ARNOVA
 

Independent Sector Releases Model Code of Ethics for Nonprofits and Foundations

Independent Sector (IS) adopted a Statement of Values and Code of Ethics for Nonprofit and Philanthropic Organizations and released it as a model for use by nonprofit organizations and foundations nationwide.

IS strongly recommends that all nonprofits and foundations have a code of ethics and provides this model, available at http://www.IndependentSector.org, as a tool to help them develop a code or review an existing one.

“Donors, members of the public, and lawmakers are all taking a closer look at how the sector does its work,” said Diana Aviv, president and CEO, Independent Sector. “We want to be sure that what they see meets the highest possible standards of ethical practice. Toward that end, we strongly urge all nonprofits and foundations to adopt a code of ethics to guide their governance and operations. The process of developing such a code by the board and staff helps to infuse into the culture of the organization a recognition of how important it is to address issues of values and ethics on an ongoing basis.”

For organizations that have already adopted a code of ethics, IS encourages them to work with their boards and staff (and particularly new board members and staff) to review their codes and ensure that they have a process in place that ensures adherence to the code.

For organizations without a code of ethics, IS recommends they initiate discussions with their boards on the importance of a code and consider adoption or adaptation of the IS Code of Ethics model to fit their organization’s mission and structure.

“Adopting a code is a first step in the right direction of ensuring that it becomes part of an organization’s culture,” said John Seffrin, chair of the Independent Sector Board of Directors and CEO of the American Cancer Society. “But it cannot end there. In the end, the organization will be judged not only by its code and commitments but by its conduct and practice.”

The statement identifies a set of values to which nonprofits may subscribe including commitment to the public good, accountability to the public, and commitment beyond the law. It also outlines broad ethical principles in the following ten areas: personal and professional integrity, mission, governance, legal compliance, responsible stewardship, openness and disclosure, program evaluation, inclusiveness and diversity, and fundraising. For example, under the responsible stewardship category, the Code of Ethics states that organizations should manage their funds responsibly and prudently and calls for adequate funding of administrative expenses to ensure good management and accountability.

The release of the Statement of Values and Code of Ethics is the culmination of a four-month review by IS member organizations and was approved by the IS Board of Directors at its meeting on January 29, 2004. The code is intended for use by both nonprofits that raise funds and grantmaking foundations.

The Statement of Values and Code of Ethics for Nonprofit and Philanthropic Organizations was drafted in the fall of 2003 by a special taskforce of Independent Sector’s Ethics and Accountability Committee, chaired by Cass Wheeler, president and CEO, the American Heart Association. Other members include: Ed Able, president and CEO, the American Association of Museums; Angela Glover Blackwell, president, PolicyLink; J. Bryan Hehir, president, Catholic Charities Archdiocese of Boston; Graham Phaup, executive director, Institute for Global Ethics; and, Art Taylor, president and CEO, BBB Wise Giving Alliance. Bill Trueheart, president and CEO, the Pittsburgh Foundation, chairs the Ethics and Accountability Committee and also served on the taskforce.

In the coming months, Independent Sector will provide additional resources to assist organizations in developing, implementing, and reviewing a code of ethics. In addition, the IS Ethics and Accountability Committee will continue to review and revise the IS model as necessary.

Independent Sector’s work in the area of ethics and accountability is funded by the generous support of the GE Foundation, other donors, and IS members.

The Statement of Values and Code of Ethics for Nonprofit and Philanthropic Organizations is available free of charge at http://www.IndependentSector.org/members/code_main.html.