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Markkula Center for Applied Ethics

ESG Application to the Social Sector

ESG Minisite Social Sector

ESG Minisite Social Sector

Environment: For nonprofits and philanthropies that focus on climate change, sustaining the earth and animals, and environmental justice, their work may meet the highest standards under the environmental lens. However, out of the thousands of nonprofits and philanthropies in the US, those focusing on the environment are relatively few. Other organizations should identify their impact on the environment and consider changing behaviors that contribute to climate change and other negative environmental impact.

Social: Nonprofits are required to have a mission that benefits the public in order to receive their tax exempt status and thus, by definition, nonprofits generally provide more social benefits than for profit organizations.  That said, nonprofits are known for less than generous treatment of their employees with low-pay, high stress, and burnout.  Can and should nonprofits examine and change the dynamic that allows nonprofits to fight for equity in the outside world but not do the same inside their organizations?  

Governance: Good governance is critical for all organizations. How well a board functions can determine how successful an organization will be. Boards are responsible for fundamental decisions that affect the organization’s impact on environmental and social issues.  For example, how should an organization with reserves or an endowment invest their funds?  Should investments be aligned with mission or go beyond mission to address social and environmental issues?  Boards also determine executive compensation.  Should they consider the disparity between the ED’s and other employees’ compensation as part of their determination?

Jan 17, 2022
ESG Resources for Nonprofits
Golden piggy bank on a dark reflective surface.

While nonprofits may be careful to avoid investing in areas that are directly in conflict with their missions, this view has generally not broadened to ESG investing.

person in business suit pointing finger at Digitized  Covid-19  image

Nonprofit and corporate boards need to guide their organizations through the process of coming out of the current covid-19 pandemic.

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New guide offers principles, techniques, and a framework for ethical storytelling decisions

Are your social media stories aligned with your mission?

Migrant Child

What are the ethical considerations?

Tissue sample (AP Photo/Daniel Maurer).

A painful illustration of the damages wrought by unethical behavior at a nonprofit.

Tips for boards on fostering a free exchange of ideas.

Illegal immigrants in custody. (AP Photos/Uncredited) (U.S. Customs and Border Protection's Rio Grande Valley Sector via AP)

Questions for organizations involved in housing immigrant children.

Students on a college campus

How should we think about the use of student data by colleges and universities in efforts to improve student retention or academic success?

Disengaged board members fail to meet their ethical obligations to nonprofit organizations.

Boards have an ethical duty to understand and fulfill their responsibilities to a nonprofit, including rigorous financial oversight.


Good ethical design makes it easier to do the right thing.