Why Association CEOs Need to Take Whistleblowers (More) Seriously

A new study suggests that nonprofit whistleblowers are treated as poorly by employers as workers anywhere else.

When the new Form 990 was introduced in 2008, among its requirements was that a nonprofit declare whether it has instituted a whistleblower policy. Organizations aren’t penalized for not having a policy—not overtly, anyway. Conventional wisdom dictates that the IRS established the rule as a way to put associations and charities on notice: You promote yourselves as bastions of integrity and ethics. Walk it like you talk it.

Which they have: According to ASAE benchmarking research, 79 percent of associations have instituted a formal written policy for protection of whistleblowers. But whether having those policies has made associations any less retaliatory toward them remains an open question.

Association leaders are under a unique kind of pressure to recognize and demonstrate ethical responsibility.

In a research paper in the February Nonprofit and Voluntary Sector Quarterly titled “Rising in Defense of Nonprofit Organizations’ Social Purposes: How Do Whistle-Blowers Fare When They Expose Corruption in Nonprofits?” (paywalled), Virginia Tech sociology professor Joyce Rothschild writes that nonprofit whistleblowers fare no better than those who call out wrongdoing in the corporate and public sectors. “[O]nce a nonprofit organization has been corrupted and an employee rises to blow the whistle, that individual can expect to be treated in the same way they would be treated in the other sectors of the economy,” she writes. That is: they lose their jobs or are forced to retire (69 percent of cases), receive negative job evaluations (64 percent), have their work more closely monitored (68 percent), and suffer other methods employers use to marginalize employees and hustle them out the door.

But Rothschild’s research points out that whistleblowing at nonprofits takes a somewhat different shape, which raises some interesting questions for association leaders. Most strikingly, 82 percent of nonprofit employees said their employer had “strong moral values and principles,” which is true for only 60 percent of those at for-profits and 30 percent of public-sector employees. But that high esteem doesn’t mean nonprofit employees are less likely to call out corruption: 59 percent of nonprofit employees who see it do blow the whistle. Nonprofit whistleblowers are acting because they’re holding their organizations to a high standard.

Of course, no leader gets a pass when it comes to acting responsibly. But in light of Rothschild’s findings, association leaders should recognize that they are under a unique kind of pressure to recognize and demonstrate ethical responsibility. At the risk of overgeneralizing, most corporate and government workers walk into their offices with their eyes wide open: They know they’re part of a hierarchical structure that is only going to permit them so much input. That’s why we have whistleblower policies in the first place: It is, as Rothschild points out, a “weapon of the weak.” But that weakness is theoretically a little stronger at nonprofits, which pride themselves on inclusivity and nonhierarchical (or at least less-hierarchical) structures where every employee’s input is valued. Start behaving in ways that suggests that’s not the case, and employees start wondering if there are deeper problems.

None of which is to say CEOs need to live in a constant state of paranoia. But Rothschild’s research suggests that establishing a high moral standard and demonstrating a commitment to it goes a long way toward strengthening your organization. “An open, listening, nonhierarchal, participatory, and self-correcting organizational form is the best antidote to seeing internal faults go public,” she writes.

How do you handle whistleblower concerns at your organization? Do you feel any additional pressure to address them than you would elsewhere? Please share your thoughts in the comments.

(John Foxx/Stockbyte/Thinkstock)

Mark Athitakis

By Mark Athitakis

Mark Athitakis, a contributing editor for Associations Now, has written on nonprofits, the arts, and leadership for a variety of publications. He is a coauthor of The Dumbest Moments in Business History and hopes you never qualify for the sequel. MORE

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