ERC's 2007 National Nonprofit Ethics Survey released this month shows that, as in the past, nonprofit organizations' ethical standing remains superior to the other sectors. Nevertheless, integrity in the nonprofit sector is eroding and misconduct is rising -- particularly financial fraud, which now is more prevalent among nonprofits than in business or government. The survey also found that size makes a difference, with mid-sized nonprofits at greatest risk for misconduct.
 
According to the survey, boards, while very important in shaping the perceptions of employees with regard to ethics, are not taking advantage of their influence to set clear ethics standards for their nonprofit organizations. Where boards have heavy influence, there also are high levels of misconduct and lower perceptions that top leaders prioritize ethics.
 
"One would think that freed from the pressure to generate and distribute profits to shareholders, nonprofit organizations would rise high
above the myriad ethics and compliance issues that have plagued the public and private sectors over the years," said ERC President Patricia Harned, Ph.D. "Unfortunately, the 2007 National Nonprofit Ethics Survey paints a very different picture. The nonprofit sector that for so long enjoyed a better reputation with regard to its ethics now exhibits many of the shortcomings ERC found in its companion surveys of the public and private sectors."
 
Rates of observed misconduct in nonprofit organizations are at the highest level since ERC began measuring in 2000. In 2007, more than half
(55 percent) of nonprofit employees observed one or more acts of misconduct in the previous year, of a list of 18 types of misconduct.
 
ERC found that the key ethical challenges for nonprofits fall along the same lines as for the private and public sectors. In 2007, the types of
misconduct most widely observed by nonprofit employees were: putting one's own interests ahead of the organization's -- 24 percent; lying to employees -- 21 percent; abusive behavior and misreporting hours worked -- each 19 percent.

For a copy of the full 2007 NNES -- a companion to ERC's already-released National Business Ethics Survey and National Government
Ethics Survey -- go to http://www.ethics.org/download.asp?fid=131