Sample Ethics Case—Donor Privacy: Tainted Money

Ethical Dilemma:

Community Resources is a local nonprofit providing community services in California.  Carl has been the Executive Director of Community Resources for ten years. He attended an ethics workshop presented by the local AFP chapter. You are the presenter, and you provide consulting services, including ethical leadership, to nonprofits.  You are a well-known, respected professional.
After your presentation, Carl approaches you with a confidential ethical dilemma.

It is a national election year.  A recent article in the local news reported that Mr. X, known for his significant contributions to various candidates, has been found to be a fugitive having been charged with fraud and laundering money, and now living in Florida (Florida does not extradite for misdemeanor convictions committed in another state). Mr. X was named as a donor to several statewide candidates.

Bart S. is a county supervisor up for re-election and he received a donation from Mr. X.  Bart has been a long-time supporter of Community Resources. Bart S. told Carl, the ED that he was giving Mr. X’s contribution to Community Resources, as it wouldn’t look good if his constituents discovered a campaign contribution from a known felon and fugitive.

Carl took the check from Bart and asked you, the ethics consultant, for advice. You advise Carl to inform your board of directors and explain the situation. You offer to talk to the board, pro bono.

Carl met with the executive committee and extended your offer to consult at no expense. Carl calls you that evening and tells you that the executive committee decided to accept the check, but to wait a few days before depositing it, to make sure Community Resources isn’t named in the news as a recipient of the donation.  They also declined to talk to you.
 

Who’s Involved:

• Mr. X the fugitive donor
• Carl, Executive Director, Community Resources
• Bart S., county supervisor
• You, the ethics consultant

What are the possible ethical issues; who else might be impacted?

• Reputational damage to Community Resources
• Appearance of impropriety – the decision of the Executive Committee to wait for a few days before depositing the check.

What are some possible considerations or solutions?

• Does Community Resources have a gift acceptance policy they can refer to?
• Decline to accept the check from Bart S.

Related Ethical Standards:

• We earn the trust of the public for our work – and ensure its effectiveness – by adhering to the highest standards of integrity, honesty, and respect. 

Steps you can take:

• Follow up with Carl; offer to talk with the board about transparency. Nonprofits must maintain transparency with their donors, volunteers, and clients. Full disclosure allows for informed decision-making and helps maintain trust.