What are the effects of ethical issues regarding finance in non-profit organizations - Research Paper Example

They must practice transparency and accountability and set ethical guidelines to promote the will for public goods. The need for information disclosure mechanisms is a necessity for the survival of these important non-state actors. The paper concludes that ethics in management of NGOs is an area that concerns the government, the clients (Community), donors and the board of management. The areas of focus target public good hence, ethics in practice becomes paramount. The third sector commonly represented by Non Governmental Organizations (NGOs) or non-profit making organizations are governed by private law and with independent legal status pursuing programs of general interest for the improvement of society in the fields of social welfare and sustainability.

Such organizations are generally held in high public esteem in both developing and developed societies. Non profit organizations have faced serious challenges recently which are why a rethink in the sector discussion has ensued over the last decade. They are faced with globalization, technological progress, rising living standards in advanced countries. On the other hand, their causes have led to human transformation politically, socially and economically. For these reasons people have become more sensitive to social problems: hunger, disease, income inequalities, lack of opportunity, and impact of natural and man-made disasters (Argandona, 2007).

In some cases, NGOs take over the role of governments, by sub-coordinating or complementing those governments. They have become a channel or individual philanthropy or charity organizations which obtain funds from government. One would therefore pose the question whether ethical issues should be incorporated in management of not for profit organizations. An interest in non profit accountability has grown because “non profit organizations are granted the right to solicit tax