qusations

Ethics of Higher Education Finance Page 2 of 3

By the end of this lesson, students should be able to:

Discuss what acting for the public good means to higher education finance.

Explain how to distinguish between a self-promoting gift and one that is not.

Explain ways universities have attempted to handle finances and fundraising in an effort to act in the most ethical way possible.

Describe how to ensure that donors are treated fairly and their wishes are followed.

Financial management in higher education has been under scrutiny for the way money is handled. There are many opportunities for employees to personally benefit from the money designated for universities. All universities should strive to educate and monitor financial transactions to ensure that the public trust is unquestioned. When a person acts for the public good they strive to increase the welfare of those around them other than themselves. Our policies should be established in a way that does not require a person to act against their own self-interest. The policies should provide a well thought-out framework in which to work so that the temptation to benefit one is not an option. People have a tendency to operate from a position of self-interest. Self interest can be referred to as “egoism”. Acting for the public good requires that the person is motivated by their own ego but the action is to increase the public good. Collectivism is when a group of persons are benefitted by a certain action. In higher education we work individually and in groups to accomplish the goals of the university. When a group works to better the institution in which they also benefit is collectivism. Social dilemmas arise when a person or group have to choose who will benefit from a particular action. Some groups benefit while others do not. Another dilemma is when the benefits of a decision are greater for one group than another. We say that a person is altruistic if their motives are to benefit one or more persons other than themselves. Principlism is motivation to uphold a morale principle. It is necessary to understand these various concepts to lay the foundation for understanding how to properly manage money. As administrators in higher education we are expected to act in a manner that is ethically and fiscally responsible. We have a social responsibility to do the jobs we are paid to do to the best of our abilities. Fiduciary responsibility means that we are responsible for the proper financial management of the money we control. Anyone who experiences the effects of the activities of the university are called “stakeholders”. A healthy tension occurs when our fiduciary responsibilities are contrasted with our social responsibilities. This tension is called the “stakeholder’s paradox”.

Ethics of Higher Education Finance Page 3 of 3

Universities were established to promote an increase in intellect and social ideals. To accomplish these goals universities are required to expose their students to a broad offering of opinions and research. We have an obligation to promote the ideals of our university within a sound financial plan. To stray from the ideals of our mission would be to act in an unethical manner. When gifts are raised for the university we are expected to behave within norms that are established by higher education. The morals of a sporting event may not apply the same when raising money. Fundraisers and financial managers act as moral agents for the university. Philanthropy is the passing of wealth from a person or organization to another. Fundraising is the practice of bringing together those with money and the institution. It is impossible to separate the values and world-view of the donor from the gift. Fundraisers exist to make sure that the funds come to the institution from those who share similar morals and world-view. Donors will give and continue to give if there is a high degree of trust for the fundraiser and the institution. They expect that the information they are given is accurate and does not omit key information. Any hint of deception in obtaining a gift is not ethical. When a donor makes a contribution the institution is obligated to follow their wishes. Over time it is very difficult to preserve the intent of the original gift. Circumstances may change that require interpretation in later years. All universities should have written policies on how various types of gifts will be counted. Anytime you question whether your actions may not be in the best interest of the public good you should not do it. This can be called a conflict of interest. Simply identifying a conflict of interest is not enough. We are all capable of sensing when something is just not right. A common mistake of universities is to establish codes of conduct that govern the actions of their employees. Although codes are essential they cannot guarantee that people with always adhere to them. National organizations are useful to assist universities in establishing and training personnel in the ethical practice of fundraising and financial management. Top management must firmly stand behind the code of conduct to have any chance of success. When top management is exposed for violating the code the whole institution comes into question. Universities are responsible to generate income, advance society, and submit to regulation.