April 17, 2008 | Read Time: 2 minutes
Two new studies suggest that unethical fund-raising and management practices have marred operations at many nonprofit groups.
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Fifty-five percent of nonprofit employees observed one or more acts of misconduct in the previous year, according to the Ethics Resource Center, in Washington. That is the highest share of employees who say they have witnessed bad behavior since the center began measuring perceptions of nonprofit conduct in 2000.
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More than half of nonprofit executives said they have observed unethical fund-raising practices, according to a study conducted by the Giving Institute, a Glenview, Ill., organization for fund-raising consulting firms. The most common infraction they said they had seen: fund raisers who accept commissions as payment for bringing in contributions.
In the study by the Ethics Resource Center, 24 percent of nonprofit employees observed their co-workers putting their own interests above those of the organization.
Twenty-one percent observed managers or executives lying to employees. Nearly one in five employees — 19 percent — reported that they had seen abusive behavior or that they had seen co-workers misreporting the number of hours they had worked.
The frequency of these behaviors mirrors the frequency reported in the for-profit and government arenas, the study found.
The survey is based on interviews with 558 nonprofit employees and was conducted so it could be compared with similar surveys of corporate and government employees.
Those interviews suggest many nonprofit organizations are less stringent in maintaining their ethical standards than they have been in the past.
The study found that 19 percent of nonprofit employees believe that their organizations have become less ethical in the past five years. By comparison, only 7 percent of those who work for businesses and 11 percent of those who work in government agreed with this perception.
Patricia Harned, president of the Ethics Resource Center, said the findings by her organization suggest the nonprofit world needs to take action to preserve public confidence — and the confidence of its employees.
“With misconduct on the rise, the nonprofit community needs to mobilize,” she said.
“Strong ethical cultures need to be reinforced where they’re already in place, and established in other organizations to combat the loss of confidence that we’re seeing among many nonprofit employees,” Ms. Harned added.
A free copy of the survey is available on the Ethical Resource Center’s Web site.
In the Giving Institute study, executives at 450 charities of all types were interviewed about ethics and fund raising; a majority had spent 20 years or more working for nonprofit organizations.
The commissions paid to fund raisers attracted the most attention from those executives, a practice that has long been banned by the Association of Fundraising Professionals and other organizations.
Those groups worry donors might think they have been asked to give more because the fund raiser wants to get a higher fee rather than increasing the amount that goes to charity.
