Chapter 1 of "Ethics in Nonprofit Organizations"
Chapter 1
Introduction to Ethics
Note: This chapter is adapted from Chapter 7 of the third edition of Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century
Ethics is a branch of philosophy that refers to “well-based standards of right and wrong that prescribe what humans ought to do, usually in terms of duties, principles, specific virtues, or benefits to society” (Johnson, 2007, p.10). The origin of the word, ethicos, is Greek for habit, or customs relating to morals (Guttman, 2006).
Classical Ethical Thought
Humans have wrestled with basic existential questions for as long as they have been able to pose questions: Does God exist? How did I get here and why? What is the meaning and ultimate purpose of life? What happens after I die? Who or what is watching me and judging me? What constitutes a life well-lived? What are the consequences for a life well-lived or one that is not? Does it matter if I act one way when no one is looking and another way when I am being observed?
How one should behave, and why, is one such question that has generated attention by the greatest thinkers of both ancient and modern civilizations.
The Golden Rule, “treat others as you would have them treat you,” has evolved in many cultures, and is a basic ethical principle that has its origins in the earliest of writings (Wattles, 1996). Ancient religious writings, such as the Torah, are replete with both Jewish history and hundreds of commandments to follow (exactly 613, according to Jewish tradition), most of which relate directly to ethical behavior toward not only other human beings but animals, as well. Scholars suggest that this document first appeared around 1445 B.C.E. (Slick, n.d.).
“Do not seek revenge or bear a grudge against anyone among your people, but love your neighbor as yourself” appears in Leviticus 19:18 and “So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets” in Matthew 7:12. “None of you has faith until he loves for his brother or his neighbor what he loves for himself” [Sahih Muslim, Book 1, Number 72] is a passage from the Quran. And, according to the Buddha, (Dhp.130), “All tremble at punishment. Life is dear to all. Put yourself in the place of others and harm none nor have them harmed” (Dhammika, n.d.).
Ancient Greek philosophers were writing about ethical issues even before writing about philosophical issues. Much of our Western ethical tradition can be traced to Socrates (469-399 B.C.E.). In The Republic, written about 380 B.C.E. by Plato, one of his students (Socrates) was described as living an extreme moral life. Aristotle (384-322 B.C.E.), a student of Plato, wrote books about ethics—Nicomachean Ethics, Eudemian Ethics, and Magna Moralia, all of which were influenced by both Socrates and Plato. All three of these books have survived and influenced ethical thought throughout modern history. Virtue ethics is often traced to the writings of Aristotle, who believed that happiness or well-being resulted from having a virtuous character. Among these virtues are prudence, justice, courage, and self-restraint (Johnson, 2005).
Two related approaches to ethics also came out of the ancient Greek tradition.
Stoicism, traced to the Greek philosopher Zeno of Citium (333-264 B.C.E.), espoused that living a moral life means avoiding moral judgment and extreme behaviors, such as addictions. The Stoics believed in diminishing the influences of the external world and avoiding the pursuit of worldly pleasures, to achieve serenity of the soul, and to live in harmony with the environment, accepting death as neither avoidable nor frightening (Guttman, 2006). Among the best known Stoics was Seneca (4 B.C.E.-65 A.D.), who lived in Rome and killed himself upon the command of Nero, the Roman Emperor at the time. The Stoics thought that reason was the greatest good that would bring them joy rather than actual pleasure, even if personal pain came from seeking this reason.
Epicurus (341 B.C.E--271 B.C.E.) taught that the greatest good was pleasure and freedom from pain. The Epicureans emphasized the quiet enjoyment of pleasures, especially mental pleasure, free of fear and anxiety. The Epicurians were the first to express the belief that all people everywhere were equal, and that the basic goal of everyone is to seek and obtain joy (Guttman, 2006).
