Educator Materials Empowered through Ethics
Table of Contents
How Ethical Am I? A Self Assessment for Students
Operating an Ethical Company Example of an Executive Lesson Plan
Additional JA Opportunities
Giving Back: Social Philanthropy Student Handout
Event Activities Before, During and After In preparation for the event, we ask that you consider some of the following ideas to ensure that your students are ready to take full advantage of the brief interaction they will experience with the executive. Please know that these are only suggestions, and that you as the educator may have some of your own terrific ideas to use in preparation for this day.
DAY OF EVENT activities:
4. Provide name tents for each student so the executive can address them by name during their presentation.
1. Have the students do an Internet search by company name to explore your guest speaker’s company. 2. Conduct a Richmond Times Dispatch search for recent articles about your guest’s company. 3. Provide the “How Ethical Am I?” (page 5) questionnaire for your students to complete. Discuss the results in an effort to get them thinking about ethics before the visit.
1. Be sure that the students are prepared for the day’s event. 2. Plan for a student to escort the executive to the classroom at the designated time. 3. Create a welcome sign for the visiting executive.
5. Be prepared to introduce the executive to the class or have a student give the introduction. 6. Actively participate in the discussion and help your students appropriately engage the executive. 7. Thank the executive and extend an invitation for him/her to return to the classroom for extended discussions if you think it appropriate.
4. Discuss the definitions provided in the Related Language (pg. 6) to familiarize your students with some mainstream business terms that might be used during the presentation.
8. JA staff may be present to photograph the activities in your classroom. If not already on file, please provide photo release forms for your students.
5. Collect questions from the students that can be randomly selected on the day of the visit during a Q&A session with the executive.
POST EVENT activities:
6. Visit any of the websites provided on page 12. 7. If you have a media contact, please inform them of this event. This is an excellent opportunity to showcase your students interacting with the business community. 8. Communicate with your school administration that media may arrive at your school to cover the event. (If anything is confirmed prior to the day, JA will contact you.) 9. Encourage your students to ask appropriate questions. Discourage personal questions regarding salary, vehicles, and residence.
1. Send a thank-you to the executive. This could be in the form of a group card or individual notes from students. 2. Call Junior Achievement to share any unique stories from your participation in the Empowered through Ethics event. 3. Complete the educator evaluation; return to the JA office.
Ethics Timeline 1960s to the 21st Century
Ethical Climate Social unrest. Anti-war sentiment. Employees have 1960s an adversarial relationship with management. Values shift away from loyalty to an employer to loyalty to ideals. Old values are cast aside.
Major Ethical Dilemmas
Business Ethics Developments
Companies begin establishing codes of conduct and values statements
Increased employee/ employer tension Civil rights issues dominate Honesty
Birth of social responsibility movement Corporations address ethics issues through legal or personnel departments
The work ethic changes Drug use escalates Defense contractors and other major industries 1970s riddled by scandal. The economy suffers through recession. Unemployment escalates. There are heightened environmental concerns. The public pushes to make businesses accountable for ethical shortcomings.
Employee militancy (employee versus management mentality)
Ethics Resource Center founded (1977)
Human rights issues surface (forced labor, sub-standard wages, unsafe practices)
Federal Corrupt Practices Act passed in 1977
The social contract between employers and employees 1980s is redefined. Defense contractors are required to conform to stringent rules. Corporations downsize and employeesâ€™ attitudes about loyalty to the employer are eroded. Health care ethics emphasized.
Bribes and illegal contracting practices
ERC develops the U.S. Code of Ethics for Government Service (1980)
ERC forms first business ethics office at General Dynamics (1985)
Some firms choose to cover rather than correct dilemmas
Compliance with laws high-lighted
Values movement begins to move ethics from compliance orientation to being â€œvalues centeredâ€?
Defense Industry Initiative established Financial fraud (savings and (1986) loan scandal) Some companies create ombudsman positions in addition to ethics officer roles Transparency issues arise False Claims Act (government contracting)
Major Ethical Dilemmas
Business Ethics Developments
Global expansion brings new ethical challenges. 1990s There are major concerns about child labor, facilitation payments (bribes), and environmental issues. The emergence of the Internet challenges cultural borders. What was forbidden becomes common.
Unsafe work practices in third world countries
Federal Sentencing Guidelines (1991)
Unprecedented economic growth spurred by the 2000s digital economy opens borders. Personal data is collected and sold openly. E-commerce poses new ethical problems. Hackers and data thieves plague businesses and government agencies.
Multinationals make rules
Privacy issues (data mining)
Anti-corruption efforts grow
Product quality (Firestone, Ford)
Rules enacted by Non-Governmental Organizations (NGOs) affect businesses
International financial fraud
Shift to emphasis on Corporate Social Responsibility and Integrity Management
Increased corporate liability for personal damage (cigarette companies, Dow Chemical, etc.) Financial mismanagement and fraud.
