Code of Ethics for Not for Profits

The US organisation INDEPENDENT SECTOR has released a Statement of Values and Code of Ethics for Nonprofit and Philanthropic Organisations that translates well to the Australian scene.

IS strongly recommends that all Not for Profits and foundations have a code of ethics and provides this model as a tool to help them develop a code or review an existing one.

Diana Aviv, president and CEO, INDEPENDENT SECTOR says donors, members of the public and lawmakers are all taking a closer look at how the sector does its work.

Aviv says Not for Profits and foundations should 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 organisation a recognition of how important it is to address issues of values and ethics on an ongoing basis.

For organisations 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 organisations 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 organisation’s mission and structure.

John Seffrin, chair of the INDEPENDENT SECTOR Board of Directors and CEO of the American Cancer Society says adopting a code is a first step in the right direction of ensuring that it becomes part of an organisation’s culture.

But he says it cannot end there. In the end the organisation will be judged not only by its code and commitments but by its conduct and practice.

IS says 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 organisations 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 organisations and was approved by the IS Board of Directors at its meeting on January 29, 2004. The code is intended for use by both Mot for Profits that raise funds and grantmaking foundations.

INDEPENDENT SECTOR is a Not for Profit, non-partisan coalition of more than 700 US organisations, foundations, and corporate philanthropy programs. Its mission is to promote, strengthen, and advance the NFP and philanthropic community to foster private initiative for the public good.