On Philanthropy - Loss of Public Trust is a Nonprofit’s “Chapter 11”

Corporations recover from ethical lapses; for nonprofits they can spell doom

Close-up image of the pyramid with an eye on the US dollar billContributed by AFPSEWI
Milwaukee Business Journal
February 1, 2019 issue

Why did the bank want to return all the government bailout money ASAP?... Because it was upset at all the hidden fees!

Corporate negligence and ethical lapses have traditionally brought public relations storms – but lately, those storms seem easier to weather.  Witness Volkswagen’s faked fuel consumption averages or GM’s hidden billions in liabilities: after the initial blow-up, it wasn’t long before both companies were able to motor ahead.

Poor ethical behavior among corporations does spark public distress and sometimes costly cleanups.  However, after the public apology and reparations, it seems the community’s eye of judgment is lifted swiftly, allowing businesses to carry on as usual. 

Here’s a question:  when we switch the realm from profit-making to making the world a better place, is the same grace given to nonprofits?

A good reputation is a nonprofit’s lifeline -- and bailouts are not an option. When it comes to ethics, the public may hold nonprofits to a higher standard.  For nonprofits, ethical issues are felt not as brief bottom-line blips, but can feed lingering cynicism among donors and lead to a loss of vital funding.  A nonprofit that loses its ability to inspire altruism is headed toward its own kind of “Chapter 11.”

That’s why local members of The Association of Fundraising Professionals (AFP) are being offered best-in-class tools and resources to ensure they align with ethical practices, so their organizations can continually enhance their public trust and positive community impact. 

There’s a payoff that’s good for everyone – and no “hidden fees!”

On Philanthropy appears monthly in the Milwaukee Business Journal and is contributed by Jevita Brister for the Association of Fundraising Professionals, Southeastern Wisconsin Chapter.