Business Ethics in Npo's

In this paper I will explain that nonprofit organizations (NPOs) are faced with multiple challenges that can lead to unethical behavior throughout the organization. Non-profit organizations are vital to our communities; many issues in our society would go unmet without them. Non-profit’s work for the betterment of society and concentrate on issues that are in need such as disaster relief, levels of poverty, and environment depletion. In addition to government interaction, these social concerns would be neglected if the non-profit sector did not exist. As they try to eliminate costs and meet their objectives, NPOs still straddle the business ethics border. These institutions do not have the pressure from shareholders; however, internal and external factors can create pressures that are parallel to for-profit businesses. A recent survey by the Ethics Research Center (ERC), found that there is an increasing level of unethical behavior in non-profit organizations (Klebe 2). The president of the Ethics Research Center, Patricia Harnad said, “Conduct that violates the law or an organizations standards is on the rise, and in 2007 nonprofit violations have reached levels comparable to business and government organizations” (V). This paper analyzes unethical behavior patterns of non-profit organizations and the negative effects it has on the entire non-profit sector. Recognizing these factors does not alleviate the groups for their actions, but it highlights the relations between the nature and background that can shape these ethical concerns.

The National Nonprofit Ethics Survey by ERC found that unethical decisions are found more in non-profit than for-profit companies (Klebe 1). It raises the question on why companies that build their mission solely on social services to the community are behaving unethically. The survey found that financial fraud was just as common in the non-profit sector as it is in business or government sectors (3). In 2007,...