Are Charities Ethical Organisations

1
Are Charities Ethical Organisations?

• A Survey of Ethical Issues and Attitudes amongst
  UK Charities
• Presented atThe 4th Workshop on the Challenges
  of Managing the Third Sector, Fribourg
  Switzerland, Sept 2003
• Philip Holden

2
Charities as subject of research

• Increased interest in sector withdrawal of
  state provision (70s to present)
• Recent reviews of sector legislation
• Increased academic interest
• Key questions -
• What kinds of organisations?
• How is the sector resourced?
• Why do voluntary organisations exist?
• What is the sectors relationship with other
  sectors?
• How do voluntary organisations differ from other
  organisations?

3
How are charities different?

• Wolfenden Committee(1978)
• Cost effective, Flexible, Pioneering
• Hadley and Hatch (1982)
• Flexible, Responsive, Close to need,
  Participative, Empowering
• Kramer (1990)
• Plus Protect interests, Promote citizen
  participation, Meet needs not met by Govt
• Hansmann (1980) Weisbrod(1988)
• Trustworthy

• Salamon (1987)
• Amateurish, Patchy provision, Paternalistic,
  Insufficient
• Davies Smith (1995)
• Altruistic desire to control
• Knapp et al (1990)
• Differences untestable or lack evidence
• Billis (1998)
• Stakeholder ambiguity
• Fenton et al (1998)
• Ambiguous public attitudes

4
So, are charities ethical?

• Obvious answer Yes because
• Their ends justify the means?
• They do the right thing?
• They are intrinsically good?
• They are better managed than companies?

5
Charities on a pedestal?

• distinction from statutory and commercial
  sectors
• motivationshould belove and not for financial
  gain
• Fenton et al (1994)

6
Charities on a pedestal?

• charities are more effective now in providing
  services than five years ago.
• charities play a major role in making
  communities better places to live,
• charitable organizations play an important role
  in speaking out on important issues.
• Independent Sector (1999)

7
The Challenges of Managing the Third Sector

• From two directions
• From within to be more efficient
• From without, to be more effective and
  accountable
• Outwardlymaintains the myth of the small,
  co-operative, compassionate venture. Internally
  the charity must have the ruthless efficiency of
  a business
• Fenton et al (1994)

8
And questions are asked

• On the other hand, there has been an overall
  decrease in the percentage of Americans who
  believe that charities are honest and ethical in
  their use of donated funds, falling from 71
  percent in 1990 to 60 percent in 1996 and 62
  percent in 1999.
• Saxon-Harrold, S., (2001)

9
The Survey

• 1,606 charities polled by mail
• Over 60 income below 0.5M, 17 over 1M
• Questionnaire also made available via website
• 12 pages, a mirror of IM Study of 1994
• 10 returned marked gone away
• 290 completed received to date (18)

10
The areas of the IoM survey
11
The respondents organisationssize by employees
or volunteers
12
The respondents organisationsby What (topic
or cause)
13
The respondents organisationsby Who
(beneficiaries)
14
The respondents organisationsby How (methods)
15
Key Findings 1code of ethics

• 56.9 did not have a code of ethics
• Of the 42.2 with a code
• 93 distributed it to all staff
• 26.8 to clients
• 19.5 to donors
• 11.4 to suppliers

16
Key Findings 2code of ethics

• Most likely to have code
• Housing-related charities
• Those benefiting children/youth or
  ethnic/racial groups
• Those providing buildings or facilities or
  research
• Least likely
• Religious, environmental or medical/health
• Those with general beneficiaries
• Umbrella organisations, those providing human
  resources

17
Key Findings 3respondents approach to ethical
issues

• Felt they should give ethical leadership (95.9)
• 70 undecided or disagree that trustees come
  first
• 70 undecided or disagree that donors come first
• Beneficiaries/clients of a charity are the
  priority (71)

18
Key Findings 4expectations

• I am expected to follow standards of conduct
  laid down by my organisation
• With a code 97.6 agreed or strongly agreed.
• Without a code 90.9 agreed or strongly agreed.

19
Key Findings 5obstacles faced

• The most frequently cited -
• Lack of information
• Poor communication
• Lack of professional training?
• Conflict of values with other trustees
• Culture of amateurism/voluntarism within
  organisation

20
Key Findings 6barriers
21
Summary

• High levels of awareness/sensitivity
• Surprisingly low level of codification
• Wide variation in the dissemination of codes
• A suggestion that an ethical code may denote a
  management approach that values training

22
So are charities really different?

• The survey suggests not (significantly)
• Their aims and objectives may be distinctive
• There is little evidence that the charities
  surveyed manage themselves in a distinctively
  ethical manner
• In some cases charities may not be publicly
  stating or sharing their values.
• Can charities then claim (even to their
  supporters) that they are ethical organisations?