Class action lawsuits Global Sullivan Principles (1999) IGs requiring voluntary disclosure ERC establishes international business ethics centers Royal Dutch Shell International begins issuing annual reports on their ethical performance
Loss of privacy - employees versus employers Intellectual property theft
Formation of international ethics centers to serve the needs of global businesses OECD Convention on Bribery (1997-2000)
NOTE: The ethical climate and response to ethical dilemmas in the 1960s and 1970s blurs and loses some distinction across the decade boundaries due to the war in Vietnam, social upheaval, and resulting stress on businesses. ÂŠ Ethics Resource Center, 1747 Pennsylvania Ave, Suite 400, Washington, DC 20006
How Ethical Am I? A Self-Assessment The general stability of our society depends on the willingness of individuals to act responsibly. Businesses need to be “good citizens” because business leaders’ and managers’ decisions can affect many lives. Many everyday business events raise questions about what is the ethical thing to do. To demonstrate this, complete the following. Enter a 0 if you strongly disagree with the statement, enter a 1 if you disagree, a 2 if you agree, and a 3 if you strongly agree. ___1. I would not report it if I knew that a fellow employee was leaving the job early each day. Employees should not inform on their fellow workers. ___2. If employees I was supervising took off their helmets for a while, I’d simply look the other way. There are times managers need to ignore safety violations to get the job done. ___3. If I was traveling on business and couldn’t remember how much I’d spent on taxis or lunch, I’d simply estimate the amount. It is not always possible to keep accurate expense records. ___4. There are times an employee has to keep unpleasant information from the boss. If I learned my co-workers didn’t like her, I’d keep it to myself. ___5. We advertise that the hair tonic we sell prevents baldness. My boss and I know it’s a lie. He argues, “If our customers choose to believe it, that is their business.” I just follow my boss’s orders. ___6. Sometimes you have to take care of personal business on company time. My brother likes to send me e-mails at the office, so I sometimes take a little time to write him back. ___7. I know that even the best salespeople can’t sell more than 20 kits in one day. But if I say everybody has to average 20 kits a day, they’ll work harder. If they don’t meet the quota, I can always act nice and give them another chance. ___8. Since management’s goals are carefully developed, I should take whatever steps are necessary to achieve them.
___9. The customer said, “If you can make delivery by Thursday, you’ve got a deal.” I knew we would ship on Friday, but I said, “No problem” to make the sale. ___10. Long distance calls don’t cost the company nearly as much as they cost me, so it’s O.K. for me to use the office telephone. ___11. I would authorize payment in the form of gifts or entertainment to customer representatives in order to win a large contract, even if it is against company policy. ___12. Bending and occasionally breaking company rules and procedures is expected in business. Our company has a rule: Treat customers like you would your own family. Well, sometimes it’s necessary to lie to your own family, isn’t it? ___13. While it is important to check and report short shipments to our suppliers, there is no need to tell them about overshipments. The other day we received a bill for two cases of spare parts. But the shipper goofed, because we actually received four. I won’t say anything about it. ___14. My sister asked me to make 200 copies of a flier. I said that I would. There is nothing wrong with using the company copier for personal or community business. ___15. Taking home inexpensive items like pencils, paper clips, and envelopes is one of the benefits of an office job.
YOUR ETHICS SCORE 0 1-5 6-10 11-15 16-25 26-35 36-44 45
A statue will be erected in your honor You rank among the noblest You have high ethical standards You have above average ethical standards You have average ethical standards You might need training in ethics You may find yourself in trouble with your boss Keep it up and you’ll meet the warden
This exercise is based on “Is Your (Ethical) Slippage Showing?” Lowell G. Rein, Personnel Journal, Sept. 1980.
Related Language Ethics Vocabulary To think clearly about ethical issues and develop practical approaches for dealing with ethical problems, it is important to speak a common language, with the vocabulary defined.
Ethics Ethics refers to standards of conduct, standards that indicate how one should behave based on moral duties and virtues, which themselves are derived from principles of right and wrong. As a practical matter, ethics is about how we meet the challenge of doing the right thing when that will cost more than we want to pay.
Aspects of Ethics There are two aspects to ethics: The first involves the ability to discern right from wrong, good from evil, and propriety from impropriety. The second involves the commitment to do what is right, good and proper. Ethics entails action; it is not just a topic to mull or debate.
