Almost every day, it seems, newspaper headlines shout out the details of another corporate scandal. Those of us in the nonprofit sector are tempted to think that we are above such shenanigans—and the accompanying headlines. We are, after all, do-gooders who are uncorrupted by the desire for profit. Our motives are so noble, how could anyone question our actions?
Unfortunately, nonprofits are run by people with the same range of ethical standards as the rest of society, and we have our share of bad apples. In recent years, the Nature Conservancy, the Red Cross, a handful of United Way chapters, and local foundations in several communities have found themselves the target of negative headlines. Such ethical lapses—or perceived ethical lapses—undermine the trust the public holds in the entire sector.
Are you thinking of becoming a member of a nonprofit board? Are you already on a board? If so, you probably hope to do a better job than the board members of so many of the corporations that were engulfed in highly publicized scandals last year. The failure of their boards to uncover wrongdoing at places like Enron, WorldCom, and Tyco made headlines around the world. Less noticed were failings in the nonprofit world. The entire board of the United Way of the National Capital Area, for example, resigned last fall amid allegations that the organization was misusing its funds. This article will give you some practical advice to help you avoid these pitfalls. Note: This article is provided for informational purposes only and is not intended to serve as legal advice.