Ethics 101 for Nonprofits

There have been a number of glaring lapses in the nonprofit sector recently, spawned by the economic times and an incremental decrease in standards of professional conduct. Undoubtedly the latest public relations disaster – documented in the movie The Art of the Steal – involving large charitable trusts such as the Pew, Annenberg, and Lenfest organizations; museums and foundations ; and elected officials – will be a constant uncomfortable reminder to all of us about the abuses of the public trust. But the success of such books as The Art of the Turnaround, by Kennedy Center President, Michael Kaiser, and the dubious messages contained therein, indicate that there’s some serious work that needs to be done in this all important component of our cultural future. Before your nonprofit hits the big or little screen (YouTube), you need to consider the implications of what you are about to do. Here are my ten “rules” for ensuring your nonprofit activities don’t go viral.

Public Service. Trustees and executives are selected or appointed to serve the public primarily, not to raise money, network, or increase the value of their own business or organization. They should maintain the highest professional standards in their positions. Adherence to Best Practices and Guidelines established by professional societies for museums and nonprofits should be demonstrated. It really is a privilege and an honor to serve the public and a higher purpose.
Conflicts of Interest. Organizations and individuals should strive at all times to avoid any real or potential conflicts of interest , whether involving business associates, family or friends, or in considering future dealings.
Transparency. Post minutes of meetings and annual reports. Reports should include forward looking statements of potential risks to be incurred (lawsuits, failure to obtain funding, etc.) Include salaries and compensation packages (with incentives) for paid staff.
Oversight. Establish advisory boards to provide professional guidance on your particular sphere of the arts or education. In addition to your financial accounting, have an independent third party oversee your day-to-day operations to maintain ethical standards and avoid conflicts of interest.
Donors. Cultivate the smaller contributors. While the 20-80 law applies here as elsewhere – 20 percent give (or do) 80 percent of the heavy lifting – the success of your operation depends critically on reaching this audience. You don’t have to look any further than the results of the last national election to appreciate the importance of grass roots support. Smaller donors and volunteers are the backbone of your organization.
Audience or Client-Centered Operation. Your tax-free status carries responsibilities. You are the custodians of monies for the public – it’s not your own money that is being dispensed. Allocation of funds should be considered from the interest and benefit of your audience, not solely the furtherance of your agenda.
Quality Council. Establish a formal group to investigate, analyze, and report on all complaints received from individuals, the media, governmental agencies, and evaluate and take action as needed. Identify corrective action(s) and take it.
Systemic Problems. When problems are recurrent or resistant to change, due to organizational culture, complexity of the issues, or the variety of stakeholders – both internal and external – appoint an ombudsman to help effect change.
Democracy in Action. A successful and self-sustaining nonprofit is built from the ground up; it is not a dictatorship speaking with one voice, but rather a consortium of viewpoints and aspirations with a common goal. Avoid spinning your message (i.e., being excessively positive), accept criticism, and take responsibility – across the board. If the President, CEO, Chairman of the Board, executive staff, and volunteers are not on the same page, you have more than a public relationships problem; you have an organizational problem, with ethical and moral issues close at hand. Think about fixing them before you address branding.
Empty Seats and Silent Turnstiles. Niche grant writing, eclectic programming (with a message, your message), pursuit of awards, fanciful marketing (dreamland), strategizing about the media (they know your game) – all lead you away from your core mission: serving, cultivating, and hopefully educating your audience and clients. Let them lead you, and your future attendees will follow.