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Reimbursement Policy

An organization’s policy should be to reimburse employees and volunteers for necessary and reasonable travel expenses incurred for authorized business. The intent of the policy should be that reimbursement is fair and equitable to both the traveler and the organization and consistent with federal regulations. Individuals traveling on business are responsible for complying with travel policies of the organization and should exercise the same care in incurring expenses as they would in personal travel.

For instance, nonprofit’s reimbursement policies often include provisions such as the following:

• Approval Authority – Authority and responsibility for approving travel by employees and volunteers of the organization rests with the person responsible for the account/activity to which the expense is to be charged.
• Economical Transportation Required – To be fully reimbursed by the organization, the traveler must use the most economical mode of transportation available, consistent with the authorized purpose of the trip.
• Private Automobile
  • Expenses Allowed – The organization should pay a standard rate per mile for official travel by private automobile based on the actual driving distance by the most direct route. Organizations can use the mileage listed on Google Maps or other similar web tools as a guide to determine the mileage.
  • Standard Mileage Allowance – The standard mileage allowance is in lieu of all actual automobile expenses such as fuel and lubrication, towing charges, physical damage to the vehicle, repairs, replacements, tires, depreciation, insurance, etc. The 2018 IRS Standard Mileage Rate is 0.545 cents per mile.
  • Automobile-related Expenses – In addition to the standard mileage allowance, necessary and reasonable charges for the following automobile-related expenses are allowed: tolls, ferries, parking, bridges, and tunnels. Traffic ticket and parking ticket expenses should not be reimbursed.

• Airline Travel
  • Lowest Available Airfare – Employees and volunteers traveling on business should travel at the lowest available airfare to accommodate the purpose of the business trip.

• Meals and Lodging

The traveler may be reimbursed for the actual costs of reasonable and necessary meals, lodging, and gratuities. Reimbursement of meals when there is no overnight travel should be paid by the organization only when the meal has a defined business purpose.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Employers are not obliged to give severance pay. The law only requires an employer to give severance if it has been promised in a contract, or stated in an employee handbook, or if there is an established pattern of giving severance to other employees in similar circumstances.

Some employers choose to offer severance pay to employees who are terminated, either involuntarily or voluntarily. The primary reasons for offering a severance package are to soften the blow of an involuntary termination and to avoid future lawsuits by having the employee sign a release in exchange for the severance.

Common benefits in severance packages include:

• Salary continuation—usually an amount based on years of service and/or position.
• Insurance benefits—while a company’s insurance plan may not allow a terminated employee to remain on the group health plan, COBRA benefits may apply and the company may pay the COBRA premium (or a portion thereof) for a specified period of time.
• Uncontested unemployment benefits—an employer may agree to not challenge a departing employee’s application for unemployment benefits.
• Outplacement services—assistance with finding a new job.
• References—an agreement on what information will be disclosed to future employers.

According to a 2009 survey by Hewitt Associates, more than half (51 percent) of companies offer a standard one-to-two weeks of pay for every year of service and another third (33 percent) vary their payouts based on a formula that typically combines years of service, salary level and/or grade.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

All employers should expect their employees to meet established standards of attendance, performance, and conduct.

If, after going through the performance appraisal process, employees cannot or will not improve their poor performance, the next resort for a manager is progressive discipline. In a progressive discipline system, the disciplinary measures range from mild to severe depending on the nature and frequency of the employee’s misconduct. An employee moves through the system like climbing a ladder, moving up rung by rung to more intense disciplinary measures until the employee improves or is fired.

There are four steps in a progressive discipline system: informal notices, written reprimands and counseling, suspension, and termination.

Although its name implies punishment, progressive discipline is more about communication between you and employees than it is about punishment. No matter where an employee is on the progressive discipline ladder, how you hand down the discipline can be as important as the discipline itself.

A progressive discipline system can shield you from liability in a lawsuit because it treats employees fairly and because it requires you to document employee misconduct and your response to it every step of the way.” (DelPo, Amy. The Performance Appraisal Handbook. Nolo Press, 2005. p. 7/2).

Of course, there are many ways to institute progressive discipline. One of the most effective means is to introduce a performance plan that lets the employee know exactly what is expected of him/her each week and allows the employer an opportunity to review the employee’s performance on a frequent basis. Finally, if the employee’s performance fails to improve, it may become necessary to terminate the employee. It is best to seek expert advice at that point to ensure you have done everything possible to protect your organization.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

It is a good idea to have a formal orientation program so that all newly hired employees get the same treatment and information. This orientation period will probably last several weeks. You will want to be both welcoming to your new employee, and attentive to legal requirements.

