Code of Ethics
Adopted: December 8, 2003
“Always do the right thing. This will gratify some people, and astonish the rest.” - Abraham Lincoln
As a matter of fundamental principle, the nonprofit and philanthropic community should adhere to the highest ethical standards because it is the right thing to do. As a matter of pragmatic self-interest, the community should do so because public trust in our performance is the bedrock of our legitimacy. Donors and volunteers support charitable organizations because they trust them to carry out their missions, to be good stewards of their resources, and to uphold rigorous standards of conduct.
Nonprofit and philanthropic organizations must earn this trust every day and in every possible way. But organizations are, at base, people, and it is up to these people—board members, executive leaders, staff, and volunteers—to demonstrate their ongoing
commitment to the core values of integrity, honesty, fairness, openness, respect, and responsibility.
Adherence to the law is the minimum standard of expected behavior. Nonprofit and philanthropic organizations must do more, however, than simply obey the law. We must embrace the spirit of the law, often going beyond legal requirements and making sure that what we do is matched by public understanding of what we do. Transparency, openness, and responsiveness to public concerns must be integral to our behavior.
Community foundations exist to help citizens help each other. They offer donors reliable administration, insight, and a way of keeping their gifts pertinent to a changing society; they offer assistance to citizens in need—whether that assistance take the form of provision of food and shelter, public cultural places and events, or recreational opportunities. Because community foundations are engaged in helping and are entrusted with resources provided by others, we have a high moral calling. We are depended on, and claim to speak to and for an entire community.
Leadership of our Foundation must contribute a vision of what the community needs and can be:
- First, we have to be just or play fair. Nothing destroys trust faster than a perception of favoritism.
- Second, to be trusted we have to be honest. When mistakes happen, they should be acknowledged and the foundation should move on.
- Third, trust requires production of real benefit. A community must come to see that real people are clearly helped and that we adapt to respond to changing needs.
- Fourth, the community foundation must respect differences. The diversity of persons within any community must be reflected in staff, leadership, and allocation of resources.
Because the work of community foundations depends on trust, all those associated with the Grand Rapids Community Foundation must make a commitment to uphold the public trust. Independent Sector’s list of nine beliefs or commitments provide a broad context for ethical practice in the development of trust:
- Commitment beyond self is at the core of a civil society;
- Obedience to the laws, including those governing tax-exempt philanthropic and voluntary organizations, is a fundamental responsibility of stewardship;
- Commitment beyond the law, to obedience to the unenforceable, is the higher obligation of leaders of philanthropic and voluntary organizations;
- Commitment to the public good requires those who presume to serve the public good to assume a public trust;
- Respect for the worth and dignity of individuals is a special leadership responsibility of philanthropy and voluntary organizations;
- Tolerance, diversity, and social justice reflect the independent sector’s rich heritage and the essential protections afforded it;
- Accountability to the public is a fundamental responsibility of public benefit organizations;
- Openness and honesty in reporting, fund raising, and relationships with all constituencies are essential behaviors for organizations which seek and use public or private funds and which purport to serve public purposes;
- Prudent application of resources is a concomitant of public trust.
Ethical Standards for the Grand Rapids Community Foundation
Public trust is the key to our success. We believe that if we act in accordance with the general principles above we will secure trust. As we do our work based on these principles, the following standards of technical competencies and ethical values will help us best meet the public’s trust.
The ethical standards for the Grand Rapids Community Foundation can be related to the five areas of community foundation activity: Governance, Management, Grantmaking, Resource Development, and Communications and Public Relations.
- Members of the Grand Rapids Community Foundation board will serve for the public good and resolve all real and potential conflicts of interest.
- Board members will serve without compensation.
- Board members will be informed of the legal requirements of the Grand Rapids Community Foundation and accept responsibility for assuring that the Foundation meets its legal requirements.
- The Board will be representative of the demographics and interests of the community it serves.
- Funds will be invested to meet Grand Rapids Community Foundation goals and will not be driven by personal or business relationships.
- Staff will be hired with the skills and competencies necessary to operate acommunity foundation. Continuous improvement upon these skills will be required of all staff.
