Does your Nonprofit Protect Whistleblowers?

Having a whistleblower policy, even if not required by state law, does a lot of positive things for a nonprofit. It promotes good governance and ethical behavior, and it also allows you to hear about activities before the media. Moreover, it shows up on IRS Form 990, which has a question about whether a nonprofit has such a policy.

Aside from that, it’s just a good idea. A whistleblower is someone who is putting their career on the line to report bad behavior, be it illegal or unethical. If something is happening that shouldn’t be, this type of policy encourages someone to report it.

Be inclusive

Your policy should be tailored to your organization’s unique circumstances, but most policies should spell out who’s covered. In addition to employees, volunteers and board members, you might want to include clients and third parties who conduct business with your organization, such as vendors and independent contractors.

Also specify covered misdeeds. Financial malfeasance often gets the most attention, but you might also include violations of organizational client protection policies, conflicts of interest, discrimination, and unsafe work conditions.

And how should whistleblowers report their concerns? Must they notify a compliance officer or can they report anonymously? Is a confidential hotline available? Whom can whistleblowers turn to if the designated individual is suspected of wrongdoing?

Investigate thoroughly

Covered individuals and other stakeholders need to know how you’ll handle reports once they’re submitted. Your policy should state that every concern will be promptly and thoroughly investigated and that designated investigators will have adequate independence to conduct an objective query.

Also describe what will happen after the investigation is complete. For example, will the reporting individual receive feedback? What are the consequences to the individual responsible for the illegal or unethical behavior? If your organization opts not to take corrective action, document your reasoning.

Stress confidentiality

Don’t forget to stress confidentiality. Explain in your policy that it may not be possible to guarantee a whistleblower’s identity if he or she needs to become a witness in criminal or civil proceedings. But promise you’ll protect confidentiality to the extent possible. Finally, be sure to have your attorney review your whistleblower policy.