A Code of Ethics Sets the Stage for Decision-Making

Demonstrating commitment to ethical standards is one way your nonprofit can show that it’s worthy of the public’s trust and your donors’ gifts. Developing a code of ethics — and following it — tells your constituents that your organization lives up to its ideals.

Identifying your values

Think of your code of ethics 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 those ideals integral to your organization. Next, look at peer nonprofits 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 sector. For example, if your staff must be certified, discuss those requirements.

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

Putting ideals on paper

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 nonprofits should address such general areas as mission, governance and legal compliance.

You also may want to develop policies on openness and disclosure, inclusiveness and diversity, and responsible stewardship of funds. And consider establishing policies on conflicts of interest (such as paying board members for their services), professional integrity in such areas as fundraising and grantwriting, and program evaluation.

For each topic, discuss how your nonprofit 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.

Getting staff up to speed

Next, it’s time to communicate and implement the code. Training employees and board members is essential, because every nonprofit 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’ll 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 nonprofit doesn’t already have one, put in place a mechanism, such as a confidential tip line, that staff, board members and others can use to raise ethical concerns. If multiple complaints suggest that your nonprofit has some serious ethical issues, create an open forum for stakeholders to discuss them without repercussions.

Once your policies and procedures are in place, you may think the job is over — but it isn’t. Your code of ethics represents a continual process and you’ll need to review and revise it once a year. Regularly review how the policies are working, discuss strategies to revise those that aren’t, and ensure that your nonprofit is following the law.

Your influence counts

You can’t make ethical decisions for your employees, volunteers and board members. But you can make sure that your organization adopts a set of principles to guide them daily in their work.

© 2015