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Walk the talk with a code of ethics

September 17, 2013

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You and your staff know that your not-for-profit is ethical — but that doesn’t mean those outside your organization do. A formal code of ethics can help you communicate your values and assure donors and other stakeholders that your group deserves their trust and support.

From mission to code

You probably already have a mission statement that explains your values and goals. So why would you also need a code of ethics? Think of it as a statement of how you practice ideals. A code of ethics not only guides your organization’s day-to-day operations but also your employees’ and board members’ conduct.

The first step in creating a code of ethics is determining your values. Start by reviewing your strategic plan and mission statement to identify the ideals specific to your organization. Next, look at peer not-for-profits to see which values you share with them, such as: fairness and justice; commitment to the community; accountability to the public; and adherence to the law. Also consider ethical and successful behaviors in your industry. For example, if your staff must be licensed, discuss those requirements.

You may also want to include practical standards that address current issues or behaviors common to your workplace, such as cooperativeness and promptness. Although these principles aren’t ethical in nature, they’re relevant to your not-for-profit’s image.

Expectations and policies

Now you’re ready to document your expectations and the related policies for your staff and board members. The type and size of your organization will help determine the scope of your code of ethics. But most not-for-profits should address such general areas as mission, governance and legal compliance.

Also consider policies on:

•    Conflicts of interest, such as paying board members for their services,

•    Responsible stewardship of funds,

•    Openness and disclosure,

•    Inclusiveness and diversity,

•    Program evaluation, and

•    Professional integrity, including in fundraising and grantwriting.

For each topic, discuss how your not-for-profit will abide by the law, be accountable to the public and responsibly handle resources. When the code of ethics is final, your board needs to formally approve it.

Integrating your ideals

Next, it’s time to communicate and implement the code. Training employees and board members can be particularly helpful, because every not-for-profit faces issues that may result in illegal or unethical behavior. With a thorough understanding of the code, your staff and board members will find it easier to make the right decisions.

Be sure to present examples of situations that they will encounter. For example, what should an employee do if a board member exerts pressure to use his or her company as a vendor? You can integrate your ideals in your policies and procedures by addressing real-life scenarios and how your organization handled them.

Finally, if your not-for-profit doesn’t already have one, put in place a mechanism, such as a confidential tipline, that staff, board members and others can use to raise ethical concerns. If multiple complaints suggest that your not-for-profit has some serious ethical issues, create an open forum for stakeholders to discuss them without repercussions.

A continual process

Many organizations treat their codes of ethics as static documents and not the continual processes they really are. To avoid making this mistake, review and revise your code of ethics once a year. At that time, review how policies are working, discuss strategies to revise those that aren’t and ensure that your not-for-profit is following the law and acting ethically.

Nothing negates a code of ethics quicker than having upper-management’s disregard of it go unaddressed.  Set the right tone at the top by addressing the violations of the code.  If the employees don’t know that code violations have been addressed then they have not been appropriately addressed.

Your code of ethics may change considerably over time as your organization adapts to community needs and expands to include new programs and projects. To bring attention to the values and procedures the code addresses and any changes, ask your staff and board members to read and sign the code each time you revise it.
For more information on this topic, please contact Mike Borowitz at [email protected]

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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