By Arianna Valeria Martínez Navarrete - International Relations student

“Doing the right thing doesn’t automatically bring success. But compromising ethics almost always leads to failure.” (Wadhwa, n.d, as cited in Global Interconnect, 2017, p.1). The success of a non-profit organization not only depends on the charity that their members do, but it also depends on some elements that help to grow the integrity, trustworthiness, and liability of the organization. Also, the proper management of resources is in charge of maximizing the projects and creating qualified staff to work with. Therefore, the best employees, best board, and a great and trusting reputation will always be in the staff, if ethics are practiced within the organization.

If the non-profit is held accountable for its activities and outcomes both inside and outside the organization, its reputation will be enhanced, and people will be less likely to question the non-profit owner's responsibility. People would see that the organization has nothing to hide if it is transparent in both directions, honesty will improve the mission and opportunities. However, why are ethics, accountability, and transparency essential in a non-profit? And, what happens if this organization can not have those elements?

“If the mission is why your organization is in business, then ethics, accountability, and transparency are the how you conduct your mission based business, or at least they should be” (Brinckerhoff, 2009, p. 55). The NPOs are involved in the process of showing society that they have a successful implementation of the income that they obtain and thus, are committed to performing the missions for which they were established. There is when transparency has become a critical issue that must be fully revealed. The issues of morality and ethics can be found at all levels of society. In the case of NPOs, ethics and integrity are the most important pillars, because the success of this depends on the donor trust. These factors are essential for the organization to grow in its values, which aid in the fulfillment of the aims proposed by them and to enhance the relationship with stakeholders, who enable the organization to function and benefit the people with its services.

NPOs are obliged to develop internal control mechanisms that allow their stakeholders to assess the destination of resources in accordance with their social mission. Transparency and good governance are necessary to achieve the social credibility which allows for the continuity of an organization and the achievement of its goals. (Ortega-Rodriguez et al, 2020, p.16)

Nevertheless, the issue of trust is related with ethical decisions but many organizations have a lack of ethics and are tempted to fall into financial abuse, and other unacceptable aspects that lose credibility of the organization. However, some of the non-profit organizations are tied to the government and can easily fall into corruption. According to Lytle (2010), the financial fraud, conflict of interest, and a general absence of a code of ethics, as well as other well-known issues like whistle-blowing, were highlighted in the literature on nonprofit ethics. Financial fraud is the most well-known problem that organizations face. Moreover, this fraud is more common in nonprofit organizations than in profit-driven businesses, according to a new survey performed by the Ethics Resource Center.
A 2008 Brookings Institution survey found that about one third of Americans reported having “not too much” or no confidence in charitable organizations, and 70 percent felt that charitable organizations waste “a great deal” or a “fair amount” of money. (Rhode & Packel, 2009, p. 5)

In conclusion, ethics, transparency, and accountability are vital for NPOs, but sometimes ethics depend on the perspective of the person who is going to take the decision. Integrity plays an important role and hand in hand with values and convictions could put at risk the trust or make the organization more trustworthy. As a solution, the NPOs need to communicate the importance of complying with the code of ethics, have an ethics committee, decrease the lack of motivation and personal development, and raise awareness in their volunteers and employees of the importance of completing the mission.

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  • Brinckerhoff, P. (2009). Mission-Based Management Leading Your Not-for-Profit in the 21st Century. ISBN 978-0-470-43207-5
  • Global Interconnect. (2017). Business Ethics’ Vital Importance to Corporate Brand.,Vivek%20Wadhwa%3B%20Wall%20Street%20Journal
  • Lytle, B. (2010). Efficacy of Codes of Ethics in Nonprofit Organizations. [Master of Liberal Studies, University of Toledo, Liberal Studies].
  • Ortega-Rodríguez, C., Licerán-Gutiérrez, A. & Moreno-Albarracín, A.L. (2020). Transparency as a Key Element in Accountability in Non-Profit Organizations: A Systematic Literature Review. Sustainability.
  • Rhode, D. & Packel, A. (2009). Ethics and Nonprofits.