Preface and Acknowledgments--"Ethics in Nonprofit Organizations"
Preface
In January 2013, the New York Chapter of the NAACP and Hispanic Federation publicly opposed a City of New York law that banned over-sized sugary drinks. The source of this opposition raised some eyebrows, as the intent of the law is to help reduce the incidence of obesity and diabetes, which public health officials report disproportionately affect minority communities. One might have expected that both organizations would be by the side of Mayor Michael Bloomberg, who had spearheaded the crusade against these health-damaging products.
In response to questions about why these organizations filed court motions to oppose the March 2013 implementation of the law, reporters were sent a joint statement from the NAACP, Hispanic Federation, and the American Beverage Association—the trade association that represents the soft drink industry, which is the target of the law. As one might have guessed, the association’s members are some of the largest financial supporters of both of these nonprofit organizations, as documented by the media.1
Did the NAACP and Hispanic Federation join the American Beverage Association as a quid pro quo for donations they received? If so, this is likely not illegal in New York, or perhaps any other state, but most “reasonable” people would consider this to be unethical behavior by these two organizations. Other “reasonable” people might disagree.
Ethical issues come up all of the time in nonprofit organizations, and board and staff may spend hours deciding the “right” approach to take and passionately argue compelling, but opposite, positions.
The purpose of this book is to explore in some detail what it means to take the “right,” or ethical, approach. Included in this book are some common, and some not so common, situations that have ethical implications for nonprofits. For some of these situations, there may be no obvious right answer. And in some situations, each apparent option may have drawbacks that may violate competing principles—creating ethical dilemmas. Even the most ethical people will have differing opinions on how one should deal with any particular issue. Some of this disagreement may occur because they take differing approaches to ethics.
Our initial exposure to ethics concepts and principles comes from many sources early in our lives, but principally from our parents or others who take care of us. Common examples we may have heard as youngsters might include: “Don’t hit your brother.” “Don’t wake Daddy.” “Give your aunt a kiss.” “Share your toys.” “Don’t waste your food (there are millions of starving children in China).”
Later, we learn behavioral concepts from our teachers, the popular media, and our classmates. Examples: “Wait your turn.” “Don’t lie.” “Play fair” “Don’t steal.” “Say you’re sorry.”
Many of us have been exposed to age-old ethical concepts from our spiritual advisors: “Honor your parents.” “Do not covet.” “Do not commit adultery.” “Do not murder.” Many of these ethical concepts are universal, adopted by many different religions and by those who do not profess to have any religion.
And still later, we learn more from our professors and our work supervisors. Examples: “Be loyal to your organization.” “Don’t cover up misconduct.” “Be a good leader and a good follower.” “Do your share of the work, and don’t take credit for the work of others.” “Don’t criticize people in front of others, and praise them when they are in front of others.”
And there is little debate that our ethical perspective is affected by the media. Television has always had a strong influence on how behavior is portrayed as millions watch and are influenced. Some of the most popular television shows today focus on main characters behaving badly—House, Breaking Bad, and The Sopranos come to mind. Newspapers and radio give their interpretation of behavior and whether it is good or bad. Lately, I would include blogs and social media (i.e., Facebook, and other popular social networking sites), as participants seem to feel free to bare their souls to (almost) perfect strangers and perfunctorily chronicle personal behavior they would be embarrassed to share with their mothers. They fail to recognize that doing so may have as much or more permanence than what may have been on the Rosetta Stone.
So, as both a species and a culture, we have developed a loosely ordered system of cooperation with rules, some written (and often codified into law) and some unwritten. There is certainly debate on the origins of these rules—some may feel that they are divinely granted, and others insist that they come solely from the human imagination. Some may be hard-wired into our brains, again, either through Divine act or through evolution, in a way that improves our ability to survive as a species.
Why I Wrote This Book
The purpose of this textbook is not to delve into these esoteric questions, but rather to convey information about the ethical concepts and fundamental ethical principles relating to nonprofit organizations. Each nonprofit organization has as its purpose some discrete mission that is intended to improve the quality of life in some way for others who may or may not have any direct affiliation with that organization. When everyone is solely seeking to fulfill their own needs at the expense of others, perhaps through trial and error, ancient man has learned that no one’s needs, or almost no one’s needs, can be satisfied. Fortunately for nonprofit organizations, being selfish is considered unethical. The nonprofit sector requires individuals who put others’ needs above their own; who volunteer; and who share their wealth, wisdom, and time. They need ethical leaders.
