Ethical Standard Deep Dive: Standard 3

Throughout the month of October, members of the AFP Ethics Committee will be addressing each of the standards in our Code of Ethics. Standard 3 is reflected upon by Tycely Williams, CFRE. 

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Standard 3: Members shall effectively disclose all potential and actual conflicts of interest; such disclosure does not preclude or imply ethical impropriety.

Tycely: Disclosure is important to upholding our allegiance to public trust and transparency. Disclosure is equally important in avoiding conflicts of interest, as well as the appearance.

As ethical fundraisers, we commit to “effectively disclose all potential and actual conflicts of interest; such disclosure does not preclude or imply ethical impropriety’. At the heart of the third standard is disclosure. Disclosure takes shape when we reveal and make known information. 

It’s important to understand that disclosure does not prevent the potential or actual conflict of interest from occurring. But in many cases, the disclosure and advance awareness of a potential conflict of interest can prevent an actual conflict of interest.

In addition, Standard 3 reminds us that disclosure does not imply an ethical failure to observe improper behavior.  We have a personal responsibility to share—any and all information that may relate to elements in question, under review or up for discussion.

Back in the day, as a frontline fundraiser working in a supportive role, I often collected money for tickets, auctions, and as outright contributions. I vividly remember an instance where my colleague returned to the office with the official organizational-issued cash box. A generous patron approached me with a twenty-dollar bill. I thanked her for the contribution, issued a receipt and realized I didn’t have an appropriate container to place the cash.

My purse seemed to be the safest place to hold the cash. However, while all the guests had left the event, I didn’t feel comfortable placing the organization’s cash in my purse without disclosing to a peer I was in possession of cash that belonged to the organization. I shared with a peer what occurred, disclosed my intent to place the cash in my wallet and upon returning to the office disclosed to the same peer I submitted the cash utilizing our internal procedures.

In this instance, disclosure gave me peace. I didn’t have a conflict of interest to disclose, but I did have an ethical responsibility to disclose my acceptance of cash belonging to the organization and my placement of the cash in my purse. Ethical disclosure includes yet transcends beyond conflicts of interest. Through this situation and many others, I learned the value of disclosure and will continue to fundraise in a transparent and open manner.      

Guidelines

• Members establish a clear understanding between themselves and their organizations regarding the extent to which members are permitted to engage in outside consulting.
• Members disclose if they or a member of their immediate family have a material interest in a current or potential vendor firm.
• Members disclose any formal relationship they may have with a donor, including relationships formed with that donor through previous employment.
• Members encourage their organizations to adopt policies on conflict of interest.
• Members understand that effective disclosure includes the sharing of sufficient information to adequately explain the facts so that persons or entities who might be affected by such possible conflicts of interest can make informed decisions.
• Members understand the provisions of the IRS “Intermediate Sanctions” regulations in the U.S., or their equivalent in other countries, that apply to persons associated with nonprofit organizations who might also benefit from business or commercial arrangements with the organization.

Examples of Ethical Behavior

1. Making sure there is agreement upon the amount of time per month that can be devoted to private consulting, and putting that agreement in writing.
2. Refusing to engage a consulting firm seeking to direct the member's organizational capital campaign after a fundraising staff member reports an offer from that firm of a position once the campaign ends.
3. Refusing to accept appointment as an executor or personal representative of a donor's estate.

Examples of Unethical Behavior

1. Failing to report to one’s employer knowledge of being a beneficiary of a donor’s estate plan.
2. Holding an ownership interest in a vendor firm that provides products to one's employer without reporting such interest to the organization's leadership.

Supported by: 
The Claudia A. Looney Fund for Ethics in Fundraising
&
The Patricia F. Lewis Ethics Endowment Fund