Ethics

We’ve all had experiences with nonprofit leadership who would do almost anything for funding. But have you considered the ethical implications that can go along with the ‘money at all costs’ mindset? We're talking about things like: How far is your agency willing to go? Would they misrepresent revenue to funders? Would they inflate the numbers served so it appeared they were helping more people than they really were? Welp. Luckin Coffee (LC) boldly went there and got caught. But there is much to learn from the error of their ways, so let’s take a look at LC’s actions through the eyes of a grant professional to examine the ethics (or lack thereof) of it all.

While there are legal requirements for nonprofit organizations around transparency and disclosure of financial information, there can also be some grey areas where ethical decisions aren’t as clear. For instance, it can be tempting to apply for and accept funding anywhere you can get it. But what if you serve clients who are struggling with substance use, and a potential funder is known for contributing to the opioid crisis? If accepting money means you are straying from your mission, or if you have any doubt about the morality of doing business with a certain corporation, it may not be worth the financial benefit. Your goal should be to build funder relationships that you can stand behind and feel good about. Here, we are going to explore a few other ethical dilemmas you may run across when building relationships with funders.

The topic of ethics in grants is incredibly broad, as there are often many moving parts and people involved with grant awards. The fund-seeking agency might have a variety of staff members contributing to the process: the executive director, program staff, finance staff, a grant writer, maybe even the board of directors. And then, of course, if the agency receives an award, there are ethical considerations for managing the sometimes very large sums of money. Once again, there might be a host of individuals carrying out the program activities, reporting progress, expending the funds, and so on. In other words, the agency is responsible for ensuring ethical practices across many levels of a grant award. But for the purposes of this discussion, I want to back up a bit. What about some of the ethics that go into researching and writing the proposal?

Do you remember the first time you wrote a report for a funder and had to explain away an undesirable outcome (or more)? Picture it: coffee on drip. Report questions pulled, outcomes and program-related questions sent to program staff. Me, a rookie grant professional at the time, ready to tackle the report…or so I thought. And then I got the email: one of the program’s stated outcomes fell significantly short of the goal. As in, the targeted outcome was 80%, but the actual outcome was 40%. *Insert appropriate amounts of rookie-level panic here, then breathe.*

We live in a world where, as consumers, we can purchase literally anything with a quick search and a few clicks. The rise of online shopping and next-day delivery has made it easier than ever to go on a shopping splurge without seriously weighing the costs and benefits of the newest gadget or the impact it will have on our personal finances. When a grant is awarded to an organization, the program staff may enthusiastically load up their online shopping carts with everything outlined in the grant budget. There is certainly a time and place for efficient procurement of approved supplies and services. In fact, federal law requires grantees minimize the time elapsing between the receipt of grant funds and the payment for allowable expenditures (2 CFR 200.305(b)). It is important for program staff to quickly implement the grant award, and typically, this means doing a little shopping.

It’s normal and often encouraged to seek multiple funding opportunities for a single program, often referred to as braided funding (see Braiding Funds without Getting Tied Up In Knots – Approaching Budgets with Pre-Award and Post-Award In Mind by Julie Alsup, GPC). You might even request more funds than you need to run a program with the expectation that one or more proposals will fall through. As nonprofit organizations that belong to and are supported by the public, we should always be looking for new funding streams in case an existing source should dry up. But what if you ask for more than you need, and all the funders decide you shall receive?