My Personal Interest in Nonprofit Ethics
I was never required to take an ethics course of any kind to fulfill my requirements for my undergraduate science program, or in my Master’s or Ph.D. programs in public administration. And I never elected to take an ethics or ethics-related course during my academic career.
My first professional job after college was working for a U.S. Congressman, a man who was a “man of the cloth.” He was a Methodist minister who arrived in Washington with a mission to stop the Vietnam War, beginning a 12-year stint in the U.S. House of Representatives with an implausible election victory that was directly attributable to the Watergate scandal. There was a perception by voters in his Congressional district that the local political machine was corrupt. The topic of ethics was high on the agenda then, and with good reason. In those days, members of Congress, even with safe districts, could (and did) raise hundreds of thousands of dollars in campaign contributions from special interest lobbyists, put the contributions into an account, and then, when they retired, legally put the money into their personal accounts! Only a scant few years before, female employees were at high risk of being considered a part of the personal harem of the member of Congress for whom they worked. It was not unusual (and perhaps this is still true) for members of Congress to use their staffs for personal tasks. Members of Congress thought nothing was wrong with trading their vote for campaign contributions, or for “earmarks” that would fund projects in their districts and help them with re-election efforts.
I came to understand that my employer’s ethical behavior with respect to his “politics” was mirrored by his ethical behavior toward everything else. I remember that he would circulate the office telephone bill to all staff. Attached would be his personal check in the amount of the cost of all of the personal calls he had made from the office telephone line, with calls on the bill marked in yellow highlighter. He refused to be a bystander to injustice, and he was a persistent voice for those who did not have a voice in the halls of power—the aged, the poor, the sick, the marginalized. His ethical example influenced me, as well as others who worked with him, for many years afterwards.
After obtaining my Master’s degree, I was hired as the executive director of a statewide Jewish advocacy organization. It was a 501(c)(4) tax-exempt nonprofit organization and the first nonprofit to employ me after seven years serving in government and the for-profit sector. I remained the executive director for 13 years. One of my projects was developing a Holocaust education guide for teachers, which was funded by a grant from the Pennsylvania Department of Education. It was during that project that I became intimately exposed to the history of how an entire society (with minimal pockets of heroic exceptions) participated with zeal in perhaps the most heinous, unethical behavior in the history of mankind. Millions participated in genocide, or applauded it. Others looked away unmoved. Germany was, at the time, perhaps the most technologically advanced culture on the planet. How could this have happened?
Yehuda Bauer’s short summary of the lessons of the Holocaust influenced me: Don’t be a perpetrator. Don’t be a victim. Don’t be a bystander. Also influencing me was an oft-quoted speech by Martin Niemöller, an Anti-Nazi Lutheran pastor who had been imprisoned in the Dachau concentration camp. He summed up the consequences of being a bystander in the face of injustice (note: this is one of several versions of this quote):
First they came for the socialists, and I didn’t speak out because I wasn’t a socialist.
Then they came for the trade unionists, and I didn’t speak out because I wasn’t a trade unionist.
Then they came for the Jews, and I didn’t speak out because I wasn’t a Jew.
Then they came for me, and there was no one left to speak for me.2
I placed this quote prominently on the back cover of The Holocaust: A Guide for Teachers. In 1994, this book became one of the first to appear on the Internet for free in full text and still may be found at: http://www.remember.org/guide
Years later, I found myself defending my doctoral dissertation. By some strange turn of events, my original dissertation chair had gone on sabbatical, and he had turned me over to the faculty member who taught ethics. After nine months of futile effort trying to satisfy my first chair, I decided to start from scratch with a new dissertation topic and chose to write about ethics codes of particular nonprofit organizations, those that are associations. It was at this point that I became exposed to ethics theory and practice relating to the nonprofit sector. This journey was not without its trials and frustrations. One I remember vividly was standing before my committee defending my dissertation, and feeling that I was “in the zone.” There was nothing they could ask for which I was unprepared. Then, my chair asked me this question: If you were asked to put together a syllabus for an ethics course, what would be in it?
My mind went blank. I mumbled something, likely incoherent. But I survived.