- Public records will be kept in such manner that they are easily understood andeasily accessible to the public.
- All decisions about grants, programs, and priorities will be made in the best interest of the community.
- Grantmaking decisions will be made in an objective manner.
- Staff and volunteers involved in grantmaking are required to disclose conflicts of interest in regard to appropriate grants.
- Staff and volunteers involved in grantmaking will strive to be representativeof the demographics and interests of the community.
- The process for applying for grants will be open, accessible, broadlycommunicated, and easily understood by potential grantees.
- Staff and volunteers will treat grantees with dignity and respect, viewing them as partners rather than as recipients.
- Grantees will be held to high standards of performance and accountability.
- Grantmaking should strive to impact diverse facets of the community’s public needs and complement other community resources.
- Staff and volunteers will provide stewardship of all accepted gifts regardlessof origin, purpose, or size.
- Staff and volunteers will follow not only the technical requirements but also the spirit of donor intent.
- Staff will be compensated on a salary or flat fee basis and should not seek or accept compensation based on commissions or percentages of gifts received or pay finders fees for gifts directed to the Grand Rapids Community Foundation.
- Staff and volunteers will conduct the Foundation’s asset development with respect for donors and with the donors’ interest and welfare in mind.
- Staff and volunteers will offer donors options for making gifts, including making gifts to organizations other than the Foundation.
Marketing and Public Relations
- Grand Rapids Community Foundation will report to its various publics on its activities in an open, honest, direct, and intentional manner.
- Staff and volunteers will actively seek the input and involvement of the community at large.
- All communications will protect the donors’ right to privacy, including anonymity.
- Staff and volunteers will exercise discretion in use of information about the organizations and donors, respecting confidentiality and privacy of those we work with.
Additional requirements for the President and Vice President of Finance and Administration
The honest, integrity, and sound judgment of senior officers is fundamental to the reputation and success of the Grand Rapids Community Foundation. In addition to the requirements specified in the above Code, the Foundation’s President and Vice President of Finance and Administration must also:
- Act with honesty and integrity; avoid actual or apparent conflicts of interest in personal and professional relationships.
- Provide colleagues with information that is accurate, complete, objective,relevant, timely, and understandable.
- Comply with applicable laws, rules, and regulations of federal, state, and local governments and other appropriate private and public regulatory agencies.
- Act in good faith, with due care, competence and diligence, without misrepresenting material facts or allowing independent judgment to be subordinated.
- Respect the confidentiality of information acquired in the course of employment.
- Share knowledge and maintain skills necessary and relevant to the Grand Rapids Community Foundation’s needs.
- Proactively promote ethical and honest behavior within the Grand Rapids Community Foundation environment.
- Assure responsible use of and control of all assets,
Conflict of Interest
- The Grand Rapids Community Foundation strives to maintain the highest ethical standards in all policies, procedures and programs and to avoid any conflicts of interest.
- We recognize, however, that volunteers and employees are involved and play an active and vital role in the community. From time to time, potential conflicts of interest may arise. It is the Community Foundation’s policy to deal with each conflictof interest in as open and appropriate a way as possible.
- A conflict of interest is considered an activity or interest that may cause bias. Any trustee, officer, member of a committee with board delegated powers, or employee who has a direct or indirect financial interest or is affiliated with an organization seeking to request a grant from the Community Foundation could have a conflict of interest.
- This could include any position held presently or in the recent past, investment in any business, or any other avocational activity that may result in a possible impartial opinion.
- Annually, all volunteers and employees will be requested to complete a Conflict of Interest Disclosure Statement identifying any positions held by self or any immediate family member (parent, spouse, or child) and affiliations with any organization using the following guidelines: A. Any role (significant donor, volunteer, advocate or advisor) held by self or immediate family member with any charitable or community organization currently or within the past three years. B. Any ownership or investment interest held by self or immediate family member with any entity currently or within the past year that the Community Foundation has or is negotiating a transaction or arrangement with. C. Any consulting work or other affiliation with organizations that may create an interest or bias with respect to the Community Foundation’s action.