Elements of an employee orientation include:

• Personalize the workspace
• Orient the employee to the office: how equipment works, description of procedures, etc.
• Introduce the new employee to all the staff, volunteers, relevant community members, etc.
• Schedule lunch with the supervisor and relevant staff the first week
• Explain benefits; fill out relevant forms
• Fill out other forms required by the government: Employment Eligibility Verification (Form I-9), Employee’s Withholding Allowance Certificate (Form W-4), New Hire Reporting Form, and Consents for Release of Information (if doing a background check)

Introduce the employee handbook; review policies; give a copy to the employee and obtain signed acknowledgment that employee received the employee handbook, as well as any other acknowledgments that need to be signed

• Explain performance evaluation process
• Highlight required employment posters

The Standards for Excellence® Institute’s Model Employee Handbook is designed to be used as a resource to provide you with ideas, suggestions, and guidelines which may be valuable to your organization as a starting point or useful comparison for your own employee handbook.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

1. The IRS will make its own assessment of whether a person is an employee or independent contractor of an organization based on the level of control the employer has over that hired person’s conduct and work. It is important for the organization to evaluate carefully before deciding how to treat the hired person. The board needs to make the right call because directors can be held personally liable for failure to pay payroll taxes, if the hired person is an employee as opposed to an independent contractor, who is responsible for his/her own employment taxes. (As a related note, the board should ensure they have general liability and D&O insurance in place.
2. The board will also want to be able to demonstrate that it engaged in a reasonable hiring process, and that other candidates were considered for the position. This will help to eliminate the appearance of a conflict of interest for the new hire/former board member. (We should confirm they have a COI Policy in place.) This is especially true in the case of founding directors, who have a high level of personal investment and identification with the new nonprofit.
3. As always, it is best to have a solid job description in place before making a hire.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

An annual audit is an examination of an organization’s financial systems and transactions at the end of a year by an independent, certified, professional auditor. The audit assesses whether or not financial statements have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) or Other Comprehensive Basis of Accounting commonly referred to as OCBOA. The audit is an assessment or professional judgment of the financial statements prepared by an organization’s management. An auditor seeks to understand the nature of an organization, reviews and evaluates internal control procedures, confirms major transactions and balances, and tests underlying accounting records. An audit states the opinion that financial statements accurately reflect the finances of an organization.

An audit may identify weaknesses in an organization’s internal control system which the organization can accept and incorporate improvements into its practices and procedures.

Many organizations are subject to special requirements for audits depending on their geographic location and/or their funding sources. In Maryland, if a charitable nonprofit receives charitable contributions equal to or exceeding $500,000, an audit must be performed and submitted to the Office of the Secretary of State along with its annual charitable solicitation registration form. In other states, the requirements may be higher or lower. Some organizations have a by-law provision requiring an audit. Others are required to complete an audit because their funding sources (i.e., United Way or a government entity) require an audit. The Standards for Excellence® program calls for audits to be performed for organizations with budgets over $500,000.

There are many variables that determine how much an audit will cost. If you circulate a request for proposal (RFP), most auditing firms will keep their quotes competitive. The cost of an audit will depend on such factors as the size of the organization, the complexity of the organization, the existence of internal controls, and record keeping practices.

Want access to resources on budgeting, financial policies, personnel policies, and risk management? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Nonprofits should represent the interests of the people they serve through public education and public policy advocacy, as well as by encouraging board members, staff, volunteers, and stakeholders to participate in the public affairs of the community. When appropriate to advance the organization’s mission, nonprofits should engage in promoting public participation in community affairs and elections. As such, they should communicate in an effective manner to educate, inform, and engage the public. Information about the organization’s mission, program activities, finances, board members, and staff should be easily accessible, accurate, and timely.

An organization should include its organizational purpose and highlight the organization’s programs over the past year in the annual report. Why are annual reports necessary? Nonprofits depend on public trust to survive and thrive. Public trust can be achieved by greater transparency in the operations of a nonprofit organization. One way a nonprofit can accomplish transparency is through the publication of an annual report.

An annual report is a valuable tool for communication with past, current and future donors to your organization. It can also help the public assess the performance of an organization. An annual report gives you a chance to put your organization’s best foot forward, while creating a historical record of activities and accomplishments.

Annual reports should be designed and formatted to grab the readers’ attention and keep them interested. Many people who read annual reports just flip through them and gather impressions quickly. If possible, use graphics and/or photographs to help carry your organization’s message.

Many nonprofits have moved to including the information typically included in an annual report at the organization’s website. The information should be easily accessible and easy to find on the website.