Interestingly enough, several years later, I received a call from a university asking me to do just that—put together a syllabus for a nonprofit ethics course and teach it.
As I write this, President Barack Obama is in his second term in office. In his second inaugural address, he said:
We, the people, declare today that the most evident of truths—that all of us are created equal—is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall...
As I re-read his words, I can’t help noticing that much of what he said that day relates to ethics.
He talked about our behavior toward certain demographic populations. He emphasized the benefits we all accrue when everyone can participate in pursuing the American dream rather than being marginalized, as women, minorities, and gays have been for centuries. He talked about how we treat our old and infirm. He talked about “fair” rules with respect to the free market, obligations to future generations, preservation of the environment. Martin Luther King once said, a person “will not be judged by the color of their skin, but by the content of their character.” The president, himself, is a success story of what can be achieved by creating a level playing field where everyone has the opportunity to achieve greatness.
I am a graduate of some of the “best” educational institutions, with the highest level of educational attainment. Yet, as I have shared above, I never had an ethics course. This just doesn’t make any sense!
Nonprofit Ethics in the News
Nonprofit ethics cases can regularly be found in newspaper headlines. In 2012, some of my classroom ethics discussion, including written assignments, focused on a major scandal involving Penn State University and a loosely affiliated charity, the Second Mile. This charity was founded by Penn State football assistant coach Jerry Sandusky, now serving a long prison term for his conviction on child sex-abuse charges. This scandal evolved into one of the top general news stories of the year3, resulting in the Second Mile charity having to liquidate and forcing the firing of a university’s president and its revered football coach. It severely tarnished the reputation of a highly respected institution. William Aramony of United Way, John Bennett, Jr. of The New Era Foundation, and Bernie Madoff of Bernard L. Madoff Investment Securities, might be charter members of any Nonprofit Hall of Shame. It would be naïve to think that such a mythical shrine would have any difficulty finding new members to induct each year.
Each term, I start off with a short written assignment, requiring my students to review their local newspapers and analyze articles that relate to ethics in the nonprofit sector. My students often submit stories of trusted employees caught embezzling funds from their organizations or using organizational credit cards to pay for personal expenses. There are stories of nepotism, conflicts of interest, and raising funds for purposes other than accomplishing an organization’s mission.
Some recent national news stories involved nonprofit organizations in ethical lapses that were more complex than these topics.
In November 2012, the Lance Armstrong Foundation severed its ties with its organization’s founder and chief spokesperson, Lance Armstrong, and changed its name to the Livestrong Foundation. Armstrong was forced out as Chairman of the board of directors a month prior to that. In mid-January 2013, Armstrong publicly admitted his involvement in the much-publicized bike doping scandal and lying about it under oath. Expecting a strong decline to its fundraising attributable to the scandal, despite its courageous action to sever all ties with its founder, the charity reduced its spending budget by more than 10%.4
In June 2013, CNN reported on a major investigation into how funds raised by some major charities were being diverted for purposes other than the organization’s mission.5
Also that month, one of the most respected charities, Susan G. Komen for the Cure, formerly known as the Susan G. Komen Breast Cancer Foundation, decided to scale back one major fundraiser, a 3-day, 60-mile walk in seven major cities, because of a 37% decline in participation. Much of this decline was attributed to charges that the organization, founded in 1982, bowed to political pressure from pro-life advocates from within and outside the organization and withdrew its funding for Planned Parenthood in January 2012. After enduring a strident backlash for this, the organization restored its funding after four days of heated controversy. But not until several organization officials, including the CEO, were ousted from leadership positions.
Also during 2012-2013, there was one other salient story of questionable ethics involving a nonprofit organization, or as some might characterize Penn State University, a government-nonprofit hybrid.
Graham Spanier, president of Penn State University during the Jerry Sandusky child sex-abuse scandal, was fired by the board of directors back in 2012. At the time of his firing, he was earning a reported $700,000 annually, not including benefits. He was charged with several crimes, including endangering the welfare of children, perjury, and obstruction of justice. At a preliminary hearing in July 2013, a judge cleared the way for a trial on these charges.
Spanier’s alleged inaction against the since convicted perpetrator not only caused pain and suffering to scores of victims, but ruined the reputation of the university, not to mention requiring payments of tens of millions of dollars in fines and likely multi-million dollar settlement payments to victims. Yet newspapers reported that he was provided with a golden parachute worth more than $3 million.6
Perhaps if some of these nonprofit leaders had been required to take an ethics course or training of some kind, we would be reading more positive stories in the newspapers about the nonprofit sector.