“Is” vs. “Ought” Ethics Discussions about ethics and what is or isn’t ethical often veer off into semantic debates about the nature of ethics. Many will argue that ethics are “relative,” “situational” or “personal.” Such positions usually reveal a misunderstanding of ethics. “Is,” or descriptive, ethics describes operational standards of behavior — that is, how an individual or group actually behaves, without reference to what should be. “Is” ethics provides no basis for distinguishing right from wrong. In that sense, descriptive ethics is really not ethics at all, but more like anthropology or social psychology. “Ought” (or prescriptive or normative) ethics is concerned with discernment of and commitment to principles that establish “norms” of behavior applicable to every person. Such ethics prescribe how people should behave, prescribing standards for what “ought” to be without reference to how things actually are. 6
The ideal behavior is based on specific values and principles, which define what is right, good, and proper. These principles will not always dictate a single ethically acceptable course of action, of course. But the prescriptive approach to ethics does provide a structure for evaluating and resolving competing ethical claims.
Ethics, Morals and Mores The terms “morals” and “mores” describe beliefs, customs and traditions that are reflected in personal convictions about right and wrong. In modern times, morals tend to be associated with ever narrower and more personal concept of values, especially concerning matters of religion, sex, drinking, gambling, lifestyle and so forth. Historically, however, “ethics” and “morality” were essentially interchangeable terms.
Moral Duty Moral duty refers to the obligation to act or refrain from acting according to moral principles. Moral duties establish the minimal standards of ethical conduct. Thus, the failure to perform a moral duty properly evokes the moral judgment that the conduct is wrong, unethical or improper. There are both affirmative and negative dimensions to moral duties. As a result, moral duty obliges us to act in certain ways (e.g., honestly, fairly and accountably), as well as to not act in other ways (cruelly, disrespectfully, etc.).
Moral Virtue Moral virtue goes beyond moral duty. It refers to moral excellence, characteristics or conduct (say, generosity or valor) worthy of praise or admiration because it advances moral principle. Moral virtue is an ideal, not ethically mandatory. Thus, we ought to be charitable, temperate, humble and compassionate; however, it is not unethical if we are not so long as we do not harm others.
Values Values are core beliefs or desires that guide or motivate attitudes and actions. They also define the things we value and prize the most, and, therefore, provide the
basis for ranking the things we want in a way that elevates some values over others. Thus, our values determine how we will behave in certain situations.
Values vs. Ethics The terms “values” and “ethics” are not interchangeable. Ethics is concerned with how a moral person should behave, whereas values simply concern the various beliefs and attitudes that determine how a person actually behaves. Some values concern ethics when they pertain to beliefs as to what is right and wrong, but most do not.
Ethical Values Ethical values directly relate to beliefs concerning what is right and proper (as opposed to what is correct, effective or desirable).
Unethical Values Most of what we value is not concerned with our sense of ethics and moral duty but rather with things we like, desire or find personally important. Wealth, status, happiness, fulfillment, pleasure, personal freedom, being liked and being respected fall into this category. We call them unethical values, for they are ethically neutral. The pursuit of unethical objectives is normal and appropriate so long as ethical values are not sacrificed in the process.
Conflicting Values Our values often conflict. For example, the desire for personal independence may run counter to our desire for intimacy and relationships of interdependency. Similarly, in particular situations, our commitment to be honest and truthful may clash with the desire for wealth, status, a job or even the desire to be kind to others. When values conflict, choices must be made by ranking our values. The values we consistently rank higher than others are our core values, which define character and personality.
Contradictory Values Sometimes we hold values that are internally inconsistent. For example, it is possible to believe
simultaneously that “honesty is the best policy” and yet that one could be “honest to a fault.” Similarly, one could accept the aphorism “a penny saved is a penny earned” and find oneself occasionally acting on the belief “you can’t take it with you” or “here today, gone tomorrow.” Some accept the principle to “love thy neighbor as thyself” and still believe that “in order to make your way, you have to look out for Number One.”
Personal Moral Values Most people have convictions about what is right and wrong based on religious beliefs, cultural roots, family background, personal experiences, laws, organizational values, professional norms and political habits. These are not the best values to make ethical decisions by — not because they are unimportant, but because they are not universal. In contrast to consensual ethical principles — trustworthiness, respect, responsibility, fairness, caring, citizenship — personal and professional beliefs vary substantially over time, among cultures and even among members of the same society. Although it is proper for individuals with strong personal and professional moral convictions about right and wrong to treat these beliefs with special reverence, they should be careful about imposing these individual, non-consensus moral values on others. This is an area where, as much as possible, the universal ethical value of respect for others dictates tolerance and respect for the dignity and autonomy of each person and cautions against self-righteousness in areas of legitimate controversy.
