Ethics Scenario #18: Prostate Cancer Education Fund

18. Steve is the new founder of the Prostate Cancer Education Fund, an organization to fund prostate cancer education. He recruits nine members from the community to serve on his foundation’s board of directors. As a condition for serving on the board, he requires each board member to lend the organization $5,000 and donate at least $2,500 each year so the organization has startup funds to hire staff, rent an office, and pay expenses relating to programming. The requirement is included explicitly in the organization’s bylaws.

a. Is the founder acting ethically?

b. Is the founder acting legally?