Monday, December 21, 2009

Non-Profit Doesn't Mean Ethical

Mount Sinai and other nonprofit hospitals are making dubious, perhaps misleading, claims in their ads. They're making claims that, if made by a for-profit drug company, would be subject to serious legal restrictions.

The main lesson, here, is that profit is not the source of all questionable behaviour. In order to do bad things, you don't need to be pursuing money. In order to find yourself playing fast-and-loose with the truth, for example, there just has be something (some value, or objective, or mission) that you think is more important than the truth. In some cases that might be profit. In others it might be power, or fame. In other cases it might be healing the sick.

Some people might object that minor ethical infractions like the ones in the NYT story are easy to forgive, given the good work such hospitals do. After all, we're only talking about ads that might tend to mislead some potential patients. And these are non-profit organizations after all. They're in the business of doing good. Doesn't that mission mean we should cut them some slack? Well, no. In many ways, being a nonprofit organization is a pretty small difference. Technically, a nonprofit organization is just one that doesn't distribute wealth to shareholders. And that certainly doesn't mean money isn't a driving concern. And nothing in nonprofit status certifies that an organization actually does good. So the main difference between, say, a nonprofit hospital and a for-profit hospital is that a nonprofit hospital needs "merely" to break even, whereas a for-profit hospital needs (on average) to break even plus a bit. Meeting those objectives is liable, I think, to strike managers in either kind of organization, as really important — probably sufficiently important, from time to time, to warrant behaviour that the rest of us would take as unethical.

Read the entire piece here.
For more on ethics violations among non-profits, go here.

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