Personal Moral Value Systems Each person has an “operational value system” which reflects how one ranks competing values in deciding how to act. A personal value system encompasses all values — core beliefs and attitudes that guide and motivate behavior — and, therefore, it includes personal convictions about right and wrong, sometimes called “personal moral values.” The fact that everyone has a personal value system that includes opinions and beliefs about what is right and wrong, however, does not mean 7
that ethics is purely a personal matter. Again, ethics — if the term is to have any real meaning — refers to moral norms, how persons should behave according to general moral principles about what is good and right.
The False Notion of “Personal Ethics” While every person inevitably must decide for himself how to regard his moral obligations, to say that ethics are “personal” misconstrues the nature of ethics. It is likely that personal conscience will embrace a wider range of values and beliefs than core, universal ethical norms. When these “extra” values simply supplement ethical norms with personal moral convictions that are compatible with the dictates of normative ethics, there is no conflict between universal ethics and personal ethics. Unfortunately, some people are “moral imperialists” who seek to impose their personal moral judgments on others as if they were universal ethical norms. A bigger, sometimes related problem is that some people adopt personal codes of conduct that are inconsistent with universal ethical norms. Clearly, not all choices and value systems, however dearly held, are equally “ethical.” If they were, we would have no way to distinguish between the ethical levels of Hitler and Gandhi. A person who believes that certain races are inferior to others and therefore that it is “right’’ to oppress or persecute those races has adopted a personal value system that is inherently “unethical” according to the universal and consensus values associated with normative ethics. Similarly, an individual who has decided that lying is proper if it is necessary to achieve an important personal goal cannot assert personal ethics as a shield against impropriety. Simply put, all individuals are morally autonomous beings with the power and right to choose their values, but it does not follow that all choices and all value systems have an equal claim to be called ethical. Actions and beliefs inconsistent with the Six Pillars of Character — trustworthiness, respect, responsibility, fairness, caring and citizenship — are simply not ethical. 8
Imposing Value Judgment on Others Prescriptive, or normative, ethics requires an objective examination of personal values, exposing certain beliefs (e.g., that one race is superior to another) as wrong precisely because they conflict with core ethical values. But while we must insist on honesty and integrity over hypocrisy and corruption, we cannot also claim that a particular religion, political philosophy or sexual orientation is universally superior to another. Indeed, allowing the widest possible latitude in matters of personal choice and conscience is critical to upholding the core ethical value of treating all with respect.
Values and Principles When we speak of values we are referring to broad, general beliefs or attitudes about something we prize or desire. These beliefs, however, guide and motivate ethical conduct only when they are translated into principles. Ethical principles are the rules of conduct that are derived from ethical values. For example, “honesty” is a value that becomes operative in the form of a series of principles, such as: tell the truth, don’t deceive, be candid, don’t cheat. In this way, values give rise to many principles in the form of specific “dos” and “don’t.”
Corporate philanthropy Corporate philanthropy as a company donation of a portion of corporate earnings to charitable causes in the community. Corporate philanthropy is a key component of a corporation’s broader social responsibility, and includes cash gifts, product donations, and employee volunteerism.
OPERATING AN ETHICAL COMPANY Option Two – 45 minutes This is an example of a lesson an executive may present. Before going to class, create simple financial statements and bring 30 copies for use during this exercise. Briefly discuss how a company’s stock price is set and how the price of the stock goes up or down. Tell students how money is gained or lost based on comparing the current market value of the stock against the purchase price of the stock. Make sure students understand stock market value so they understand the pressure a company feels from its investors when the company’s stock price drops due to poor performance or other market factors (i.e. bad publicity.) Provide simple examples as necessary:
Objective Help the students understand that ethics is doing what is right – even if no one is watching, it costs more money or it goes against the majority.
Presentation Introductions (10 minutes) See suggested Icebreakers for ideas. Meet and greet students. Introduce yourself.
Election of Officers (10 minutes) Talk about the governing structure of a public company, and have the students identify the key components: Board of Directors (BOD), Board Chairman/CEO, and President. Help the students understand that the BOD reports to shareholders.
Example: If 1,000 shares of Company A’s stock is purchased at $10 per share ($10,000 transaction) in January, and sold in November at $12 per share (based on the market value in November), how much money is made? Elect BOD, Chairman of the Board, CEO and President and COO. Give salaries and help students understand the lifestyle associated with these positions. If time allows, students may select hometown and type of home, car(s), marital status, children, vacation preferences etc.
