Skip to main content

Nonprofits and the Public Trust: No Excuses

Image
By

Periodically, social media is ablaze with comments from nonprofit leaders bemoaning the fact that their organizations are too small to keep up with a seemingly overwhelming amount of professional and regulatory standards. While one may hear less outright complaining from big nonprofits when they turn a blind eye to the importance of standards, ethics, and the public trust, chances are we'll be reading about their transgressions in the headlines.

Whether nonprofits flaunt the public trust due to ignorance or by design, the performance expectation for all nonprofits -- no matter their size, discipline, or resources -- is grounded in the fact they have been incorporated to perform a public service. They have entered into a relationship with the public that fulfills a need for which they receive benefits in return. Chief among these benefits is tax exemption for mission-related activities and the opportunity for donors to make tax-deductible contributions. When a nonprofit honors its accountability to its mission, its donors and regulators, and to the law, it is fulling its public benefit responsibilities. As Sara Tangdall writes, "As a result, members of the general public place a great deal of trust in nonprofit organizations and often hold them to a higher standard than for-profit organizations."

But when a nonprofit fails in these responsibilities it risks the loss of the public's trust, resulting in the loss of its reputation and effectiveness, donor giving and, in the most dire of circumstances, the loss of its legal incorporation. Writes Dan Cardinali, "The voluntary role of board members of nonprofits does not excuse insufficient oversight." The alarming fact is that many nonprofits skate terribly close to thin ice on a regular basis when it comes to accountability.
Besides promoting and following ethical principles, all of us who work at nonprofits should call out organizations when their boards and other leaders fall short of accepted standards of transparency and oversight.[1]
Holding up one's end of the public trust relationship is the cost of doing business as a nonprofit. There are no excuses for any nonprofit not doing what it says it will do in its mission. And for nonprofits that own property, care for important collections placed in the public trust, employ staff, deliver services and any of the hundred other benefits they provide, there is heightened scrutiny to do so according to legal and regulatory requirements, and accepted best practice. Why would any nonprofit choose to do otherwise?

Meeting the public's needs through nonprofit service is a choice. Whether it's forming a nonprofit corporation, governing an existing nonprofit, or working or volunteering for a nonprofit, preserving the public's trust in your organization's work is paramount. Closing the knowledge gap by gaining proficiency in the work of your nonprofit and learning about the public trust and its attendant legal and ethical expectations are all part of running a trustworthy organization. Nonprofit accountability requires an ongoing organizational commitment, which can include time for ongoing learning and funds to take advantage of professional development opportunities. I repeat: these are the costs of doing business as a nonprofit.

If a nonprofit can't or won't do that, should it survive?


 Notes
[1] Dan Cardinali, "How Nonprofits and Government Can Work Together to Restore Public Trust," The Chronicle of Philanthropy, December 13, 2018.

Resources
Dan Cardinali, "How Nonprofits and Government Can Work Together to Restore Public Trust," The Chronicle of Philanthropy, December 13, 2018.

Karen Gano, "Regulators and Nonprofits – Working Together to Protect the Public Trust," National Council of Nonprofits, January 23, 2019.



Image: McDermott + Bull, Inc.






Labels:

Comments

James nick said…
Thanks for sharing this wonderful blog.  We are the USA nonprofit organizations, Eagle Heart Foundation historically has worked and continues to work with other nonprofits, community outreach programs, and individuals to provide direct support to the Native American communities, women, children and transgender communities etc.

Best Medicine Woman in USA

Best nonprofit organizations Canada
March 1, 2022 at 12:03 PM
Post a Comment

Popular posts from this blog

What Would Make You Turn Down an Invitation to Join a Board?

By
THERE'S SO MUCH WRITTEN ABOUT RECRUITING BOARD TALENT, I thought I'd spend a little time thinking about it from the prospect's point of view. Clearly, there are boards where the line is long to get on them. But what would make you turn down an invitation? Here's a short list to get the conversation started: 1. You've had no prior exposure to the organization. Your immediate reaction is "did you pull my name out of a hat?" (Is that lady in the picture the head of the Nominating Committee?) Seems as though there must be a hidden agenda at work (like you're rich and once you become a board member you'll pour all your resources into the organization) or the organization is simply looking for any warm body to fill a seat. 2. The organization doesn't have a good reputation. There's something to be said for street cred. An organization that's floundering may be strengthened by your participation or you may find yourself sucked into...
16 comments
Read more

Three Most Important Nonprofit Executive Director Soft Skills

By
If you were asked to narrow down the list of executive director qualifications to the three most important, which ones would you identify? Would the list consist of soft skills, hard skills, or some combination? Would your list be based on the great ED you are or one you've worked for, or would it be your wish list for the ED you haven't been fortunate yet to work for?  This was an assignment in my recent online class in leadership and administration for the American Association for State and Local History . I asked the class to review three-five advertisements for museum directors and analyze what these listings intimated about the organization’s past experience, current focus and goals, and future aspirations. Then, I asked the class to identify what they consider to be the three most important qualifications they would look for in a director. (Okay, so there's more than three if you dissect my three big groups.)  Soft skills outnumbered hard skills, although ...
26 comments
Read more

Back in the Saddle

By
MY LAST POST WAS NOVEMBER 2012, A LIGHT YEAR AWAY it seems, that marked the beginning of a long push toward completing a manuscript on history museum leadership with my co-author, Joan Baldwin.  We finally submitted 350+ pages to our editor at Rowman & Littlefield this week.  If all goes well, we expect the book to be available in early 2014.  It's taken us two years to get to this point, so six more months or so of revision and production don't seem too long to wait until we can hold the final product in our hands (and you can, too!). The project put a lot of things on hold, including this blog.  I'm glad to be back writing about intentional leadership -- leading by design -- for nonprofit boards and staffs.  Certainly, my thoughts are now informed by the forthcoming book, in which Joan and I posit that nonprofits need to focus resources on leadership, not just management.  Most cultural nonprofits are at a crossroad, as is the sector in general, wh...
14 comments
Read more