Nonprofit Ethics Scenarios
In my classes, there is often spirited debate about various behaviors, and whether they might be “ethical” or “unethical.” I have capsulized some of these behaviors in 120 short vignettes that are included in this book. There is not always a consensus about the answer to this question, and many of these situations are purposely ambiguous. I point out to my students that it is often easy to justify a particular behavior, depending on which ethical approach one uses. Even more interesting, many behaviors can be justified or condemned, using either of the two major ethical approaches, the deontological approach (based on principles without regard to consequences of any behavior) and the teleological approach (based on the consequences of the behavior). I provide more details about this in the Introduction to Ethics chapter.
Complicating one’s analysis of whether behavior might be unethical is the difficulty of distinguishing between ethical violations that are trivial, and those that become more worthy of scrutiny because of the matter of scale. For example, no one is likely to be fired summarily for committing the unethical transgression of making a single copy on the organization’s copy machine, although most of us would agree that doing this is not ethical. When a nonprofit organization employee puts an advertisement in the paper offering to make copies for the public and collects money for this, and uses the organization’s copy machine to make thousands of copies for this purpose, hardly anyone would dispute that this would be unethical (and criminal) behavior. What is problematic is where the line gets drawn between so-called “de minimus” violations that might be appropriately overlooked and those that should be sanctioned to one degree or another. Each year, I pose a discussion question along the lines of this dilemma, and my students are often passionate—and often disagree—about what they feel is worthy of being punished and what might not.
All of the scenarios included in this book are fictional, although some are based on actual cases that I have experienced either firsthand or secondhand. Many that have their origins in actual events have been exaggerated beyond recognition. All have been disguised beyond recognition. Almost all of these scenarios, whether they occurred or not, could have plausibly occurred in a nonprofit organization. I believe that a discussion of these scenarios will improve the ability of our future nonprofit leadership to navigate through many common ethical challenges they could face in the future.
Conclusion
I believe that ethics is the most important element of human behavior we can teach our young children, our college-age population, our future professionals and leaders, and our teachers and professors. We can teach the theory. But as I tell my students, we need to communicate our ethics and values by our actions. My intent is that this book will provide a vehicle for students to discuss ethical values that are important to those who will be leading nonprofit organizations. For many of the scenarios included in this book, there is no clear right or wrong answer. And as students consider some of these, I hope they will better appreciate the difficulty of making decisions in the turbulent environment of the nonprofit world, with so many challenges it faces.
Gary M. Grobman
January 2014
Acknowledgments
Thanks are due to many individuals who inspired me to focus part of my professional life on ethics, including my dissertation adviser, Jeremy Plant, of Penn State University, and my teaching colleagues at Gratz College, Bay Path University, Marylhurst University. I would like to acknowledge the contributions made to this book, both directly and indirectly by many of my students and colleagues. Many of them have read and commented on the material in this textbook that first appeared in other books of mine, such as The Nonprofit Handbook, Introduction to the Nonprofit Sector, and The Nonprofit Management Casebook.
Gerald Kauffman, a nonprofit consultant from Philadelphia, made many contributions to the material in Chapter 1. I am also grateful for the comments I received from reviewers of the cases that appear in this textbook, including Dr. Salvadore Alaimo of Grand Valley State University; Dr. Paul Grovikar of Northern Ohio University; Dr. Peter Dobkin Hall of the Hauser Center for Nonprofit Organizations at Harvard University and the City University of New York (CUNY); Dr. Leigh Hersey of the University of Memphis; Margery Saunders of SUNY Brockport; Alonzo Villerreal, Jr., of Transformational Strategies; and Dr. Kerri Mollard of Ohio Dominican University.
Thanks are due to Thomas Horn, the author of Is It Ethical? 101 Ethical Scenarios in Everyday Social Work Practice, also published by White Hat Communications, who used the format of short ethical scenarios that I’ve adopted in this book.
I also am grateful to my wife, Linda, who made many editorial suggestions to this textbook, and was a sounding board throughout its entire development, and to John Hope and Barbara Blank, who proofread much of this material when it was first published in other books.