Activity (15 minutes) Establish the framework of a profitable global company that produces gym shoes (or any easily distinguishable material good.) Distribute and review financial statements to ensure students understand they are in a profitable business and have working knowledge of revenue, cost of goods sold and profit. Establish rewards (such as bonuses paid to company officials) based on strong performance and internal
praise and recognition received from shareholders to BOD to company officials. Also establish the company as having a strong, positive image, which contributes to the success of the brand. Create a set of dilemmas (beneficial to discuss multiple examples) that will be presented to either a company official or the BOD, but not both. The object is to create a scenario wherein a high-ranking official or the BOD learns of information that can critically impact and possibly cripple the business. However, there is a moral dilemma to either divulge this information and correct it, or cover it up so that the business is protected. Have the students draw their own conclusions about the right thing to do in each of these situations. The goal is for the students to have a deeper understanding of why a company may find itself in a situation of ethical choices. Present the dilemma to the chosen official or BOD and get the individual response. How does he/ she react? Discuss how this will impact him or her personally (loss of bonus, salary, job, or even incarceration.) Continue presenting the dilemmas for the students to discuss and analyze. If the class has a difficult time in large group discussions, create smaller groups of 5 students and ask each group to report their decisions.
Dilemma: Hazardous Materials It is discovered that a key, cost effective material used to make the rubber sole of the gym shoes has been determined to be highly toxic to humans and linked to cancer. To acknowledge this would mean a lot of negative publicity, not to mention having to revert to a more expensive material that would substantially erode profit margins.
Dilemma: Sweatshop Labor It is discovered that one of the most productive offshore factories that produces the shoes for the company is using underage â€œsweatshopâ€? labor. To acknowledge this would have legal ramifications for company officers, create a lot of negative publicity, and cost the company money redirecting labor to another
factory. Additionally, a reduction in production may be experienced.
Dilemma: Accounting Error It is discovered that several key operations have overstated sales considerably over the past six quarters. This information substantially impacts the annual sales and earnings report of the last two fiscal cycles. To acknowledge this dilemma may mean ceding their number one sales position to the competition. It may have a negative impact on the stock value of the company and initiate an unwanted federal investigation into accounting practices. Earnings would have to be restated, stocks would plummet, and it is very likely that thousands will be left unemployed as a result of the restated cash position of the company.
Conclusion (5 minutes) Many times it is one or just a few decision makers who make a choice that impacts a whole company, including thousands of families and consumers attached to that company. Ask the students to think about what it takes to make the right decision. Sometimes the correct ethical choice can have such a negative financial impact on the business that it impacts employees, their families and consumers harshly. Can an executive sometimes make what appears to be an unethical choice to protect his employees, their families, and perhaps even the economy? Is it OK to do this? Again, the goal is not to answer all of these questions, but to leave the students with a deeper understanding of the complexities of decision-making in large organizations.
Summary and Review (5 minutes) Briefly review the new terms and concepts you introduced. Reinforce the fact that ethics is about how we meet the challenge of doing what is right. Remind students that ethics are derived from the principles of what is right and wrong.
Additional JA Opportunities JA High School Programs Junior Achievement’s high school programs help students make informed, intelligent decisions about their future, and foster skills that will be highly useful in the business world. These programs can be offered in a variety of sequences at grades 9 through 12 with the exception of the Economics course, which is designed for grades 10 through 12. Local business consultants, trained by Junior Achievement, bring practical business ideas and economic insights to the school classroom. JA Company Program® – With the support and guidance of volunteer consultants from the local business community, the JA Company Program provides basic economic education for high school students. By organizing and operating an actual business enterprise, students not only learn how businesses function, they also learn about the structure of the U.S. free enterprise system and the benefits it provides. JA Company Program helps young people appreciate and better understand the role of business in our society. Twelve required volunteer-led activities. JA Be Entrepreneurial® – JA Be Entrepreneurial, a new high school program, focuses on challenging students, through interactive classroom activities, to start their own entrepreneurial venture while still in high school. One of ten JA programs designed with the specific needs of upper grade students in mind, JA Be Entrepreneurial provides useful, practical content to assist students to transition into becoming productive, contributing members of society. Seven required, volunteer led activities. JA Economics® – This program examines the fundamental concepts of macroeconomics, microeconomics, and international economics. Students gain an appreciation