Allison R. Russell

Multiple Stakeholders and Multiple Bottom Lines

Why the nonprofit sector over the private or public sectors? Nonprofit organizations differ from both for-profit and public-sector organizations in several ways. Whether you can articulate these differences easily from reading textbooks and research articles, or whether you have learned them implicitly through your own work as a nonprofit practitioner, you will no doubt agree with this claim. These differences may in fact be part of what has sparked your interest in the sector. In this chapter, we talk about two characteristics of nonprofit organizations—multiple stakeholders and multiple bottom lines—that not only distinguish them from other types of organizations but also reveal ethical questions that we must consider when studying and working in the sector.

Case 4: Volunteer Insurgence

When data collection for a research study undertaken at a nonprofit think tank goes awry, a senior researcher must decide whether to come clean about misreported results and risk losing valuable grant funding. In this case, Handy and Russell introduce ethical dilemmas that arise when workers at different levels of an organization—part-time, volunteer, and senior staff—are not on the same page. Likewise, this case asks the question of whether or not personal integrity should be compromised for the greater good, inviting readers to contemplate how personal and professional ethics coincide or clash in their own workplaces.

Introduction: Why Ethics?

What is ethics? Ethics is a discipline that deals with what is good and bad and with moral duty and obligation. It encompasses the principles and rules governing the standards of conduct of an individual or group, such as a community or a profession. Sometimes referred to as moral philosophy, it is the study of the general nature of morals and of the specific moral choices to be made by a person or group.

Case 5: Clashing Cultures

The vice principal of a nonprofit school in India must decide whether to compel her teaching staff to change their approach to conform to the expectations of international funders. This case deals with questions of how to reconcile cultural differences between NGO staff, who carry out the day-to-day work of the organization, and international funders, who may impose standards and norms from their own countries without consideration of the values of the home country. How should organizations navigate cultural clashes between different countries, or even between different communities within the same country? Handy and Russell suggest that readers consider what is ethical, using the tools provided in earlier chapters of the book.

Case 8: To Tell or Not to Tell

The employee of a nonprofit community hospital is put in a tough spot when her personal connections get in the way of her professional ethics. This case deals with the ethical dilemma that arises when individuals must determine whether to disclose privileged or private information to protect the organization’s integrity, even if it means compromising personal loyalties. Handy and Russell urge readers to consider the ethical challenges that arise when employees allow personal entanglements to get too close to their professional life, and how to navigate, mitigate, and—hopefully—avoid such situations, using ethical frameworks and the road map to ethical decision-making as a guide.

Case 2: Strings Attached

The chief development officer of a private, religiously affiliated liberal arts college must balance the demands of potential donors and zealous board members in this case, which deals with how to prioritize competing interests of different stakeholders. Handy and Russell directly address the fundamental nature of nonprofit organizations—multiple stakeholders, multiple bottom lines—that they first introduced in Chapter 2. They ask readers to think through different options and approaches when weighing the best course of action for the college.

Case 9: Rare Diseases, Common Dilemmas

The President of a nonprofit that supports research for rare diseases faces the following funding dilemmas: contested bequests, board member pressures around funding decisions, collaboration with both nonprofit and government partners, and restricted versus unrestricted donations. This case highlights the many different paths that nonprofit leaders must navigate to secure and maintain the funding they need to carry out their mission. The authors push readers to step into the President’s shoes and figure out how to address these dilemmas to keep the doors open, all the while maintaining ethical rigor and transparency.

Case 7: Values and Services

The CEO of a local community foundation seeks to reconcile her personal views with a new funding initiative in the community. This case asks readers to consider the extent to which personal views should impact professional decisions and how to navigate the difficulties that arise when nonprofit employees must balance the dual roles of advocate and analyst. Do nonprofits have an obligation to support underserved groups in their communities, even if it means ruffling the feathers of other stakeholders? In this case, Handy and Russell encourage readers to contemplate the inherent moral positioning of nonprofits in their communities and the obligations of nonprofit leaders to maintain this position.

Theoretical Foundations and Frameworks for Decision-Making

So far, we have talked about recent nonprofit scandals and considered why ethics should be an important part of decision-making in the nonprofit sector. You may be convinced that ethics belongs in every profession and especially even in a sector that relies so much on the trust of the public and its stakeholders. But given the complexities of nonprofits—their multiple stakeholders, multiple bottom lines, and sometimes intangible social missions—how can we begin to approach, understand, and apply ethical decision-making in this context?

Case 1: Tainted Money

Set in a nonprofit university, this case example asks the question, “Should a nonprofit take a donor’s money if it was made through questionable means?” Through this case, Handy and Russell push readers to tackle the age-old question of whether charities can clean dirty money, or whether they should avoid donations of money made through potentially unethical means. Discussion questions challenge readers to look at this question from new perspectives and justify their opinions by applying ethical frameworks introduced in Chapter 3.