The most fundamental ethical obligation for any nonprofit organization is to avoid conflicts of interest. Because nonprofits rely on donated funds, it is essential that they be able to demonstrate that this money is being properly spent—and that none of it is being used improperly to enrich the organization or its leaders.
Conflicts of interest most often involve the organization's executive director or members of the board of directors, because they are the people with the most direct influence over the organization's activities and business dealings. But any person who contributes to the organization's decision making—anyone who helps decide which businesses will get contracts with the nonprofit or which job applicants will be hired by the organization—can have a conflict of interest.
Check out our latest infographic to learn more about the four basic types of conflict of interest.