of globalization and interdependence. Eight required volunteer-led activities. JA Titan® – The year is 2030. The CEO of the future needs to get the Holo-Generator™ to market before the competition does. JA Titan is more than just a game, it’s a JA experience. Coupled with the presence of a volunteer in the classroom, students apply their knowledge of business as they compete online in the highly competitive industry of the fictional Holo-Generator™. While simulating “business quarters,” you’ll need to enter decisions on price, production, marketing, capital investment, and R & D. The impact of your decisions will eventually lead to the success or failure of your Holo-Generator™ company. Seven required, volunteer led activities. JA Success Skills® – Building rapport. Influencing others. Fostering teamwork. These are critical interpersonal skills. Students undergo individual interpersonal skill assessment and benchmarks are set. They then practice and develop these skills as JA classroom volunteers demonstrate their relevance to school, to work, and to life. JA Success Skills focuses on developing interpersonal effectiveness. Through an assessment, the students identify the strengths and unique potentials of their interpersonal skills. They examine how their interpersonal skills can be applied in the workplace, and practice their skills in a variety of activities, including mock job interviews. They begin work on a skills portfolio that they can carry with them into the workplace when seeking employment. Seven required, volunteer-led activities. JA Exploring Economics® – JA Exploring Economics tackles a complex subject and makes it accessible and fun for high school students through hands-on activities. JA Exploring Economics teaches concepts such as supply and demand and inflation, and teaches students about the effect which governments and the individual have on the global economy and on the price of a loaf of bread. Seven required, volunteer-led activities. JA Careers with a Purpose® – Through JA Careers with a Purpose, students learn to use ethical decision-making skills to make career and life decisions. They discover that their career can have a noble purpose by reviewing their values and life maxims. This program includes seven volunteer led program sessions and strongly encourages students to complete the skills, interests, and values career assessments available on ja.org. The program also invites students to compete in the Laws of Life essay contest. Seven required, volunteer-led activities. JA Personal Finance® – JA Personal Finance introduces students to the importance of making wise financial decisions. Students explore the role that money plays in achieving personal goals throughout life. The program demonstrates the importance of planning, goal setting, and thoughtful decision-making within the context of personal financial decisions. Junior Achievement gratefully acknowledges the National Endowment for Financial Education and Jackson National Life for their dedication to the development and implementation of JA Personal Finance. Five required, volunteer-led sessions. JA Banks in Action® – JA Banks in Action is a volunteer-led program built around eight classroom sessions. During each session, students learn the fundamentals of the banking industry and then have the opportunity to apply what they learn in a competitive environment using the JA Banks in Action computer simulation. Through the simulation, students form banking teams and operate a bank over time by making several decisions, each of which represents three months or a calendar quarter. Competing banks are doing the same thing and the banks start out on an equal basis. The banking team that develops the best strategy and makes a greater profit than its competitors is the winner, earning the title “Bank of Choice.” Eight required, volunteer-led activities.
Demonstrating Impact The Need for JA A 2008 survey conducted by the Jump$tart Coalition found financial literacy to be on the decline among our nation’s high school students. In 2008, high school seniors answered correctly only 48.3 percent of the questions on the survey, as compared to an average of 52.4 percent in 2006. At a time when the economy is facing certain challenges, these results highlight the critical importance of providing a solid foundation of financial and economic education for our students. Male college graduates in 2002 earned 65% more than males who had no education beyond a high school diploma; for female college students it was 71% more. Males and females who drop out of high school earn 23% and 27% less respectively than male and female high school graduates. Of all U.S. workers 18 and older, 21 million (16%) are actively disengaged at work, costing the economy $300 billion. Twenty-five percent of these just “show up to collect a paycheck”. The estimated U.S. national graduation rate is 71%. Of those, only, 25% are considered to have excellent basic skills.
The Proof JA is Working! Of the students with fewer than three JA experiences, 50% felt job security and permanence were very important; 100% of those with more JA experiences agreed. Among students who experience JA, 83% described themselves as taking responsibility for their success compared to only 56% of non-JA students. While 69% of non-JA students were involved in postsecondary education, 77% of JA students in this study were actively involved. The majority of JA students, 79%, suggested that JA had affected their attitudes toward continuing their education. Students’ work attitudes were changed through JA with 74% reporting that they had a more positive view of working after JA. The graduation rate for JA students with two JA experiences is 93%, and for those with more than three JA experiences, the rate is 100%!
If you plan on using Option One for your classroom discussion, you will reference this handout.