Certainly, writing about ethics and virtues was not restricted to Western culture. In China, Confucius (551-479 B.C.E.), decades before these ancient Greeks, had shared ethical lessons that were later written down by his followers, and that in many ways have some parallels to the virtue approach of Aristotle. He espoused the concept of ren, compassion for others, which was demonstrated by a form of the Golden Rule, “What you do not wish for yourself, do not do to others,” documented in the Lunyu, the ancient text of his teachings (Riegel, 2013).
In the Middle Ages, writers from the religious traditions made major contributions to the literature that influenced modern ethical thought. Thomas Aquinas (1225-1274 ) was a Dominican friar and priest who developed natural law theory, which “good is to be done and pursued, and bad avoided” (Finnis, 2011). He is credited with adding faith, hope, and love to the four Aristotlean virtues. Other virtues have since been added, including empathy, compassion, generosity, hospitality, modesty, and civility (Johnson, 2005), but Aquinas’ contribution was a major new paradigm influencing not only Catholics, but those outside of that faith community, and he was honored with Sainthood 50 years after his death.
Maimonides (1135-1204), in his 14-volume Mishneh Torah, interpreted the Torah to “provide a framework of guidelines for living a life satisfactory to God” (Guttman, 2006, p. 20). Five centuries later, the Dutch-Jewish philosopher Spinoza (1632-1677 ) wrote The Ethics, which could be viewed as placing the Aristotlean virtues in a non-secular context, and which had a major influence on the Reform Jewish movement (Guttman, 2006).
German philosopher Immanuel Kant (1724-1804) advanced the proposition that all of us should do what is ethically right regardless of the consequences—the “categorical imperative.” He said that we have an obligation to follow universal truths, such as behaving so that we don’t lie, cheat, or murder, even if doing so may appear have some benefit (Johnson, 2005).
In 19th century Britain, the writings of Jeremy Bentham (1748-1832) and John Stuart Mill 1806-1873) advanced utilitarianism, an ethical approach that judges the morality of a behavior on its consequences of bringing the most utility to the most people.
Approaches to Ethics
Various approaches to ethics exist. A typology was provided by Dr. Leslie Leip at her presentation at the 2000 Annual Meeting of the American Society for Public Administration (Leip, 2000). Noting that these are not completely inclusive of approaches and that there are subapproaches within them, her list included, among others:
1. Utilitarian approach (the most good for the most people)
2. Virtue approach (a focus on personal character)
3. Divine approach (What “God” commands)
4. Ethics of care approach (from the feminist literature)
5. Ethical egoism approach (based on “what’s good for me”)
6. Communitarianism approach (based on “what’s good for the community”)
7. Pluralism (a combination of the above, depending on the situation).
Each of these approaches has a distinct frame of reference, although there are common origins to many of them. Among the more general approaches found in the ethics literature are:
Teleological Approach
In shorthand, this approach has been labeled “the ends justify the means” (Fox, 1994). The overarching principle is that decision-making should be governed by creating the most good and the least evil. What matters most are the results that come about once the decision is made, not whether any high moral principles are served. The utilitarian approach is an offshoot of teleological ethics.
Deontological Approach
This approach suggests that there are higher-order principles that are immutable because either “God said so” or because of the equivalent in a secular context. People following this approach will tell the truth even when considerable serious consequences to the individual or society would result by doing so. For example, a person who believes that not lying is a principle that must be upheld at any cost may well refuse to tell a lie even when telling the truth might threaten his or her personal safety.
Utilitarian approach
A derivative of the teleological approach, the utilitarian approach involves measuring and calculating the relative benefits to all members of a group of each act or behavior, and then choosing the act or behavior that creates the greatest good for the aggregate (Pops, 1994). Three types of utilitarianism—act utilitarianism, general utilitarianism, and rule utilitarianism—have been identified.
Act utilitarianism considers the single action of the individual as the level of analysis, and judges what the consequences to society would be if only that individual performed that single act only once. General utilitarianism expands that concept to judge what the effect on society would be in the aggregate if everyone acted the same way in a particular case. Rule utilitarianism suggests an ethical rule that would likely have the most benefit to society if everyone followed it, even though any single, individual application of the rule might have some negative results to the group occasionally. What binds all three of these types together is the notion that the consequences of following this philosophy are most important, and that, in the aggregate, the act is ethical if society would be better off.