23
Any questions.?
24
(No Transcript)
25
References

• Anheier, H. K., (2000) Managing non-profit
  organisations Towards a new approach Civil
  Society Working Paper I, Centre for Civil
  Society, London School of Economics
• Brigley, S., (1994) Walking the Tightrope A
  Survey of Ethics in Management. Corby, The
  Institute of Management.
• Buchholz, R.A. and Rosenthal, S. B., (1998)
  Business Ethics. The Pragmatic Path beyond
  Principles to Process New Jersey, Prentice Hall
• Burns, M., Forstater, M., Mong, A., Osgood, D.
  and Zadek S. (1997) Open Trading. Options for
  Effective Monitoring of Corporate Codes of
  Ethics. New Economics Foundations/CIIR
• Curtis, Jody (2002) A Lesson From Sisyphus.
  Foundation News Commentary, Sep/Oct Vol. 43
  Issue 5, p1
• de Chernatony, L. and McDonald, M. (1998)
  Creating Powerful Brands (2nd Ed.) Oxford,
  Butterworth-Heinemann
• Douglas, M. and Isherwood, B., (1980) The World
  of Goods. Towards an Anthropology of Consumption
  Harmondsworth, Penguin
• Dti (2003) Enterprise for Communities
  Proposals for a Community Interest Company
  Department of Trade and Industry Consultation
  Paper. www.dti.gov.uk/cics/paper/
• Fenton, N., Gray, P., Golding, P. and Radley, A.
  (1994) Who cares? Report of a Pilot Study into
  Public Attitudes to Charities and Volunteering
  Department of Social Sciences, University of
  Loughborough
• Fenton, N., Golding, P. and Radley, A. (1994)
  Professionalism a Charitable Dilemma ARNOVA
  Conference, San Francisco
• Fenton, N., Passey, A. and Hems, L. (1998) The
  Art of Trusting Public Attitudes to Charities in
  the Context of Civil Society ISTR Conference,
  Geneva, Switzerland
• Halfpenny, P. and Reid, M., (2002) Research on
  the voluntary sector and overview. Policy
  Politics vol30 no 4 533-550
• Hancock, G. (1989) Lords of Poverty London,
  Macmillan
• Henley Centre/Gallup (1997) Planning for Social
  Change 1993/94 and 1995/96, London, Henley
  Centre.
• Holden, P.R. (1998) Charity Brand Management.
  Volunteers the missing dimension Institute of
  Charity Fundraising Managers Convention,
  Birmingham, UK
• JRF (1997) Towards Voluntary Sector Codes of
  Practice, Joseph Rowntree Foundation/York
  Publishing Services Ltd
• Kaler, J., (1999) Whats the good of ethical
  theory? Business Ethics A European Review 8.4
  206-213

26
References continued

• Kendall J and Knapp M (1996) The Voluntary Sector
  in the UK, Manchester University Press
• Laczniak, G.R. an Murphy, P.E. (1993) Ethical
  Marketing Decisions The Higher Road Needham
  Heights, Allyn Bacon.
• Le Bigot, J. (1996) Coca-Cola, Levis,
  Adidas...Co-Educators of Our Children The Big
  Brand Challenge ESOMAR Publication Series
  Volume 203. Amsterdam, ESOMAR
• Malachowski, A ., (1995) Morality and
  Competitive Advantage, Business Ethics, A
  European Review 4.4 199 - 201.
• Marketing Week (2002) WWF-UK rapped by ASA over
  toxic chemical press ads. 8th August, Vol. 25
  Issue 32, p6
• Mayo E (2002) The Dream and the Reality in
  Wilby P and Brierly N New Statesman. Social
  Enterprise (Special Supplement) New Statesman
• MORI (2000) Charity Begins At Home And At
  Christmas Nestle Family Monitor 2000 (Wave 9)
  Topline Results. http//www.mori.com/polls/2000/nf
  m10top.shtml Accessed 12 June 2001
• Packard, V., (1960) The Hidden Persuaders
  Harmondsworth, Penguin
• Philips, A. (1998) Speech to the Charities Annual
  Conference, Queen Elizabeth II Conference Centre,
  London. Kings Hill, Charities Aid Foundation
• Saxon-Harrold, S., (2001) "Taking the Pulse of
  Americans' Attitudes Toward Charities,"
  Independent Sector
• Schlegelmilch, B. (1998) Marketing Ethics An
  International Perspective London, Thomson
  Business Press.
• Schumacher, E.F., (1974) Small is Beautiful
  London Abacus/Sphere Books
• Stainer, A. and Stainer, L., (1995) Is it
  Ethical to Compete on Ethics?, Business Ethics,
  A European Review 4.4 219 - 224.
• Taylor, M., (1996) Between Public and Private
  Accountability in Voluntary Organisations Policy
  Politics vol24, no 1, 57-72
• Valasquez, M. (1998) Business Ethics. Concepts
  and Cases. (4th Ed.) New Jersey,Prentice Hall
• Weaver, G. R., (1993) Corporate Codes of Ethics
  purpose, process and content issues Business and
  Society 32.1 44-61
• Weaver, G. R., Klebe Trevino, L. and Cochran P.
  L., (1999) Integrated And Decoupled Corporate
  Social Performance Management Commitments,
  External Pressures and Corporate Ethics
  Practices. Academy of Management Journal 42.5
  539 - 553
• NB this is the full reference list from the paper
  submitted to the conference.