A MAJORITY OF COMPANIES GIVE LESS IN 2009, WHILE SOME COMPANIES GIVE SIGNIFICANTLY MORE Each year, the Committee Encouraging Corporate Philanthropy reports on trends in corporate giving from the results of its annual Corporate Giving Standard (CGS) Survey, an online measurement survey and benchmarking tool for corporate giving professionals.1 The 2009 survey attracted more than 165 respondents reporting a combined total of $12.1 billion in cash and product giving. While the robust online head-to-head benchmarking is reserved for participating member and subscriber companies, CECP is very pleased to share this public analyis of the trends in corporate giving as a precursor to the full Giving in Numbers report which will be available in summer 2010. To accurately report on year-over-year trends, the following analysis is based on a matched-set of 95 companies that responded to the CGS survey in 2006, 2007, 2008 and 2009. These matched-set companies account for over 80% of total giving in CECPâ€™s survey and nearly half are Fortune 100 companies. All figures are inflation-adjusted. A First-Look at 2009 Findings The tumultuous climate of 2009 needs no introduction. The stock market tumbled and rebounded, corporate profits started to climb towards pre-downturn levels, and global unemployment rates rose. At the beginning of 2009, corporate profits were not a foregone conclusion but by the end of the year, 54% of companies reported increased profit for the year. Within this year of ups and downs, a number of seemingly contradictory findings emerge. The majority of companies gave less, and aggregate total giving increased. Non-cash contributions flucutated widely, while corporate and foundation cash contributions reached their lowest point in four years. While the pairing of some of these findings may seem unusual, the full story of corporate giving in 2009 is brought to life with company-level insights into giving changes. Majority of Companies Give Less, as Some Companies Give a Lot More At the individual company level, 60% of companies within a matched-set gave less in 2009, with the majority of these companies decreasing giving by 10% or 40% Increase 54% more. This finding reverses the patterns seen in 2007 and 2008 where the 58% Giving Increase Increase majority of companies increased giving. Giving Giving
42% Decrease Giving
46% Decrease Giving
From 2006 to 2007
From 2007 to 2008
60% Decrease Giving
From 2008 to 2009
Company-wide spending constraints instituted on account of the economic pressures were cited frequently as a reason for decreased giving. Some companies referenced declines in foundation endowments and in some cases, reduced transfers of funds from the corporation to the foundation. Additional reasons for decreased giving included: the conclusion of multi-year grants; unrepeated donations of land or product; fewer international disasters requiring response; and declining participation in matching gift programs due to staff reductions.
While a majority of companies reduced their giving, 40% of companies increased their corporate contributions in 2009. Some of these increases were attributed to additional funding provided for programs serving basic health and community needs; other rises were supported by increased employee participation in matching gift programs, along with heightened caps for matched contributions. In fact, dramatic giving increases by a handful of companies caused aggregate total giving to rise in 2009. This shift was driven by increased non-cash contributions from pharmaceutical companies, along with 1
For more information on the Corporate Giving Standard (CGS) system or for details on how your company can become involved with this exciting measurement initiative, please contact Alison Rose at firstname.lastname@example.org. The Committee will post its annual public data analysis report, Giving in Numbers, 2010 Edition, for free download in summer 2010 at www.CorporatePhilanthropy.org, but in the meantime, the 2009 Edition is also available online.
expanded giving budgets resulting from corporate mergers and acquisitions. Nearly 70% of the mergers and acquisitions reported within the matched-set occurred in the Financial and Health Care industries. Non-Cash Giving Fluctuates as Cash Contributions Decline Within the four year period, non-cash donations emerge as the most volatile giving type in comparison with corporate and foundation cash giving. Reasons for variation in non-cash giving include: product donated one year and not the next; disaster relief supplies given in times of need; and pro bono service projects that depend on project availability and staffing. As such, non-cash donations can change substantially from year to year, depending on these circumstances. As an example of the magnitude of these shifts, from 2008 to 2009, half of the year-over-year changes in non-cash contributions fell outside of a range of -36% to +27%. While non-cash donations fluctuated, cash contributions declined. Almost two-thirds of companies reduced their foundation cash and corporate cash contributions. Aggregate cash giving continued to fall from its high in 2007 of $4.12 billion to a current level of $3.80 billion. Companies appeared to siphon cash donations to programs serving basic needs, namely Health & Social Services and Community & Economic Development programs, and reduced cash contributions elsewhere. A Majority of Companies Give Less and Aggregate Total Giving Rises Aggregates and medians are two common ways to look at changes in giving: an aggregate reflects the total giving in a particular year, and a median is an indication of the typical companyâ€™s contributions. Within this four-year set, aggregate giving rose 7% above 2008 levels, and median total giving receded to its lowest point. These results highlight the differences and limitations in these calculations; aggregate values are quite susceptible to changes at the extremes, while medians are dependent on the sorted order of a set. However, as shown in the aforementioned investigation into the company-level changes, a simple trend emerges: more companies gave less and a handful of companies gave a lot more. Aggregate Total Giving
Median Total Giving $9.93
N=95 Matched-Set Companies (2006, 2007, 2008, 2009), Inflation-Adjusted
The Forecast for 2010 Looking ahead, 20% of respondents were unable to predict 2010 giving levels, but 35% anticipated increases over 2009 levels, and 36% believed giving would remain flat.2 The predictions of increased giving were not limited to one industry in particular. 2
In 2009, 130 companies responded to the survey question on giving projections for 2010.