An nonprofit’s annual report should consist of:

• Mission Statement: An organization’s mission is its statement of purpose. The mission statement summarizes what an organizations does and what it aspires to be.

• Program Activities: An annual report provides the opportunity for an organization to describe the past year’s programmatic efforts and achievements. This section should be clear as to what the organization has accomplished. Program successes and highlights, new and on-going programs, and grants or awards received should be included in this section.

• Financial Statement: Financial information is crucial to any annual report. The financial data included in an annual report usually consists of a statement of financial position or balance sheet of assets and liabilities and an income and expense breakdown for the fiscal year the annual report covers. Some organizations include their entire audited financial statement, but this is not required. Yearly financial data may include a summary of an organization’s total revenue, gains, and other support, and total expenses from the past fiscal year. Financial data in an annual report should also include a summary statement of financial position. Financial reports may also outline the amounts and percentages of the organization’s total revenue (grants and charitable contributions, member services, investment income, special events, and/or other sources that apply to that organization). Many organizations present financial data in charts or graphs so they are more easily understood. It is very important to make a connection between mission/program activities and expenses, as reported in the financial data. Some organizations use similar headings for the program activities and breakdown of the financial data.

• Names of Board Members and Management Staff: Names of an organization’s board members and management staff should be included in the annual report to publicly identify who is responsible for the organizational programs and activities, and who can be contacted regarding inquires.

In compiling an annual report, some organizations go further to include such optional information as:

• A personal letter from the organization’s leaders
• Recognition of donors
• A discussion of the organization’s vision and future plans

It is important to remember that when discussing the future, the difference between current activity and future plans/intentions must be clear. The annual report must accurately represent the activities of the period covered by the report.

Keep in mind that an annual report does not need to be long or printed on flashy paper. Annual reports take many forms (online, pdfs, or print) and the content you provide is what’s most important. Be creative!

Want access to resources on public documents, advocacy, lobbying, and public policy? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Nonprofits enjoy the public’s trust, and therefore must comply with a diverse array of legal and regulatory requirements. Organizations should conduct periodic reviews to address regulatory and fiduciary concerns. One of leadership’s fundamental responsibilities is to ensure that the organization governs and operates in an ethical and legal manner. Fostering exemplary conduct is one of the most effective means of developing internal and external trust as well as preventing misconduct. Moreover, to honor the trust that the public has given them, nonprofits have an obligation to go beyond legal requirements and embrace the highest ethical practices. Nonprofit board, staff, and volunteers must act in the best interest of the organization, rather than in furtherance of personal interests or the interests of third parties. A nonprofit should have policies in place, and should routinely and systematically implement those policies, to prevent actual, potential, or perceived conflicts of interest. In this way, ethics and compliance reinforce each other.

Yes, all nonprofits should have a board-approved conflict of interest policy. The policy should be applicable to all board members and staff, and to volunteers who have significant independent decision-making authority regarding the resources of the organization. The policy should identify the types of conduct or transactions that raise conflict of interest concerns, should set forth procedures for disclosure of actual or potential conflicts, and should provide for review of individual transactions by the uninvolved members of the board of directors.

Nonprofits should provide board members, staff, and volunteers with a conflict of interest statement with a summary of the policy and itemized questions to submit upon joining the organization and then annually to disclose any conflicts.

As part of the application for tax exempt status (Form 1023), the Internal Revenue Service includes a series of questions about conflicts of interest and insider transactions to a more extensive series of questions about past, present, or planned relationships, transactions, or agreements with officers, directors, trustees, and the highest compensated employees and independent contractors.

The Form 990 also asks if the organization has a written conflict of interest policy; if officers, directors, trustees and key employees are required to disclose conflicts under the policy; and, how the organization consistently monitors and enforces the conflict of interest policy. Although not required by federal tax law, the Form 990 also requests information as to whether an organization makes its conflicts of interest policy available to the public.

Want access to resources like our Sample Conflict of Interest Policy and Disclosure Statement and our Conflicts of Interest Educational Resource Packet? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Nonprofits enjoy the public’s trust, and therefore must comply with a diverse array of legal and regulatory requirements. Organizations should conduct periodic reviews to address regulatory and fiduciary concerns. One of leadership’s fundamental responsibilities is to ensure that the organization governs and operates in an ethical and legal manner. Fostering exemplary conduct is one of the most effective means of developing internal and external trust as well as preventing misconduct. Moreover, to honor the trust that the public has given them, nonprofits have an obligation to go beyond legal requirements and embrace the highest ethical practices. Nonprofit board, staff, and volunteers must act in the best interest of the organization, rather than in furtherance of personal interests or the interests of third parties. A nonprofit should have policies in place, and should routinely and systematically implement those policies, to prevent actual, potential, or perceived conflicts of interest. In this way, ethics and compliance reinforce each other.