This approach has several shortcomings, according to critics. First, the definition of “society” can change. It isn’t clear whether the greatest good refers to one’s community, one’s state, one’s nation, one’s species, or one’s biosphere. Second, it isn’t always easy to measure and make calculations as to the benefit. Third, this approach can trample basic values that many utilitarianists might still value, such as justice, fairness, and social equity. For example, it may be consistent with utilitarian values to put an innocent man to death if doing so would result in deterring the murder of hundreds of others, a concept that would be anathema to an adherent of liberal ethics (see page 17).
Classic, market-based economic theories such as transaction cost theory first articulated by Ronald Coase but now associated with Oliver Williamson (Pessali & Fernandez, 1999) and public choice theory (Buchanan & Tullock, 1965), have found their way into the public administration realm. These have their roots in utilitarianism. Many of the principles of New Public Management are also consistent with a utilitarian approach to administration, in that they stress efficiency and “most bang for the buck,” rather than being sensitive to individual justice and democratic citizenship values (Grobman, 2011). Proponents of public choice theory contend that it is the job of government to do the measurement and calculations and then make public policy decisions based on this calculation. “Efficiency is clearly the preeminent normative force in this baseline view” (Harmon & Mayer, 1986, p. 114). This is a direct utilitarian approach.
Virtue ethics
This approach was first advanced in the public administration context by George Frederickson and David Hart. Much of the academic literature during the previous decade focused on resolving ethical dilemmas. Virtue ethics shifts the focus toward the personal character of the decision-maker, suggesting that there is a distinct character trait, which they call “benevolence,” defined as “the extensive and non-instrumental love of others.” (Cooper, 1994, p. 547).
This theme was picked up by Edmund L. Pincoffs in his 1986 book, Quandaries and Virtues. The basic idea of this approach is that if a public administrator has the “right” character, he or she will not require a written code of ethics or a set of principles that describe the appropriate behavior.
In The Six Pillars of Character (Josephson Institute, 2002), some of these virtues are described. Among them are trustworthiness (honesty, integrity, promise-keeping, loyalty), respect (autonomy, privacy, dignity, courtesy, tolerance, acceptance), responsibility (accountability, pursuit of excellence), caring (compassion, consideration, giving, sharing, kindness, loving), justice and fairness (procedural fairness, impartiality, consistency, equity, equality, due process), and civic virtue and citizenship (law abiding, community service, protection of the environment).
One major difference that distinguishes virtue ethics from other approaches is that it suggests that government does much more than serve as the marketplace for reaching a majority consensus.
In the nonprofit world, virtue ethics is often what brings people to the table to do the work that they believe government should be doing but is not. Modern writers in the nonprofit management field, such as Drucker (1990), Covey (1997), and Wheatley (1994), have recognized that the personal traits of the nonprofit leader with respect to ethical culture create the climate that bonds the organizational members to a common purpose.
According to Van Hook (1998), the primary role of a nonprofit executive is to set an ethical tone for the organization in its internal and external relationships.
John Carver, whose book Boards That Make a Difference proposes a model of governance in nonprofit organizations that is becoming increasingly attractive (despite being controversial), suggests that the board give the executive director a virtual free hand in achieving its desired outcomes. However, the one area in which the board is permitted to micromanage the executive director under the Carver model is in the area of ethics, in which constraints are explicitly put down in writing and are inviolate (Carver, 1990).
Of course, what is “virtuous” to one nonprofit executive can be unethical to another. Being loyal to the organization is virtuous, and so is whistleblowing. An ethical dilemma often occurs when these two principles conflict. At times, it may be difficult to choose to “do the right thing” when it is impossible to honor both principles. See page 27 for more about ethical dilemmas.