RESOURCES Junior Achievement of Central Virginia (www.jatoday.org) Through the help of a dedicated volunteer network, Junior Achievement educates and inspires young people to succeed in the global economy. Based on the pillars of work readiness, entrepreneurship, and financial literacy, JA reaches more than 22,000 local students annually. Several national studies confirm that Junior Achievement programs equip youth with the knowledge, skills, and attitudes necessary to successfully participate in a global economy. Visit www.jatoday. org for additional ethics resources including the 2007 Deloitte/Junior Achievement national poll results and a classroom handout on the Six Pillars of Character. JA Student Center (studentcenter.ja.org) JA Student Center is an online tool geared to help students become workforce ready. Students can search for colleges, seek out financial aid, gain knowledge on how to handle their money, explore careers they are interested in, get tips on how to start a business, learn more about the importance of ethics, and much more. Better Business Bureau (www.bbb.org nationwide or local BBB www.richmond.bbb.org) The Better Business Bureau is a private non-profit organization that promotes and fosters ethical business practices. The BBB system has proven that the majority of marketplace problems can be solved fairly through the use of voluntary self-regulation and consumer education. A network of local Better Business Bureaus serves all major population centers in North America offering service to their customers: the consuming public and business community. Centre for Applied Ethics (www.ethics.ubc.ca) The Centre was formally created in 1993 by the University of British Columbia’s Board of Governors as an independent unit in the Faculty of Graduate Studies. It is primarily an interdisciplinary research centre which studies a diverse range of topics, including health care practices, business and professional procedures, new information technologies and environmental issues.
Character Counts (www.charactercounts.org) The purpose of the CHARACTER COUNTS! Coalition is to fortify the lives of America’s young people with ethical values called the “Six Pillars of Character.” These values, which transcend divisions of race, creed, politics, gender and wealth, are: trustworthiness, respect, responsibility, fairness, caring and citizenship. Character Education Partnership (CEP) (www.character.org) The CEP is a nonpartisan coalition of organizations and individuals dedicated to developing moral character and civic virtue in our nation’s youth as one means of creating a more compassionate and responsible society.
The Chronicle of Philanthropy (http://philanthropy.com/) The Chronicle of Philanthropy is the No. 1 news source, in print and online, for nonprofit leaders, fund raisers, grant makers, and other people involved in the philanthropic enterprise. For more than 20 years, The Chronicle has been connecting the nonprofit world with news, jobs, and ideas. The Chronicle provides news and information for executives of tax-exempt organizations in health, education, religion, the arts, social services, and other fields, as well as fund raisers, professional employees of foundations, institutional investors, corporate grant makers, and charity donors. Along with news, it offers such service features as lists of grants, fundraising ideas and techniques, statistics, reports on tax and court rulings, summaries of books, and a calendar of events. Committee Encouraging Corporate Philanthropy
The Committee Encouraging Corporate Philanthropy is the only international forum of business CEOs and chairpersons focused exclusively on corporate philanthropy. CECP’s mission is to lead the business community in raising the level and quality of corporate philanthropy. We offer our members essential resources,
including a proprietary online benchmarking tool, networking programs, research, and opportunities for bestpractice sharing. CECP believes that discipline applies to philanthropy, like any other business function. When companies demonstrate programmatic effectiveness, fiscal accountability, and good stewardship in their philanthropic programs, society and business both stand to benefit greatly. Through innovative programs like those aimed at eradicating disease or raising childhood literacy rates, companies can also improve employee retention and heighten brand recognition. Educators for Social Responsibility (www.esrnational.org) ESR fosters ethical, emotional, and social developments through its support of schools, families, and children. It is recognized for its role in social and emotional learning, character education, conflict resolution, violence prevention, and intergroup relations. ESR offers comprehensive programs, resources, and training for adults who teach children at every developmental levelâ€“ preschool through high school. Ethics Resource Center (www.ethics.org) The Ethics Resource Center (ERC) is a nonprofit, nonpartisan educational organization whose vision is an ethical world. The mission of the Ethics Resource Center is to be a leader and a catalyst in fostering ethical practices in individuals and institutions.
International Society of Business, Economics, and Ethics (ISBEE) (www.isbee.org) The International Society of Business, Economics, and Ethics (ISBEE) is a world-wide professional association that focuses on the study of business, economics, and ethics. Josephson Institute of Ethics (www.josephsoninstitute.org)
The Joseph & Edna Josephson Institute of Ethics is a publicbenefit, nonpartisan, nonprofit membership organization founded by Michael Josephson in honor of his parents to improve the ethical quality of society by advocating principled reasoning and ethical decision making.
Society for Business Ethics (www.societyforbusinessethics.org)
The Society for Business Ethics (SBE) is an international organization of scholars engaged in the academic study of business ethics and others with interest in the field.
To inspire and prepare young people to succeed in a global economy.
To be recognized by businesses, educators and policy makers around the world as the premier organization for inspiring and preparing young people to become successful, contributing members of the global society, and for uniting people of all nations around the common goals of creating jobs, building stable economies, and providing higher standards of living.
4600 Cox Road Suite 107 Glen Allen, Virginia 23060 804.217.8855 www.jatoday.org