Hiring the Donor’s Daughter

Nonprofit and charitable organizations face many of the same ethical challenges that other organizations face, but they may also bump into a few special problems from time to time.

As an example, consider the following HR dilemma, which was posed to me recently.

I work for a nonprofit organization in health research, and I’ve recently been told that I will be hiring and supervising a new individual whose parents are donating her salary for one year (it’s to be a one-year, limited-term position) in addition to making a sizeable donation. The hope is that, in time, the donors will make a significantly larger gift of a million dollars or more. The arrangement presents numerous challenges to me as a manager, since everyone in the upper levels of the organization agrees that the true nature of the arrangement can’t be revealed, but many employees will realize that the situation is unusual and will have serious questions about it.

I’ve presented my concerns to those involved, but the decision-makers are rationalizing their actions (they tell me it’s “for the good of the organization”), and asking me to embrace this “opportunity.”

Clearly, the mid-level manager here is in a tough position, caught between a rock and a hard place. The manager is being told, by those higher up, that this is the way things are. But the manager also has a team to manage, and the unorthodox hiring of this new “employee” may cause trouble.

Here are what I think are the relevant considerations:

1) I don’t think the basic arrangement itself is obviously unethical. The “employee,” here, is essentially a volunteer, being bankrolled by her father. A bit lame, for her, but if she provides the organization with some value, that in itself could be a good thing, in addition to the donation that her father is making and may later make.

2) Point #1 above assumes that this person will actually do some work, rather than just be padding her CV by means of this one-year position with a reputable nonprofit organization. If she’s just going to take up space, then her presence is inevitably going to be resented and hence disruptive.

3) Then there’s the question of whether this “hire” is affecting anyone else’s job. From what I understand, no one is being fired to make room for this new person. But even if no one’s job is immediately in jeopardy, it may have implications for who gets hired over the next year, who gets overtime, whose job is expanded in interesting ways, and so on. So other employees do have reason to be concerned.

4) The fact that senior management sees a need to hide what’s really going on, here, seems to be where the ethical problem lies. That part seems highly problematic. If this is a good “hire”, why not be transparent about it?

5) At a certain level, this is as much a “wise management” question as it is an ethics question. If (as seems to be the case) the current plan is bad for morale, then wise senior managers should realize that, and think this through more carefully.

All in all, I would suggest that the situation, as it is being handled by senior managers, represens a significant lapse in leadership. Their motives in accepting the deal — hiring this woman in return for a big donation — are reasonable enough. The mere fact that her hire wouldn’t go through the usual processes isn’t itself damning, provided that the net value to the organization is positive, and as long as no one’s rights are violated. Perhaps the ends here do justify the means — after all, we’re talking about the potential for a very large donation. But the fact that senior managers feel the need to keep the deal secret is a major red flag. Wise organizational leaders should work hard to make sure that, when compromises are being made, they are at very least compromises that they are able to defend, and about which they are willing to be transparent.

13 comments so far

  1. Jonathan on

    I’m curious about your first point Chris – how do you classify this person as a volunteer? She is being paid a salary, the funding for which just happens to be donated.
    One thing that would seriously concern me about this scenario is the potential for problems down the road due to the link between the philanthropy and the hiring. Will the organization feel pressured to extend her contract or make the position permanent? What if she isn’t good at the job? What if the donor attaches additional strings to the future donation – e.g., I’ll give you the million $ but only if you promote my daughter, hire my son, etc?

    • Chris MacDonald on

      Jonathan:

      I only wanted to say that she’s “like” a volunteer, from the organization’s point of view. The organization is getting her services for free. Maybe she’s more like an unpaid intern. I’m just trying to offer an analogy that makes the setup seem less weird.

      I think the slippery slope you suggest is well worth worrying about. What happens when the donor asks for the position to be extended? Or suggests the daughter be given more responsibility or authority? Etc. etc. I wonder if the senior managers thought about that.

      Chris

  2. Anne Buchanan on

    Thanks Chris, an interesting issue and you raise important points. I would add though a major concern is that the donors have put stipulations on the donation. Charities have long faced an uphill battle of trying to educate donors that they need to donate for the mission of the organization and let the organization decide where that money goes. These donors seem to have said we will donate if you do this with some of the money, and the “this” is purely a self-interest. It would also be a major concern if the donors would not have given the additional money without the hiring. This kind of ‘gift’ would raise conflict of interest questions because there is an indebtedness with it: i.e. you will hire my daughter for the gift, and the organization’s acceptance of it will set a precedence for such indebtedness going forward since they have already said they will do what the donors want to get his money. That is an ethical concern for me.

    I would also add to your comments on employees that it will impact employees if they have to do it as a hiring process and not a volunteer position, they have to put her on the payroll, may have to create a position that may not be in the existing structure, etc. And they will not avoid the questions of other employees of how and why this person jumped the queue to get a job. As you point out keeping it secret is not creating a transparent climate that ethics leaders should promote.

    The organization’s justifications are a narrow definition of what is for the good for the organization. It is a short-term good because it gets immediate and potentially future funds, but it will be a long-term bad for lots of other reasons. Not-for-profits need to engage and encourage people to support their missions, not be vehicles for people to meet their self-interests.

    Cheers,
    Anne

    • Barry Waldman on

      This is a fascinating scenario with very insightful analysis from Chris and thoughtful responses from Jonathan, Anne, and Nicholas.