Liberal Ethics
This approach is based on the view that the rights of individuals override the needs of groups and societies. For example, there is currently a public policy debate in state governments concerning whether some innocent inmates on death row are being executed. To those who adhere to the liberal ethical framework and otherwise could support the principle of having the death penalty as an available punishment (of course, many individuals do not support the death penalty regardless of someone’s guilt or innocence), executing a single innocent person out of the hundreds executed who are guilty invalidates the death penalty as an appropriate sanction. A traditional teleological approach would argue that it is virtually impossible to eliminate the execution of one innocent person out of hundreds, and that society is best served in the aggregate by having hundreds of those guilty of first-degree murder executed—with the deterrent effect that this policy ostensibly provides—even if one innocent person happens to fall through the cracks and is executed. The liberal ethics approach emphasizes individual autonomy and a right to privacy. The “don’t ask-don’t tell” approach derives from a liberal ethics perspective (Hinman, 2003).
Ethics in Organizations
Although writing on the broad topic of ethical behavior is generally attributed to Plato and Aristotle, the first writing on business ethics per se is traced to Cicero, who wrote On Duties (McNamara, 2000). Cicero is considered “one of the great authorities on the necessity of virtue for the good of society” (Hart, 1994).
Once thought to have little relevance to the bottom line in organizations, some of the more recent management strategies, such as TQM and diversity training, are being seen as giving ethical training practical relevance (McNamara, 2000).
Madsen and Shafritz (1990, in McNamara, 2000) divide ethical problems of organizations into two principal types. “Managerial mischief” consists of behavior that reasonable people would recognize as “wrong,” such as illegal, unethical, or questionable practices that perhaps can be distinguished from the other type by the lengths to which the perpetrator of the behavior will go in order not to be caught. The other type, “moral mazes,” encompasses issues such as potential conflicts of interest, wrongful uses of resources, mismanagement of contracts, and other behaviors with which managers deal on a daily basis.
A description of highly ethical organizations is provided by Pastin (1986):
1. They are at ease interacting with diverse internal and external stakeholder groups. The ground rules of these firms make the good of these stakeholder groups part of the organizations’ own good.
2. They are obsessed with fairness. Their ground rules emphasize that the other persons’ interests count as much as their own.
3. Responsibility is individual rather than collective, with individuals assuming personal responsibility for the actions of these organizations. The organizations’ ground rules mandate that individuals are responsible to themselves.
4. They see their activities in terms of purpose—a way of operating that members of these organizations highly value. Purpose ties the organizations to their environments (in McNamara, 2000).
Doug Wallace (in McNamara, 2000) asserts that a high integrity organization has the following characteristics:
1. A clear vision and picture of integrity exist throughout the organization.
2. Over time, the vision is owned and embodied by top management.
3. The reward system is aligned with the vision of integrity.
4. Policies and practices of the organization are aligned with the vision; there are no mixed messages.
5. It is understood that every significant management decision has ethical value dimensions.
6. Everyone is expected to work through conflicting-stakeholder value perspectives (McNamara, 2000).
Codes of Ethics
A code of ethics is a systematic effort to define acceptable conduct (Plant, 1994).Ethical behavior in the workplace is enforced through the use of codes of ethics, codes of conduct, ethicists, ethics committees, policies and procedures relating to ethical dilemmas, and ethics training (McNamara, 2000).
Codes of ethics may be general or specific, aspirational or idealistic, coercive or legalistic, and apply to members of a profession, an organization, or an association representing a class of organizations (Plant, 1994). Codes of ethics may be a simple list of ten golden rules (Plant, 1994) or a lengthy, codified system of procedures and ideals such as the one adopted by the National Association of Social Workers (National Association of Social Workers, 1999). It may have the force of law (such as a statutory ethics code for public officials), be a collection of principles that are not law but are morally binding, or simply provide a system of symbolic principles for meaningful communication (Plant, 1994).
Codes of Ethics for public officials are fundamentally different from codes for nonprofit organizations (Plant, 1994), and codes for nonprofit organizations differ equally from those for government officials or private business persons. Yet they share many elements.
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