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Disaster Relief, a charitable organization, has a standing agreement with City Bank. The agreement allows Disaster Relief to overdraw its cash balance at the bank

Disaster Relief, a charitable organization, has a standing agreement with City Bank. The agreement allows Disaster Relief to overdraw its cash balance at the bank when donations are running low. In the past, Disaster Relief managed funds wisely and rarely used this privilege. Steven Jacobs has recently become the president of Disaster Relief. To expand operations, Jacobs acquired office equipment and spent large amounts on fundraising. During his presidency, Disaster Relief has maintained a negative bank balance of approximately $10,000.

  • What is the ethical issue in this situation?
  • How could carrying a negative bank balance affect the organization?
  • State why you approve or disapprove of how Jacobs manages Disaster Relief's funds.

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