellence are intended to describe how the most well-managed and responsibly governed organizations should and do operate. They provide benchmarks to determine how well an organization is fulfilling its obligations to those who benefit from its programs, to contributors, and to the public. All nonprofit organizations are encouraged to pledge to commit to the Guiding Principles of the Standards for Excellence and to work toward implementing the practices and principles outlined.
Standards for Excellence ‐ Guiding Principles
Mission and Program
Nonprofits are founded for the public good and operate to accomplish a stated purpose through specific program activities. A nonprofit should have a well-defined mission, and its programs should effectively and efficiently work toward achieving that mission. Nonprofits have an obligation to ensure program effectiveness and to devote the resources of the organization to achieve its stated purpose.
Nonprofits are governed by an elected, volunteer board of directors that should consist of individuals who are committed to the mission of the organization. An effective nonprofit board should determine the mission of the organization, establish management policies and procedures, assure that adequate human resources (volunteer and/or paid staff) and financial resources (earned income, government contracts and grants, and charitable contributions) are available, and actively monitor the organization’s financial and programmatic performance.
Conflict of Interest
Nonprofit board and staff members should act in the best interest of the organization, rather than in furtherance of personal interests or the interests of third parties. A nonprofit should have policies in place, and should routinely and systematically implement those policies, to prevent actual, potential, or perceived conflicts of interest.
A nonprofit’s relationship to its employees and volunteers is fundamental to its ability to achieve its mission. Volunteers occupy a special place in nonprofit organizations, serving in governance, administrative and programmatic capacities. An organization’s human resource policies should address both paid employees and volunteers, and should be fair, establish clear expectations, and provide for meaningful and effective performance evaluation.
Financial and Legal
Nonprofits must practice sound financial management and comply with a diverse array of legal and regulatory requirements. A nonprofit’s financial system should assure that accurate financial records are kept and that the organization’s financial resources are used in furtherance of the organization’s charitable purposes. Organizations should conduct periodic reviews to address regulatory and liability concerns.
Nonprofits are private corporations that operate for public benefit with support from the general public. As such, they should provide the public with information about their mission, program activities, and finances. A nonprofit should also be accessible and responsive to members of the public who express interest in the affairs of the organization.
Charitable fundraising provides an important source of financial support for the work of most nonprofit organizations. An organization’s fundraising program should be maintained on a foundation of truthfulness and responsible stewardship. Its fundraising policies should be consistent with its mission, compatible with its organizational capacity, and respectful of the interests of donors and prospective donors.
Public Affairs and Public Policy
Nonprofits provide important vehicles through which individuals organize and work together to improve their communities. Nonprofits should represent the interests of the people they serve through public education and public policy advocacy, as well as by encouraging board members, staff, volunteers and constituents to participate in the public affairs of the community.