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Governance Q&A: Should nonprofits serve alcohol?

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In my office we have mixed opinions on what the organization should pay for when it comes to lunches with donors and staff meals/staff retreats. Should a nonprofit ever spend money on alcohol? If yes, what about for staff?

It's a sign of a healthy organization when people discuss what the best thing to do is, and everyone is confident enough to express different opinions. You are fortunate. What is unfortunate is that you only got part way through the ethical decision-making and didn't come to agreement on action. It would be quick and easy for me to jump to a judgment and answer your question with a yes or no and brief explanation of what I think you should do. Instead let's take advantage of that dynamic office environment and see if you can push it a bit further to the point of decision.

Here are some questions and reflections for consideration so that you and your colleagues can continue the dialogue and come up with your organizational choice:

  • You ask what a nonprofit should do. Do people in your organization think the decision of whether or not to spend money on alcohol would change if you were a for-profit or a government-sector organization? If yes, then what is it about being a nonprofit that leads to that decision?
  • Would the answer be different if the meal is with a donor or if it is with staff? What is the difference?
  • You say opinions vary on what the organization should pay for, not whether it should pay at all. Is the issue just alcohol, or is it something else?
  • Does your organization have spending bans on other items? Do you ask yourselves if you should ever spend money on other items besides alcohol, for example, non-fairly traded coffee or gasoline allowances? If not, why is alcohol the one in question?

By asking yourselves such questions you might be surprised by what arises. What does it mean to be a nonprofit? What does alcohol consumption mean for each of us? Such questions surface people's cares, their values, and how their values relate to one another, hierarchically speaking. They open the door to deciding, not only what we as individuals should do, but what we as members of a particular values-based nonprofit should do.

Unfortunately, I can't be in your dialogue, but based on previous experiences with similar conversations, I can imagine many of the comments. Some people may say that:

  • Nonprofits have to be strict guardians of their limited finances and spending money on alcohol is frivolous spending that takes resources away from running programs, or paying staff.
  • The organization is paying for food anyway so, for responsible adults, a glass of wine with the food is no worse. It is an important customary way of celebration, demonstrated by a raised glass before we begin to dine.
  • Having alcohol may be customary for some, but there are people in the organization of varied religious faiths and perhaps alcoholics under treatment. Serving alcohol may not be respectful to all present.
  • Alcohol has caused many social ills and as social organizations, nonprofits should not be seen to contribute to its consumption.
  • Some of our donors, or potential donors, are owners or managers of Canadian beer and wine companies and it would be an insult to them if we imply alcohol is bad.

In these arguments we see values such as responsibility and accountability, collaboration and partnerships, respect for difference, efficiency, etc. There will be strong emotions underlying the various choices about what the organization should do. Perhaps a colleague was raised by an abusive alcoholic parent and the mere smell of alcohol raises her anxiety level. She doesn't think the organization should spend money on alcohol because she doesn't want to be near it. Perhaps another colleague was raised in a family where a glass of wine was a regular part of dinner and he associates it with good food and conversation with loved ones. He doesn't think it's wrong to spend money on alcohol because he wants to enjoy that same atmosphere at a staff retreat. These personal values all serve to guide an individual's action, but to what extent are decisions on behalf of the organization guided by organizational values?

One of the answers to why we should do something a certain way may be to respect a policy. Are there any existing rules or norms that the organization expects to be followed? Perhaps the organization has already agreed to abide by specific regulations on how money must be spent when it accepted funds from a donor. Is the organization obligated to standards of conduct that include a rule that no money shall be spent on alcohol? Perhaps the organization works on the social impacts of alcohol abuse and a no-alcohol policy exists as a means to demonstrate integrity between the organization's messages and actions. In other words, are there existing obligations or mission-based reasons to not spend money on alcohol? If not, then what values serve to guide what the organization should do, rather than should not?

The answers to these questions will lead you to ask other kinds of questions. Asking, for example, "how often", or "when" will help to identify best timing or frequency. Asking "how much" will tell us best amount. Is the amount to be spent on alcohol an excessive use of limited resources and/or disproportionate to other spending? Could the fact that it's offered free and without limits during a long event, lead to an amount of consumption that might put individuals and/or the organization at risk? Asking "who" will identify everyone with a stake in the decision. This helps us consider how best to maintain respectful relations inside and outside the organization.

These questions and answers all begin to map out a path for the ethical decision, while ensuring we learn more about organizational values and assumptions along the way.

Ask if the various assumptions behind people's concerns are valid: is it really the case that some people in the office will take offense to alcohol being purchased as part of a staff dinner? Is the office policy still relevant or should it be updated? Perhaps refusing to buy a round of beer from the local micro-brewery will not impress a donor because, as a strong environmentalist, she is more appalled to see an organization spend money on shrimp that have been harvested in a manner that is destroying ocean habitats. Verification that our understandings are correct is an important step in our journey to make ethical decisions.

The final step in your dialogue is to make a choice based on the understandings acquired and the scale of values highlighted in your vision and mission. When nonprofits make a choice, it is a commitment to act based on a considered decision about the best action possible in a situation. The action should promote the organization's ethical values in the long term. Be creative and find ways that ensure everyone contributes to the organization moving toward its mission. Be respectful of those who make your work possible. Be transparent and explain your choices.

Cheers.

Anne Buchanan is a consultant in Ottawa. She managed the ethics program at the Canadian Council for International Cooperation for many years and has written numerous resources to guide good practice in voluntary sector/civil society organizations. Anne can be contacted at anne.buchanan@rogers.com.

Because nonprofit organizations are formed to do good does not mean they are always good in their own practices. Send us your ethical questions dealing with volunteers, staff, clients, donors, funders, sponsors, and more. Please identify yourself and your organization so we know the questions come from within the sector. No identifying information will appear in this column. To submit a dilemma for a future column, or to comment on a previous one, please contact editor@charityvillage.com. For paid professional advice about an urgent or complex situation, contact Anne directly.

Disclaimer: This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.

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