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It is probably no surprise that 2009 saw an extraordinary increase in nonprofit organizations that adopted or changed their organizational policies.  According to Grant Thorton’s 2009 National Board Governance Survey for Not-for-Profit Organizations, this change is a direct result of the new Form 990 that questions nonprofits’ governance policies and practices.  Because the IRS has made transparency in nonprofit governance compulsory, 39% of organizations adopted investment policies, 32% record-retention policies, 26% have adopted whistleblower policies, and over half now have the board or a board committee review the Form 990 before it is filed.  Nonprofit boards have also become more diligent about executive supervision, particularly, exercising oversight when it comes to monitoring executive compensation.  These are all topics and issues that the Standards for Excellence:  An Ethics and Accountability Code for the Nonprofit Sector® has encouraged organizations to give attention to for over 10 years.

If you are among the organizations dashing to implement new governance policies, the Standards for Excellence Institute® can keep you from reinventing the wheel, and more importantly, save you time and money.  Institute’s educational resource packet, “IRS Form 990 Governance and Management Policy Compendium” provides an easily digested list of all policies that the IRS inquires about. The 22 other Educational Resources Packets include samples of all recommended policies.  Institute members are encouraged to download these policies and adopt them to your particular circumstances. 

To read the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® or to order copies, please click here.  Discounts available for bulk orders.

With the advent of social media in nonprofits, the Standards for Excellence Institute® has received several requests for resources and assistance in handling the benefits and challenges of social media.

At this time, we are in the midst of convening a taskforce of industry experts to explore issues related to technology.  As part of that effort, we are exploring the idea that we should consider a new technology performance indicator for the Standards for Excellence® code and a potentially a new educational resource packet as well.  If you have ideas on how the Standards can be improved in this focus area, please forward suggestions to me at acmadsen@standardsforexcellenceinstitute.org.

As organizations consider their own guidelines and policies around social media, they will want to be sure to keep the best practices outlined in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® in mind. 

•  In providing its programs or services, a nonprofit should act with the utmost professionalism and treat persons served with respect. Where appropriate, a nonprofit should have policies in place that protect the confidentiality of personal information and should provide a grievance procedure to address complaints.   Nonprofits should regularly monitor the satisfaction of program participants.  (From Section I of the Standards for Excellence® code, Mission and Program).
• A nonprofit should have written personnel policies and procedures, approved by the board of directors, governing the work and actions of all employees and volunteers of the organization.   In addition to covering basic elements of the employment relationship (e.g. working conditions, employee benefits, vacation and sick leave), the policies should address employee evaluation, supervision, hiring and firing, grievance procedures, employee growth and development, confidentiality of employee, and client and organization records and information. (From Section IV of the Standards for Excellence® code, Human Resources)
• An organization should provide employees a confidential means to report suspected financial impropriety or misuse of organization resources and should have in place a policy prohibiting retaliation against persons reporting improprieties. (From Section V of the Standards for Excellence® code, Finance and Legal)
• Nonprofits should provide members of the public who express an interest in the affairs of the organization with a meaningful opportunity to communicate with an appropriate representative of the organization. (From Section VI of the Standards for Excellence® code, Openness)
• Nonprofits should have at least one staff member who is responsible to assure that the organization is complying with both the letter and the spirit of Federal and state laws that require disclosure of information to members of the public. (From Section VI of the Standards for Excellence® code, Openness) 
• Nonprofits should respect the privacy of donors and safeguard the confidentiality of information that a donor reasonably would expect to be private. (From Section VII of the Standards for Excellence® code, Fundraising)

For copies of the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector®, please click here.  http://www.standardsforexcellenceinstitute.org/public/html/explore_c.html  Discounts available for bulk orders.

The Ethics Resource Center just released its 2009 National Business Ethics Survey/Ethics in the Recession, in which they describe as the “most exacting longitudinal research effort examining organizational ethics from the employee perspective.”  This longitudinal survey looks at national trends and tracks views of employees from all levels within organizations.  Responses for this survey included 2,852 employees in for-profit organizations.

The report highlights a host of findings, including, just to name a few: (1) more employees reported they had reported misconduct when they observed it—this percentage was 58% in 2007 and increased to 63 % in 2009, (2) fewer employees noted that they witnessed misconduct on the job (56 % in 2007 and 49 % in 2009), (3) the perceived pressure by employees to commit an ethics violation declined from 10 % in 2007 to 8 % in 2009.  On the other hand, retaliation against those who reported misconduct rose 3 percentage points since 2007. 

