While Council members are committed to best practices and high standards of conduct, the Council is not an enforcement organization. Its interest is in protecting and preserving the public trust by encouraging ethically sound management of philanthropic institutions. This commitment to responsible and effective philanthropy led the Council’s board of directors to establish specific procedures for invoking sanctions for possible or proven institutional misconduct by its members. This process strengthens the ability of the field to regulate itself and helps the Council fulfill its mission to educate its members about best practices and ethics in philanthropy. This and other efforts by grantmakers to monitor their own conduct will help prevent the need for further state and federal oversight and demonstrates the field’s eagerness to comply with not only the letter of the law, but also the spirit. In order to better serve the field and to ensure that this policy has the broadest reach, the Council will cooperate with regional associations to encourage mutual participation in this or similar processes whenever appropriate.
This sanctions policy is not a substitute for and cannot serve as a whistleblower policy for member institutions. Accordingly, members are strongly encouraged to adopt policies and follow procedures designed to allow officers, employees and volunteers to report suspected legal and ethical violations.
An inquiry of a member will begin once the Council becomes aware of alleged violations of legal or ethical practices. The Council will be open and responsive to information obtained from all sources, including Council members, the media and the general public.
The Council is committed to maintaining a safe process for individuals to report suspected ethics violations. The Council will strive to protect the identity of such individuals and the confidentiality of any information given to the extent that doing so does not undermine the administration of this policy. However, information received by the Council is not protected by privilege and the Council has a policy of full cooperation with relevant law enforcement agencies.
While individuals may submit anonymous reports about potential violations, the inability of the Council to interact with the individual to evaluate the credibility of the complaint and obtain additional information relating to the allegations may inhibit or prevent the ability of the Council to fully pursue the allegations raised.
Within two weeks of becoming aware of a potential member violation, staff will gather information to determine:
- Whether the alleged behavior, if true, appears to violate legal or ethical standards; and
- Based on the evidence, the likelihood that the allegations are true.
The basis for an inquiry into alleged ethical violations will be based on the standard that the conduct reflects a willful disregard of the Statement of Ethical Principles.
Staff will gather as much information as it can relevant to the allegation. Possible sources of information will include, without being limited to, publicly available tax documents, information from websites, relevant news articles and Council membership files.
The information gathered by staff will be presented to the president/CEO or to the chair of the board if the president/CEO is unavailable or otherwise unable to consider the matter. The president/CEO (or board chair) will determine whether to conduct an initial inquiry. Where the allegations raised involve a member of the Council board or a member of the Ethics and Practices Committee, the determination of whether to conduct an initial inquiry will be made by the Executive Committee of the Council.
An initial inquiry will begin by contacting the member (both the CEO and the board chair of the member institution) to notify it of the allegation and to request information relevant to the inquiry. While lack of information is always relevant to the inquiry, the failure of a member to respond within the allotted time should not delay staff from concluding the initial inquiry and reporting to the board chair and president/CEO.
Upon conclusion of the initial inquiry, staff will report to the Executive Committee on those cases where it is determined that, a) if true, the alleged behavior appears to be a violation, and b) there is some likelihood the allegations are true. The report will include the name of each organization investigated, the date the allegations came to the Council’s attention, the nature of the allegation and the facts underlying the conclusions reached. The report also will describe all contact with the member and the nature of those conversations. Based on the information collected and reported on by the staff, the Executive Committee will determine whether an allegation contains sufficient merit to be forwarded to members of the review panel. Where the allegations raised involve a member of the Council board or a member of the Ethics and Practices Committee, the review panel (as defined below) will receive the report and determine whether an allegation contains sufficient merit to be further pursued. The president and CEO will periodically provide the Executive Committee with a list of initial inquiries conducted where staff concludes that the allegations are without merit.
The review panel will be composed of six individuals appointed by the Executive Committee based on the recommendations of the board chair and CEO. Members of the review panel will be selected from among individuals with a national reputation for integrity. Three of the six members should be individuals who are not considered insiders with respect to the Council. Panel members will be asked to serve three-year terms. Service is limited to no more than two consecutive terms. Panel members will work in teams of two to consider cases referred to them by the Executive Committee. The team will evaluate the allegation(s) and determine the next step. Next steps may include:
- No action necessary—the panel notifies the Executive Committee, the decision is documented, the member is notified and the file is closed.
- Further investigation is necessary—the panel reports back to the Executive Committee about what information is missing and sets a deadline for reporting back.
- Member needs time to respond/take corrective action—the panel sets a reasonable deadline and notifies the member. The deadline should follow quickly.
- Impose sanctions—the panel reports to the Executive Committee that sanctions are appropriate and recommends what final action should be taken.
Each case will either be resolved or forwarded to the Executive Committee for consideration within 90 days after the case is referred to the team.
In recommending sanctions to the Executive Committee, the panel will tailor the sanctions to match the nature and severity of the allegations. Bearing in mind that the process is not intended to make a determinative finding of guilt or innocence, the decision of what, if any, sanction to recommend will take into account the following factors:
- The likelihood that the alleged behavior is illegal or unethical
- The nature of the behavior underlying the investigation
- Whether the alleged behavior is a single act or omission, or whether it is part of a larger pattern of behavior
- Whether the member has been investigated and/or sanctioned by this or any other Council process previously
- The member’s cooperation with staff and the review panel in the investigation of the allegation(s)
The Executive Committee shall have broad authority to impose whatever sanction is most appropriate under the particular circumstances. Accordingly, the panel may recommend one or more of the following actions or such other sanction that is appropriate under the circumstances:
- Private censure
- Probation—with or without benefits (for a time or until a triggering event)
- Public censure
- Revocation of membership
In especially egregious situations, the panel may recommend that the Executive Committee consider notification of relevant enforcement authorities. The Council will disclose all relevant information it has when required to do so by law and will cooperate with enforcement authorities upon request.
The Executive Committee will consider the recommendations of the panel and will determine, in its sole discretion, the final course of action to be taken by the Council in each situation. Revocation of membership may only be imposed where such revocation has been approved by 60 percent of the votes cast at a meeting of the full board. The Executive Committee will notify the member of the outcome of the investigation and what, if any, final action is being taken. Members will be given 14 days to correct any factual errors upon which the decision was based. Material changes in fact will be evaluated by the Executive Committee and referred back to the review panel for further consideration if appropriate.
The Executive Committee will make the decision of whether or not and to what extent to publish the result of any particular inquiry into alleged member misbehavior on a case-by-case basis. The Executive Committee will report the results of investigations conducted under this process to the full board regularly.
In the event that an organization that is the subject of an inquiry under this process is simultaneously being investigated by the Internal Revenue Service, attorney general or other enforcement authority, the Executive Committee will consider and determine what, if any, effect such investigation has on this process.
Power of the Full Board to Act
To facilitate timely and responsive administration of this policy, the Executive Committee is empowered to act on all matters under this policy except as noted for revocation of membership. However, any and all action to be taken or approved by the Executive Committee may also be taken or approved by the full Board of Directors of the Council.