      Let’s face it, in this situation, an administrator would try to think of any possible way to make this pass the smell test with government, Board, staff, and recipients of the program’s services. My suggestion is to think about the mental gymnastics the administrator would be willing to do for a retiree offering volunteer services if their transportation were paid. The decision-making would be based on how beneficial their services would be, how this would impact staff and others involved, and whether rethinking the usual mode of operation appeared worthwhile for program, personnel, and posterity. If so, the issue would be raised directly with Board and staff to gain their approval.

      Back to the actual donor situation, the ultimate issue – is what does the daughter have to offer, irrespective of her parents? If the focus is truly on optimizing what the daughter is able to contribute and this clearly outweighs risks and side-effects, then why not hire the daughter exactly to the degree she merits on her own. Most parents, donor or otherwise, know their child’s limitations very well. If you tell them, “I’m willing to hire your daughter, on a trial basis, for 15 hours a week to help us with this project, but whether this leads to anything further will be up to her,” you would probably open the possibility of serving their needs and yours – ethically.

  3. nicholasnonsense on

    Reblogged this on Nicholas' Nonsense and commented:
    Now, this seems to be a pretty precarious situation all around, but the things mentioned are for the most part okay, according to MacDonald. The main problem is this:
    “4) The fact that senior management sees a need to hide what’s really going on, here, seems to be where the ethical problem lies. That part seems highly problematic. If this is a good “hire”, why not be transparent about it?”

    And I think he’s absolutely right. Why not be transparent about it? That is, unless there’s something upper management is not telling the middle manager…

    Below is MacDonald’s overall thoughts on the matter:

    “All in all, I would suggest that the situation, as it is being handled by senior managers, represens a significant lapse in leadership. Their motives in accepting the deal — hiring this woman in return for a big donation — are reasonable enough. The mere fact that her hire wouldn’t go through the usual processes isn’t itself damning, provided that the net value to the organization is positive, and as long as no one’s rights are violated. Perhaps the ends here do justify the means — after all, we’re talking about the potential for a very large donation. But the fact that senior managers feel the need to keep the deal secret is a major red flag. Wise organizational leaders should work hard to make sure that, when compromises are being made, they are at very least compromises that they are able to defend, and about which they are willing to be transparent.”

  4. Andres Martin-Farfan on

    Hello Chris, thank you for your post.

    When I read the relevant considerations I realized that you never mentioned the possibility of breaking the company’s rules by hiring someone only because his or her parent would donate his or her salary. Every time I have applied for a job I have read something like “This is an Equal Opportunity Employer”. Well, in this case if this organization provides with the above statement on its job description, they would be breaking their own rules, which is obvious to be to be unethical. What do you think about it? Wouldn’t it be something to consider for this specific case?

    Thank you!

    • Chris MacDonald on

      Fair question. I don’t know whether the charity in question has such a policy. But usually such policies (I think!) only forbid discrimination based on race, gender, etc.

  5. T Munoz on

    If the parents donate the money for their daughter’s salary, are they issued a charitable tax receipt? I find this offer unethical and just plain wrong in the most simple terms.

    • Chris MacDonald on

      Good question re the tax receipt. I don’t know the answer. Setting that aside, do you still think it’s unethical? If so, why?

  6. Nettisha Holas on

    If the question is, is ‘hiring’ this person ethical? Then I would say that it depends on your ethical approach. The fact that she doesn’t have to go through the normal hiring procedure isn’t considered fair and one can only assume whether or not she’ll do the work given to her. I agree that the major issue is the lying (or lack of releasing total truth) by top management. I’m curious as to why upper management seems to be hiding what’s going on. Why hide it unless they think it’s wrong or unless they know it may cause uproar within the company…and if that’s the case, then perhaps they should reconsider. My question is how much information is she going to tell her staff regarding the situation? What is she allowed to tell them? The ends seem to justify the means in this case. Looking at it from a utilitarian standpoint, one can argue that it is ethical because the end is a large donation contributing to their medical research. Just because it may be ethical, doesn’t mean there won’t be any resentment or anger from her staff.

  7. Alexa Saracco on

    The upper-management says that hiring the volunteer is for the greater good. The organization is nonprofit so it seems logical that their priority would be to help other. While it might put the manager in an awkward position, it would benefit everyone else. The Ethical theory of altruism is when the manager’s interests aren’t considered, although it won’t be easy, it will benefit everyone else in the long run.

  8. Devin Thomas on

    Upper management is taking a monetary utilitarian ethical approach to this situation. While the mid level manager is not comfortable with the hiring process in this case, upper management believes that the monetary gain that the company will achieve from donations and the donor’s daughter’s salary will outweigh any other concerns. While I believe the company will benefit from this action, I do not believe upper management is making the right decision by concealing why the donor’s daughter was hired. If the employees found out that they have been lied to, upper management’s actions could create a negative ethical image that the rest of the company feels as though it is justified in following.

  9. Doug Mathis on

    Upper management is using a utilitarin ethics approach where the ends justify the means. It is obvious they are making an unsual hire, but more people will be helped because of their deciscion. Hopefully the individual being hired becomes a true benefit to the department, and nobody gets hurt. The non profit environment is tricky, the main way non profits develop new programs is through donations, and developing one with deep pockets is critical to their continued success.


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