If she donated $1,000 for a school to buy products, she would hit her million-dollar goal.

Mary Kantarian was achingly close to making her million-dollar sales goal — only $1,000 short. If she made the goal by the end of the year, it would mean a fat $10,000 bonus check, and a happy trip to the bank to finance a dream home she’d recently found. Other sales reps also were close, and one had already made the bonus. The books would close in just a few days, but at the end of the year her clients weren’t in a buying mood.

Still, Mary had one hope: inner-city Lincoln High School. Its students, who often had to share textbooks, could really use her company’s multimedia educational aids, but Lincoln had no discretionary budget for new teaching materials. What if Mary donated the money to this needy school for the purchase, and put herself over the magic quota?

Or perhaps she could offer partial “donations” to close sales at several schools. She would then surpass her quota goal with room to spare. The Lincoln school or other needy schools would gain immensely valuable educational programs that would help them serve their students, her company would pick up sales revenue, and she would meet her sales quota. Even better, she would earn a cool $10,000 on an investment of $1,000.

At first thought, this seemed like a win-win solution. But the idea needled Mary’s conscience. The more she thought about it, the more something about it bothered her. Yet if she didn’t close this “sale” — one which would help out disadvantaged students — she wouldn’t make that bonus, and her dream house would remain out of reach. She found herself wondering, What should she do?

Richard Burch, Adjunct Professor, Fairfield University Program
in Applied Ethics, Fairfield, Conn.

MARY SHOULD FIND BETTER WAYS to help Lincoln H.S. find the funds. Are there other corporate sponsors or community funds available? Could she pursue a school fund-raiser, or government grant? As an alternative, Mary could seek out more qualified prospects, or ask current customers to increase an order.

Trying to pull off the proposed “donation” scheme would be no easy task. Product donations usually have to be without strings. Cash gifts will buy what’s needed most, like textbooks, not multimedia aids. Also, school systems, like corporations, have formal purchasing procedures, including sign-off points in the purchase-order process that uncover kickbacks and bribes disguised as donations.

Each rep knew where the others stood. What would be their reactions when they found out Mary made her quota this way? And what if everyone did this? What would be the impact on the company, other sales people, and other schools that would want the same special consideration? And what good is a customer who next time around expects the same deal?

Aside from the possible consequences of this deal, Kant would remind us we should do the right thing for the right reason. Mary is under a moral obligation to act loyally and to protect the legitimate interests of her employer. She should act in the interests of those who depend on her, even if those interests aren’t always the same as her own.

What Actually Happened

Mary decided not to pursue offering Lincoln High School a donation. She wasn’t comfortable with the idea, and she knew that her sales manager and superiors all the way up the line would object, on both ethical and practical grounds. Mary didn’t make her bonus. But her reputation as a hard worker who maintains her integrity under pressure led to a promotion and higher pay two years later.

Shel Horowitz (shel@principledprofits.com) is author of Principled Profit: Marketing That Puts People First, and a Hadley, Mass., consultant in marketing who initiated the Business Ethics Pledge movement; www.principledprofits.com.

By Shel Horowitz

It wasn’t a story Roger Harris relished seeing on the front page of the local paper.  As communications director for a non-profit group of hospitals that prided itself on serving charity cases, he winced as he read.  Elaine Peters, an 82-year-old living on Social Security, had seen half her monthly income vanish without her permission – garnished from her checking account by the hospital’s collection agency.

In Minnespta, debt collectors were legally permitted to dip into bank accounts without filing a lawsuit or obtaining court approval, even for medical debts.  But such collections couldn’t be made from those relying on government aid.  In this case, Peters – who was uninsured – had disputed the bill years earlier, and thought she’d settled it.  Now she was talking to a reporter.  And the attorney general.

As Harris put the paper down, he turned to memos about the AG investigation underway, plus class-action lawsuits alleging harassment.  How should the health care system respond?

Ned Barnett, CEO, Barnett Marketing Communications, former hospital PR director, Las Vegas, Nev.

Having worked for hospitals for 25 years – on management boards that dealt with these kinds of problems – I would emphasize the hospital should not have a policy of going after Social Security income.

If the collections agency made a slip-up, the hospital should write off this woman’s debt.  It could also set up a donor fund (through the hospital auxiliary) to cover such bills, and might work with local churches to help boost this fund.  The hospital could work behind the scenes to help such a person file for bankruptcy, or obtain a reverse mortgage.  It can also put a lien on her estate, so it can recover from heirs.

For a hospital settled in its community, the bad image from taking such a person’s Social Security is far more costly than any money recovered.  The fact is, hospitals write off millions.  A few more would be nothing.

In this case, business ethics and being good to people coincide.  Because hospitals save lives, they need not apologize about recovering legitimate debts, especially if the alternative is throwing the burden onto taxpayers.  But there are times (this is one) when it makes sense to bite the bullet.

What Actually Happened

Like all “What Would You Do?” cases, this one is real.  Since it appeared in the press, we’re revealing that the hospital is part of Fairview Health Services in Minneapolis.  “Elaine Peters” is Elsie Iverson, one of many Fairview charity patients alleging high-pressured collection tactics.  Iverson got her money back, while other charity patients had to go to court.  The story appeared in the Minneapolis Star-Tribune, Dec. 19, 2004.

Fairview spokesperson Ryan Davenport (the fictional “Roger Harris”) said the hospital welcomed the investigation – which went beyond Fairview to affect over 80 hospitals – as an opportunity to make things right.  Fairview was reviewing each case.  It had always taken steps to assure patients in need were considered for charity care: posting policies at entryways, offering sliding fees, and working to enroll needy patients in support programs.  “We have no set limit on the amount of charity care we can provide each year.  All of our patients deserve to be treated with respect and dignity,” Davenport said.  “One of our challenges is distinguishing between those who do not have the means and those who have the means and choose not to pay.”

He added, “Two-thirds of the patients who come in without insurance go away with insurance, because we’ve helped them enroll.”  He said a federal judge dismissed a class-action against Fairview, although a state court case has yet to be heard.

How much oversight does Fairview give the collection agency?  “The agency has to operate ethically and legally,” he said.  “We have a dialogue on any outstanding accounts.”  It’s not unusual for the business office to reclaim an account or write it off.  Will pre-emptive garnishment continue?  “We’ve asked the collection agency to stop that practice while we’re reviewing,” Davenport said.

Shel Horowitz (shel@principledprofits.com) is author of Principled Profit: Marketing That Puts People First, and a Hadley, Mass., consultant in marketing who initiated the Business Ethics Pledge movement; www.principledprofits.com.

This article was originally published in the Spring 2005 edition of Business Ethics magazine.