A conflict of interest exists where the interests or concerns of a key insider (such as a board member, employee, or volunteer, or their family member) are seen as competing with the interests or concerns of the nonprofit organization. A sound conflict of interest policy should identify the types of conduct or transactions that raise conflict of interest concerns.

Most common are situations where the insider has a financial interest in the actions of the organization. For example, the potential for a conflict exists where an organization contracts to purchase or lease goods, services, or property from an insider. Conflicts are, however, not limited to situations involving direct, financial interests. A conflict may also exist where an insider obtains a benefit or advantage that s/he would not have obtained without her/his relationship with the organization.

The key word to be used as a benchmark in questionable situations is benefit: would the employee or board member (as an insider to the organization) benefit in an inappropriate way from a certain action or decision being made by the organization?

The fact that a conflict exists does not necessarily mean that the organization shouldn’t proceed with a specific action or transaction. In most instances, there is nothing unlawful about an organization transacting business with an insider. Rather, what is important in these circumstances is assuring that such transactions are scrutinized to determine whether the action or transaction is in the best interests of the organization. Furthermore, transactions should be scrutinized for any potential negative impact it might have on the nonprofit’s reputation.

Want access to resources like our Sample Conflict of Interest Policy and Disclosure Statement and our Conflicts of Interest Educational Resource Packet? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.

Best practices suggest that it is not a good idea to have the Executive Director playing such a role within the organization, whether the position is a voting or non-voting position. Keep in mind the following precautions if the organization decides to place its executive director on the board:

• While it is not uncommon for executive directors to serve as non-voting members of their organizations’ boards, this can lead to a tricky legal situation. Board members are bound by legal and fiduciary obligations. A non-voting board member is still held to these standards but does not have all the legal protections afforded to a full board member with voting privileges.

• If an organization appoints an employee of its organization to serve as a voting member of their board of directors, appropriate policies must be in place to avoid conflicts of interest and to make sure that the employee does not exert undue influence.

Typically, an executive director attends and participates in board meetings as an advisor. However, it may not be appropriate for the ED to participate in meetings when issues arise that directly affect him or her, such as personnel matters. For example, it might not be appropriate for the ED to participate in some benefits discussions because he or she may benefit from the outcome of the decision. Executive directors have an important role to play in advising the board, but their level of participation should be carefully evaluated.

There is a segment of the nonprofit sector that has its executive director/president/CEO serving as a voting member of the board of directors. It is more prevalent that the executive director/president/CEO serves in a role that is ex-officio and without a vote.  

Every other year, BoardSource does a big survey of nonprofit boards. Last year, their report was called Leading with Intent: A National Index of Nonprofit Board Practices. You can find the section on the CEO as voting member of the board under Leading with Intent: Data at a Glance on page 52 of the document. In Leading with Intent, overall, 12 % of the respondents reported that the CEO was a voting member of the board. They break this statistic down into groups for budget size, type, service area, and affiliation.

The nonprofits with budgets of over $10 million are most likely to have their CEO as a voting member of the board (21 %) and the associations (rather than charity, foundation and other) clock in at 17 %. Interestingly, nonprofits that serve in the international service area, report that 33 % of their CEOs serve as voting board members.

For access to our Board and Executive Partnership Educational Resource Packet, join the Standards for Excellence Institute! Located in Maryland? Join the Standards for Excellence Institute. Located in Maryland? Join Maryland Nonprofits for these resources and more!

From the Standards for Excellence®: An Ethics and Accountability Code for the Nonprofit Sector. The Standards for Excellence code, developed by the Standards for Excellence Institute, includes specific benchmarks and measures that provide a structured approach to building capacity, accountability, and sustainability in your nonprofit organization. The code identifies 6 major areas of nonprofit governance and management: Mission, Strategy, and Evaluation; Leadership: Board, Staff, and Volunteers; Legal Compliance and Ethics; Finance and Operations; Resource Development and Fundraising; and Public Awareness, Engagement and Advocacy.

The Standards for Excellence® Institute, a program of Maryland Nonprofits, provides the best possible resources to nonprofits nationwide, helping build their capacity to effectively and efficiently meet the needs of their communities. Members of the Standards for Excellence Institute gain access to an online community with an expansive library of resources and customizable templates. The Institute also offers nonprofit accreditation and recognition, a national network of consultants licensed to provide training on the Code, and professional volunteer opportunities.