Many of the results, particularly in these economic times, are encouraging to say the least.  While the report targets employees of for-profit organizations, it reinforces the idea that nonprofits should do all that they can to foster an environment dedicated to strong ethical practices.  For instance, nonprofits should take care to implement components of the Standards for Excellence:  An Ethics and Accountability Code for the Nonprofit Sector® like instituting a confidential means for reporting of improprieties, having a strong conflict of interest policy, abiding by the legal requirements at all levels, and assuring adequate protections for the people we serve.

For more information on the best practices in nonprofit management and governance described in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector®, click here. 

To order copies of the Standards for Excellence® code, click here.  Discounts are available for members and those who order in bulk.   

This season, many of us will entertain family and friends, and overnight guests. If you’re like me, you’ll do everything in your power to make them feel welcome in your home – even if it means relinquishing the remote control for a few nights. Like party hosts, nonprofit organizations also have a responsibility to make the public feel welcome in their organization – to foster a climate of openness. The Standards for Excellence® code states that, “Nonprofits should provide members of the public who express an interest in the affairs of the organization with a meaningful opportunity to communicate with an appropriate representative of the organization.” There are more ways for people to communicate now more than ever. But do all of these methods allow for meaningful interaction? If you only rely on your telephone line and website to communicate with the public, you may be missing some opportunities for deeper community engagement.

Did you know?  The Standards for Excellence® Educational Resource Packet, “Openness,” includes a list of possible ways for organizations to communicate with the public. The packet is free and available to Standards for Excellence Institute® members.  It is available through the members only section of our website.  Hard copies are also available upon request.  Not a member? Join now!

By now, many nonprofit organizations have had the joy (or pain) of completing the 2008 Form 990, which many nonprofits are required to complete annually.  The Form is designed to enhance transparency for the Internal Revenue Service and the public and underwent the first major change in the document since 1979.  Those who have implemented the Standards for Excellence®, particularly those organizations that have earned the Seal of Excellence, have told us that they are having no problem answering the new long list of questions about whether they possess a variety of policies in areas like governance, finance, and fundraising.  The breadth of recommendations in the Standards for Excellence: an Ethics and Accountability Code for the Nonprofit Sector®, covers the areas that the IRS is interested in and much more.

Did you know? The Standards for Excellence® Educational Resource packet, “IRS Form 990 Governance and Management Policy Compendium” is a “one-stop” point for some of the most requested policies addressed in the 2008 IRS Form 990. This packet is a collection of the policies nonprofits should consider adopting if they wish to be able to answer Form 990 questions regarding governance, management, fundraising, and disclosure in the affirmative. The packet is free to Standards for Excellence Institute® members through the members only section of our website.  Hard copies are also available upon request.  Log in to access this educational resource packet.  Not a member? Join now!

A few weeks ago, in this 52 Tips in 52 Weeks column, I noted that marking birthdays reminded me of the annual activities nonprofits need to take care to address in the course of regular business. That article focused primarily on some of the annual responsibilities and roles that need to be carried out by each nonprofit’s board of directors. 

Of course, it is not solely the board that needs to keep an eye on its annual responsibilities.  Indeed, the Standards for Excellence:  An Ethics and Accountability Code for the Nonprofit Sector® cites annual tasks ranging from mission and program all the way to public policy and lobbying. 

Take a few moments to get out your organization’s annual work plan and ensure that the following activities are featured prominently:

• Employee performance evaluations are completed annually
• The Form 990 is sent to the IRS annually
• An audit is performed by a certified public accountant (for organizations with revenue over $500,000) annually
• Release an annual report that includes a mission statement, information about the organization’s programs, a list of the board and management staff, and financial information (specifically, a summary statement of financial position and statement of activities)
• Follow the IRS and any state level charitable solicitations and disclosure requirements on all funding solicitations and receipts
• Maintain at least a 3:1 ratio of dollars raised vs. the amount spent on fundraising
• Ensure that all professional solicitors and fundraising consultants employed by the organization are properly registered with the appropriate authorities
• Register with the appropriate authorities if employing/engaging a lobbyist.

For more information on the best practices in nonprofit management and governance described in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® or to order copies of the Code, click here.   Discounts are available for members and those who order in bulk.

Many nonprofits these days are looking for ways to scale back. But how does one decide what activities to continue and what activities to change or discontinue? The Standards for Excellence® code recommends that charitable organizations have cost-effective procedures for evaluating programmatic efficiency as part of a comprehensive program evaluation system.

Taking a look at efficiency pushes us to question whether we can be producing more or better outcomes at a lower cost. Measuring efficiency is not easy. It requires quantifying and analyzing an organization’s “bottom line” in a similar fashion to for-profit companies. In any case, I’d like to offer a few suggestions for measuring the efficiency of your programs.

