Ethical compliance is a control environment, not a statement

The corporate sector has no monopoly on greed, and charitable status is not a control. Organizations that want ethical conduct have to examine the factors that influence it, the issues that arise specifically in charitable organizations, and the mechanisms that actually promote it.

Survey evidence over the years has consistently found that a substantial share of employees observe misconduct, and that a large portion of those who observe it do not report it — commonly because they doubt reporting will lead to corrective action, or fear retaliation. Any specific statistics cited publicly should be sourced to a current, named study rather than repeated from memory.

Start by identifying the past and potential future cost of failing to be ethically compliant. Will the organization lose funding? Could its nonprofit status be affected? Ethical violations are far easier for funders, regulators and the public to research than they once were.

Set ethical standards, policies and guidelines: a code of conduct, ethical compliance training, and periodic revision of the code to expand its reach.

Manage the ethics conversation actively. Develop a channel through which people can raise concerns anonymously, and build the internal capacity to actually act on what comes through it. Maintain a current listing of the ethical threats and challenges the organization faces and expects to face, update it periodically, and use it to anticipate where pressure will appear next.

This takes leadership. High standards and a zero-tolerance posture toward ethical-compliance failures have to be set at the top to mean anything below it.