The Nonprofit Ethicist | Conflict of Interests?

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NPQ's The Ethicist

Dear Nonprofit Ethicist,

I am a fundraising consultant. I was asked to be on the board of directors of one of my clients. I was caught off guard and immediately accepted. Is it unethical for me to be on the board of directors of a client and still be paid for my fundraising services?

Blindsided

Dear Blindsided,

In theory a board member can engage in an economic transaction with his organization, provided (1) he discloses his interest to the board, (2) the transaction is in the best interest of the organization, (3) and the board discusses and votes on the transaction in the absence of the affected party. In your case, these tests are easy, but I predict that your fellow board members will expect you to discount your rate. Unless you work for free, your rate will always be too high to satisfy your colleagues. Thank them for the honor, and resign now. Ethics is like spinach: it is good for you even if you have to make yourself eat it.

  • Alan Arthur

    Gentle Folks –
    Several points in response to the question and the reply:
    1) If the person who asked the fundraising consultant to serve is asking the marketer to be on the board to get cheaper services, without being explicit about it, THAT’S unethical behavior (though, of course, not illegal).
    2) If the person asked was truly “caught off guard”, then obviously they really aren’t very connected to the organization; we need to be cultivating potential board members BEFORE they get asked.
    3) In all but the smallest of organizations (or most dysfunctional) would the board of directors be making decisions about who does fundraising consulting (unless in the unique situation that the board itself is soley responsible for fundraising); if not, then there are some bigger issues with governance there.
    4) The ethical process laid out by the “nonprofit ethicist” is not “theory”, but reality.
    Thanks.
    – Alan