- The chair of each committee will be responsible for determining if a violation of the Community Foundation’s Conflict of Interest Policy has occurred. If it is determined a violation has occurred, the chair will recommend appropriate corrective action.
- Any possible conflicts shall be disclosed before discussion begins. The minutes of the meeting shall reflect this disclosure. After acknowledging the potential conflict, the interested person may briefly address the other members regarding this matter. The interested person may also answer pertinent questions since personal knowledge on the issue may be of assistance to the other members in reaching their decisions. The interested person, however, will abstain from voting on this issue. For grantmaking decisions where conflicts of interest exist, Board of Trustees will vote on each grant request separately, noting conflicts at the time of each vote.
- In order to avoid discouragement of participation in the Community Foundation’s Youth Grant Committee, members of the committee, including any committee member serving on the Community Foundation’s board of trustees, may apply and be considered for and may receive a scholarship award from the Community Foundation. This would not constitute either a private benefit or an excess benefit transaction if the applicant and any of the applicant’s family members recuse themselves from the entire scholarship nominating and award process (including all meetings, discussions, and votes) with respect to the pool of potential nominees in which the applicant is included. All recusals must be documented.
ETHICS AND CONFIDENTIALITY
- All communications with the Grand Rapids Community Foundation from grant seekers, contractors, or vendors shall be made through the Grand Rapids Community Foundation office. No contact shall be made with individual Trustees or Committee members.
- Discussions held during all Community Foundation meetings shall be confidential. This includes any oral or written information gleaned from meeting information provided by staff.
General Collection and Use of Personal Information
Grand Rapids Community Foundation collects and uses personal information such as: name, address, phone number, and e-mail address when a donor voluntarily provides it to us. In addition, the Grand Rapids Community Foundation keeps a record of each donor’s giving history. This information is kept on file for IRS purposes and is also used by the Development Department to analyze overall giving patterns in order to make more accurate budget projections.
Grand Rapids Community Foundation does NOT sell, trade, or share its donor list with any other organization.
Transparency and Trust
The Sarbanes-Oxley Act, also known as the American Competitiveness and Corporate Accountability Act of 2002, was enacted after a number of corporate accounting scandals rocked the business world and ruined the finances and reputations of several well-known companies. Sarbanes-Oxley is designed to restore trust in American companies. Its regulations provide oversight to publicly traded corporations. While nonprofits are exempt from the regulations, we and other community foundations want to make sure our business practices are solid.
The Grand Rapids Community Foundation operates in compliance with the National Standards for Community Foundations as set forth by the Council on Foundations.
The Community Foundation has voluntarily adopted numerous policies and procedures to further guarantee that how we conduct our business is not only legal, but ethical.
Our policies and procedures include:
- Records retention. The destruction and/or retention of financial and other transactional records is important. Not only do we want to provide an open record of our activities, we are committed to keep a donor's intent into perpetuity. That's why our rigorous records policy exceeds most standards for document storage. The Board of Trustees developed and approved the policy in 2005.
- Audit committee. Community volunteers and Trustees with strong backgrounds in accounting and finance work closely with our auditors and staff to oversee accounting and financial reporting processes as well as internal controls. This committee was established in 2004.
- Whistleblower policy. Employees who report unethical, dishonest or fraudulent activity will have their complaints thoroughly investigated and are protected from retribution. We added this policy in 2005.
- Investment review committee. Community volunteers and Trustees review Foundation investment performance each quarter, review managers and recommend changes in strategy and direction when necessary.
- 990 Posting and Audit. The Grand Rapids Community Foundation completes a 990 and independent audit each year. Both documents are available for public inspection by calling the Foundation at 616.454.1751.
- Conflict of Interest. Each year, our Trustees, committee members and staff are required to sign a conflict of interest statement, which discloses any potential conflicts they might have with the Community Foundation. Further, resource committee (grant approving) members and board members are not allowed to vote on grants in which they have a known conflict.
- Foundation Standards. Grand Rapids Community Foundation is one of the first community foundations nationwide permitted to use the National Standards Seal. The endorsement comes from the Council on Foundations (COF), a national professional association based in Washington, D.C. Its Community Foundations National Standards program is the first of its kind in the United States.