The news is full of stories involving ethics — recently one about would-be auditors cheating on, of all things, a national ethics exam. While no one wants to be in the spotlight for bad behavior, unethical behavior can be especially damaging to the reputation of a nonprofit organization.

To deter such conduct, many nonprofit organizations create codes of ethics to formally guide employees, volunteers, and board members in their decisions. Good codes of ethics include guidance on these and other behaviors:

Professional conduct. This includes workplace behavior, interaction with vendors, clients, and partner organizations, and other behavioral expectations that foster a positive workplace. Covered topics could include safety, harassment, inclusion, and discrimination policies and should cover both in-person and online behavior, including emails and texts.

Conflicts of interest. Conflicts of interest arise when officers, employees, directors, or volunteers make decisions that interfere with their ability to do their jobs objectively or make decisions that benefit them personally. This is true for actions that might even appear to be a conflict and can range from decisions regarding contracts to office romances.

Conflicts must be disclosed and managed by removing conflicted parties from pertinent discussions and voting. Consider appointing a compliance officer to help manage potential conflicts.

Protecting organizational assets. Your organization may have trade secrets, data, patents, or proprietary processes that require protection. Your code of ethics can include rules about how to treat organizational assets, both tangible and intangible.

Confidentiality. If confidentiality is important in your work, include language about maintaining confidentiality, including data and document handling, in your code of ethics.

Codes of ethics are typically not legally binding but can be used in reviews and coaching. Work with your trusted advisors and HR leaders to create a code of ethics that works for your team, and have all new hires read and sign an agreement to abide by the code.

Contact Us

Disclaimer of Liability
Our firm provides the information in this article for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this blog are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability and fitness for a particular purpose.




Nonprofit Insights


Valuation Report