• Cost Benefit Analysis – Measure the relationship of the program impacts to the costs of achieving them. In other words, measure the costs of inputs (materials and processes that go into producing the program) in relation to the benefits of program results.
• Periodically Review Productivity Standards – Determine an acceptable goal for the number of outputs and/or types of outcomes you will produce given your resources and inputs. Periodically monitor the rate at which you are meeting those targets or falling short.
• Assess Utilized Resources – Analyze whether there are resources that are not in constant use in your nonprofit, such resources that are used for only part of the available time.
• Pay Attention to Poor Quality – Program participant complaints or underutilization of services could be a sign that there is a problem with efficiency.

Did you know? The Standards for Excellence® Educational Resource Packet, “Program Evaluation” includes a discussion on conducting a cost-benefit anaylsis. This packet is free and available to Standards for Excellence Institute® members. It is available through the members-only section of our website. Hard copies are also available upon request. Not a member? Join now!

The Standards for Excellence® code requires that a nonprofit board have no fewer than five board members, preferably at least seven. However, the true answer is that “it depends.”  The size of your board of directors will depend on the type of organization, the size of the organization’s budget, the organization’s maturity, and the nature of its work.  It might be appropriate for a very new nonprofit to have only five board members.  However, it is rare to find a well-established organization with such a small board of directors. In fact, according to the Nonprofit Governance Index, a national study conducted by Board Source, the national average size board is 16.  The fundamental question that you must answer to determine the appropriate size board, is “What size board will allow us to carry out effective, ethical, and accountable governance of the organization?  When considering the size of the board, the skills, diversity, and experience needed should also be factors. 

Did you know?  The Standards for Excellence® educational resource packet, “Board Composition,” includes a discussion on the advantages and disadantages of having a small board of directors versus large board of directors and vice versa.  This packet is free and available to Standards for Excellence Institute® members.  It is available through the members-only section of our website.  Hard copies are also available upon request. Not a member? Join now!

‘Tis the season generous volunteers will bestow the gift of time upon thousands of charities. Volunteers will be up on ladders hanging holiday decorations, schlepping boxes of clothes and toys, and delivering meals to home-bound neighbors.  If your nonprofit will be engaging volunteers, it is a good idea to assess your current insurance coverage to determine whether you have the appropriate coverage in light of all of the work you do, including the efforts involving volunteers.  Depending on how your volunteers are utilized, your general liability insurance or Directors and Officers insurance may not be enough.

In general, The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® recommends that all nonprofit organizations “periodically assess the need for insurance coverage in light of the nature and extent of the organization’s activities and its financial capacity.”  We know that some small nonprofits decide to forego general liability insurance coverage or Directors and Officers liability insurance coverage altogether.   However, doing so is taking a significant financial risk.  The Standards for Excellence® code specifically states that the decision to forgo insurance shall only be made by the board of directors and shall be reflected in the minutes for the meeting at which the decision was made.

Did you know?  The Standards for Excellence® Educational Resource Packet, “Legal Compliance and Liabilty Issues” includes a dkiscussion on legal compliance relating to volunteers and a discussion on genral liability and Directors and Officers insurance.   This packet is free and available to Standards for Excellence Institute® members.  It is available through the members-only section of our website.  Hard copies are also available upon request. Not a member? Join now!

Certainly this is the season of thinking of all of the things we’re thankful for.  Whether it’s the person who volunteers to assist your nonprofit with reception duties, the volunteer who works at his computer in the middle of the night writing articles for your newsletter or keeping your website up to date, or the volunteer who provides direct services on a weekly basis, you probably appreciate your volunteers more than words can say. 

Many managers work on the premise that volunteers should be thanked early and often.  Whether this is the case or not, thanking your volunteers is not necessarily enough.  Do you take the time to provide appropriate ongoing supervision and evaluation for your volunteers?  Do you provide them with opportunities to grow and stretch their skills as volunteers?  The Standards for Excellence:  An Ethics and Accountability Code for the Nonprofit Sector states that “With respect to volunteers, the organization’s policies and procedures should also address initial assessment or screening, assignment to and training for appropriate work responsibilities, ongoing supervision and evaluation, and opportunities for advancement.”

Did You Know? The Standards for Excellence® Educational Resource Packet, “Volunteer Policies” includes a sample set of volunteer policies that you can customize for your organization.  This packet is free and available to Standards for Excellence Institute® members through the members only section of our website. Hard copies are also available upon request. Not a member? Join now!