You know, ethics in our nonprofit work (and – let’s face it – in everyone’s work) is a really important thing. We all know that.

We all know ignoring the rules to accept a timeshare to help out a donor might put something on the books, but that something will be a liability sooner rather than later.

Accepting a transformational gift from a donor whose affiliations and financial background you haven’t researched could just end up causing you a world of trouble.

How many stories have you read recently where nonprofits have had to deal with taking a name off a wall or deal with a lawsuit or public relations nightmare because of the tainted nature of a donor who gave a gift?

Sometimes you can’t see it coming – nobody knew Enron was going to become the eponymous term for corporate malfeasance before it was. It’s looking increasingly like many nonprofit boards will be having difficult decisions in the weeks ahead what to do (if anything) about gifts from the Sackler family. Were there any red flags raised?

Other times, it’s hard to see how a nonprofit board and senior staff didn’t see the red flags and flashing lights blaring about a prospective donor. Or ignored them willfully, despite clear warnings from staff, including prospect researchers.

Your board and leadership don’t want to be caught on the back foot

It’s not enough to just have someone research the prospective donors, either. You have to be prepared to listen to what the research says. What the researcher says. That’s why you employ them to begin with – to help you identify great donors and prevent you from entering into relationships with people and companies that could do your organization’s reputation harm.

(That’s why it’s important for prospect development professionals to document conversations when they’ve warned leadership not to proceed with specific asks, too.)

Right now the world around us is aswirl in a political and social maelstrom, and ethics are at the eye of the storm. Between the seemingly daily admissions from Facebook of purposeful data-sharing, and felony indictments/convictions involving senior members of our government, we’re impacted by people who have made bad ethical choices.

I have to assume that Facebook has a written ethics policy statement that people just chose to ignore. I know that the federal government has multiple ethics guidelines (and whole departments) dedicated to that purpose. They just weren’t followed; the experts weren’t heeded.

So I have to ask, does your organization have a written ethics policy? What about a written gift acceptance policy? More importantly, are they followed?

If you don’t have a gift acceptance policy, there’s no better time than now to write one. Here’s a guide from the Institute of Fundraising called “Acceptance, Refusal and Return: a practical guide to dealing with donations” that I know you’ll find useful. Although British privacy laws are slightly different than ours – we are catching up, though – British nonprofits have been serious about due diligence research for a very long time and their policies and procedures are worthy of study and emulation.

One of the things that I’ve heard most of my life in nonprofit work is that we need to operate more like businesses. Bottom line efficiency, use technology wisely, all of that. But honestly one of the things I’ve loved most of my life in nonprofit work is how ethical most of the people I’ve worked with have been – it’s one of our sector’s best assets. I think business (and the government, quite frankly) has a lot to learn from us.

It’s hard to prove when preventive brake-pulling has saved an institution, because those stories never make the news. But it’s pretty easy to tell when an organization doesn’t use due diligence research, have ethics or gift acceptance policies, or when they chose to ignore them, because those stories never, ever, go away.

For further reading/information

• Blackbaud white paper: Why you Need Gift Acceptance Policies by Katherine Swank, JD.
• The University of Manchester’s actual Gift Acceptance Policy.
• Bloomerang blog op-ed, “Why You Might Need to Revisit Your Gift Acceptance Policy” by Mazarine Treyz