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Social Sector Ethics

Nonprofit Ethics

Center Advisory Boardmember Ervie Smith, Sobrato Foundation CEO Rick Williams, Center Leadership Ethics Director Ann Skeet, and Wilson Sonsini General Counsel Mark Parnes serve on a panel on "Ethical Dilemmas of Nonprofits."

Concern for others. The Markkula Center for Applied Ethics imagines a world where such concern drives all important decisions. Many nonprofit organizations, volunteers, foundations, philanthropists, consultants and advisors share this vision as an aspect of the work they do in the social sector.

The social sector is a fascinating realm.  Nonprofit organizations are complex animals by design, with a “triple bottom line”: traditional performance measures, returns to social goods, and care for the environment. Staff and volunteers are blended in management and governance roles. As Evelyn Brody writes in the Fordham Law Review, “Board members, in both business and nonprofit corporations, are part-timers, often volunteers, serving for a variety of altruistic, social, and even selfish reasons, and (for the outside directors) not likely to be technically skilled in the business of the enterprise.” Donors give money for investment and distribution, and expect transparency to match their generosity.  Philanthropists and foundations have their own goals they work to achieve within the sector.

In this complex environment, organizations with ethical cultures have the best chance to build trust and prosper long term. We enter our work in social sector ethics with the aim of helping the organizations that serve it fulfill their missions and thrive.

What is Social Sector Ethics?

There have been some headline-worthy ethical dilemmas in the social sector, from misuse of contributed funds, to “philanthrocapitalism”, to outlandish nonprofit executive pay, to flat out scams executed under the guise of social sector work. As many people are served by the sector and support the nonprofit organizations in it, when trust is lost, the impact can be significant.

Less obvious are the issues that crop up as people shift from role to role within a single nonprofit organization. Someone who might be the parent of a child in a nonprofit school might also be a volunteer; a donor may sit on the board. The sector’s complexity can make doing the right thing challenging and good choices harder to identify.

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