The main ethical issue will be NKF mismanaging the funds primarily

donated from the public. NKF has been using the media and campaigns to garner
donations aggressively. Most donors donate assuming that majority of their
money will go to the cost of kidney dialysis for needy patients, as this is primarily
advocated on the media. However, only 56percent of the donations went to the
patients, which was lesser than the donors’ expectations. Unethical practice is
present as funds not managed as advocated due to indulgence in unnecessary
peripherals like CEO flying first class and excessive campaigning.

On the other hand, viewing from the perspective of the organization, the
situation can be ethical. Although the company had a massive pool of reserves,
consistent donations are still required to ensure seamless support to the patients
and administration. Though excessive funds may have been used for
campaigning services, it can be viewed as a mean to garner more donations that
is beneficial to the patients in the long run. High remunerations may also act as a
positive incentive for staffs to work harder and bring in more benefits to the
organization. Thus this issue can be a dilemma as it can be viewed from different
perspectives.

NKF being a charitable organization, received majority of its funding from

the donors, which constitutes as the major stakeholder. The financial burden of
the patients constitutes the primary interest of the donors. Future funding of
campaigning events will be of little relevance to donors as there is no immediate
benefits to the patients. Donors, feeling betrayed, will reduce current donations.
Donors will be more skeptical towards charitable organization in the long run.

Staffs in the organization are key stakeholders as they have immediate

control over the allocation funds. Similar to the donors, wellbeing of the patients
is one of the primary concerns. Personal remuneration packages are of
reasonable importance to them. Staffs will be more motivated if greater
proportion of funds is set for attractive remunerations. However, in the long run,
remunerations will be under immense scrutiny leading to implementation of
stringent regulations to keep incentives in check, causing negative emotions in
the organization.

Patients being the main beneficiaries of the organization constitutes as

key stakeholders. The amount of subsidiary they received will be their primary
concern. Allocation of donations to finance fund-raising and remunerate
executives will decrease the potential funds to them. However, they might
benefit more in the long run as executives will be more motivated to source for
more donations, which can benefit future patients.

Utilitarianism suggests that by financing fundraising campaigns and

remunerate executives can benefit more people especially the donors. Though
funds are not managed in the expected way, more patients will benefit in the
long run as executives are motivated to source for more donations. More parties,
patients especially, will benefit from the diverse allocation of funds. Decision will
be deemed ethical as long as the greatest number of people that benefit from it
even though the means of attaining the donations may not be seen as ethical
from the perspective of the donors.
 Using the conventional approach, the decision of allocating a fair amount
of funds to remunerate and fundraise may be deemed as ethical as it is the social
norm. Remunerating top management is especially prevalent in our current
society when the organization is doing exceptionally well, which is valid in the
scenario as vast funds are raised. Investing in fundraising projects ensure
sustainability of the organization as potential growth can be equally important as
present result.

Deontology suggests that even though more donors can potentially

benefit from the controversial allocation of funds, it is still deemed unethical as
long as the funds are not allocated as advocated. Donors donate with believes
that their funds will benefit the patients directly as advocated through the media.
Even though by funding campaigns may result in greater benefits for more
parties, deontology states that it is still unethical as the means differ from what is
advocated by the company.

The motive behind aggressive campaigning is unknown. Cynics may view

the CEO as egoistic and trying to garner much surplus to prove his own
capability and his indispensability to the organization. Optimist may view that
the enthusiasm in fundraising is genuinely for the greater good of the patients
and not for their own benefits. Using the deontology approach, the former may
be deem as unethical as the intent of fundraise is to benefit self rather than the
entire community. For the later, it can be ethical as the intent is to benefit the
patients than to self.

Quantifying the efforts of the management relative to their remunerations

may not be that straightforward. Paying CEO $25000 monthly can be outrageous
when compared to the average of the working population. However if viewed in
the perspective of the outstanding results he achieved, it may be justified. Thus
paying high remunerations to management can be ethical from the perspective
of distributive justice. The efforts and performance of the management warrant
more incentives.

NKF saga was a result of conflicting interests from various stakeholders.

Donors are keener on helping out the patients whereas the organization is more
self-orientated. Hidden agendas of the management further intensify the
divergence. The board should comprise of various key stakeholders to ensure
decisions are made on a consensus basis and not, in this case, on a hierarchical
structure with the CEO having the dominant say. Greater transparency will be
present and individual rights of major stakeholders will not be compromised.

Lack of accountability encouraged management to indulge in extravagant

spending that is of contrary to other stakeholders’ interest. No decent regulatory
party was present to keep the management in check. Probing of spending from
the public was also deterred, as it will probably end up with a losing lawsuit.
Implementation of formal remuneration policies and thorough HR policies on
staff benefits will minimize disputes and exploitation of interest of various
stakeholders.