Charitable contributions and behavioral ethics

In one of the all-time great episodes of Seinfeld, George falsely tells various of his colleagues around Christmas time that a charitable gift has been given in their respective names to “The Human Fund,” which prompts his boss to give George a company check for $20,000 made out to this non-existent entity. What does this have to do with behavioral ethics and compliance?

As described in a post several years ago – Is the path to risk paved with good intentions?  – the act of doing good can “morally license” doing bad. This is often less a matter of committing outright fraud (as in George’s case), and more about “gray area” conduct or (in the case of his boss) a lack of due diligence.

To address these risks, companies (that haven’t already done so) should consider implementing charitable contributions policies and related procedures. Such policies and procedures should address risks arising from charitable contributions of bribery, fraud and conflicts of interest. They should generally permit  contributions only to entities recognized by the law as charitable; prohibit contributions to entities that engage in unlawful discrimination or other misconduct; not permit contributions to be made in cash or through third parties; and allow contributions only after required due diligence has been completed and approvals documented.

So that this doesn’t make me sound too Grinch like, let me close the post (and open the New Year) with a slightly belated greeting for fellow Seinfeld alumni: Happy Festivus!

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