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Last month, my son turned two years old.  We had a big party with friends and family—pizza, ice cream, balloons, and even a cool 3-dimensional cake in the shape of a train!  I, on the other hand, will celebrate my birthday next week and like many of my contemporaries, unless it’s a milestone birthday, I would prefer for the event to pass without any fanfare or fuss at all.   (Truth be told, even if it’s a milestone birthday, I’d prefer to celebrate it quietly!)

Our organizations, too, celebrate birthdays or anniversaries of their founding.  Perhaps your organization marks the year’s passing at the start or conclusion of the organization’s fiscal year. There are many different tasks or responsibilities that nonprofits need to ensure take place annually.

This week, we wanted to focus on a few of the annual events nonprofits should take care to implement over the course of their work in the areas of mission, program and governing board (the first and second portions of the Standards for Excellence® code).  According to the Standards for Excellence® code, we should all work to ensure that the following activities are handled each year: 

• Organization’s evaluation of all programs, including measuring efficiency and effectiveness
• Board’s maintenance of written board and committee minutes, as applicable
• Board’s review of the percentage spent on program administration, and fundraising annually
• Board’s review of the executive director’s performance
• Board’s review the executive director’s compensation
• Board’s approval of the organization’s budget
• Board’s approval of the audited financial statements
• Board, staff, and volunteers’ disclosure of potential and real conflicts of interest

New board members and employees receive an introduction to the Standards for Excellence® code

Did you know? The Standards for Excellence Institute offers educational resource packages on topics ranging from program evaluation to board conduct and board composition.  These packets are 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!

I remember a time when a visit to the dentist was a piece of cake. I knew that I could expect a brief examination, followed by praise for having zero cavities, a new toothbrush, and a mouth with that minty, “just came from the dentist” feel. However, as I got older and my excellent habits became just “so-so,” I began to avoid the dentist, only going when there was a problem. I was too afraid of what she might find.

Just as avoiding the dentist was not good for my pearly whites, avoiding a periodic assessment of your board’s performance is not good for the health of your Board of Directors. A good board self-assessment can help ensure that the board understands its role as a board. It also gives board members an opportunity to reflect on their service on the board as individuals. Most organizations recognize the benefits of assessment of employees and would not dare skip performance reviews for staff. The Standards for Excellence® code encourages the Board of Directors  to follow suit. The code specifically states that the board is responsible for its own operations, including the periodic (i.e., at least every two years) evaluation of its own performance.  After all, the board deserves to be recognized for its strengths, and given an opportunity to acknowledge and improve its weaknesses.

Did You Know? The Standards for Excellence® Educational Resource Packet, “Conduct of the Board,” includes a discussion on board self-assessment and a sample Board Self Assessment that you can customize for your Board of Directors. 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!

The Standards for Excellence® code states that nonprofit personnel policies should always address employee growth and development. However, many nonprofits have had to cut back on expenses such as training courses and conferences. A cut in the professional development budget should not mean that professional development should go by the wayside.   Now, is the time to get creative in your approach.

Strategies such as job rotation, encouraging employees to volunteer in order to gain a skill, encouraging employees to gain knowledge and presentation skills by teaching a course, or setting up a formal mentoring or job shadowing program within your organization, are just a few creative, low-cost approaches to employee development. Having such opportunities for growth will keep employees energized and happy.

Did you know? The Standards for Excellence Sample Personnel Policies includes language on employee growth and development. The personnel policies are 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!

You may have heard about the recent report released by the Treasury Inspector General for Tax Administration  which found that the Internal Revenue Service and charities were not doing enough to ensure that donors of motor vehicles avoid taking unsubstantiated tax deductions.  The report found that in 2007, over 92,000 taxpayers took unsubstantiated motor vehicle donations totaling $204 million—which may have resulted in tax avoidance by taxpayers to the tune of $17 million in taxes in 2007. 

The Standards for Excellence:  An Ethics and Accountability Code for the Nonprofit Sector® states that nonprofits should follow the law at all levels and should also have a policy in place to govern the acceptance and disposition of charitable gifts that are received in the course of its fundraising activities.  

For some organizations, this report may encourage them to consider refusing gifts of automobiles, boats, or airplanes if they are not in a position to appropriately handle the requirements and paperwork.  For others, it may mean taking a much more serious look at what is required when the organization accepts a car, boat, or airplane as a charitable contribution from some well-meaning donor.  At any rate, nonprofits should do their best to ensure that they are following the law—which includes making sure that their receipts and acknowledgements for gifts are properly handled.

Did you know? The Standards for Excellence® program’s educational resource packet, “Acceptance of Gifts” includes a sample acceptance of gifts policy.  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!

If there was a pill that your board of directors could take to solve all of its problems, I’m sure you’d order a year’s supply right away. Sadly, there is no magic pill that will create and maintain excellent board member performance.  But the Standards for Excellence Code® offers a solution — “the board should establish stated expectations for board members, including expectations for participation in fundraising activities, committee service, and program activities.” 

A clearly written job description is an integral part of the organization’s recruitment, orientation, and board evaluation processes.  Often times, nonprofits find that while their boards are comprised of talented, well-meaning individuals who want to help to the best of their abilities, they simply do not understand their roles and responsibilities.  Strengthening your board member expectation document or job description could go a long way towards strengthening the performance of individual board members and the board as a whole. 

Use the sample board member position description in the Standards for Excellence® program’s educational resource packet, “Conduct of the Board,” as a starting point for enhancing your board’s document on board member expectations. 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!

The first day of school can be a major source of anxiety. You probably remember agonizing about what you would wear, getting your hair just right, and who would be in your homeroom. If starting a new school where everyone is a stranger, that anxiety level rises even higher. Beginning a new job or career, can be just as stressful. However, a good orientation to the organization can ease some of this stress and help new employees succeed.

Most new employees probably receive a basic introduction during the first couple of days – a primer on using the office equipment, the company history, a copy of the personnel policies and an introduction to everyone who’s in the office. According to the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector, a new employee orientation should include a review of the, organization’s personnel policies and procedures, position description, and an introduction to the Standards for Excellence®. But why stop here? A good orientation can be so much more than this depending on the culture and complexity of your organization. And don’t forget — orientation is not just for front-line staff. Managers and executives also deserve a tailored orientation to help ease the transition and put them on the track to making an impact right away.

Did you know? The Standards for Excellence® program’s educational resource packet, Personnel Policies and Employee Orientation,” includes sample orientation checklist. Use this as a starting point for enhancing your new employee orientation. 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!

According to the Standards for Excellence® code, the board should periodically review the appropriateness of a nonprofit organization’s overall compensation structure.  However, some nonprofit executives are reluctant to involve the board in decisions regarding employee compensation levels beyond approving the salary line in the annual budget.  If the board’s role is to manage the executive director and the executive director oversees staff, why should the board be involved at all? 

All great nonprofits need great people working towards achieving the mission.  A formalized salary structure review, conducted by the board every three to five years, can bring attention to current salary levels, and prompt the board to make greater efforts to keep staff salaries competitive.  But even if a charity is paying employees at market rate, a periodic board-level review can assure fairness, prevent discriminatory practices, and keep the highest paid employees from moving too far ahead of everyone else.  Considering that the issues that give rise to IRS assessments most often concern excessive salary and incentive compensation, having more eyes on the decisions being made in this area gives the organization one additional layer of protection.

Did you Know?  The Standards for Excellence Educational Resource Packet, “Compensation and Employee Evaluation” includes a discussion on the board’s role in reviewing executive compensation and the overall compensation structure of the organization.  This packet also gives specific guidance on how to conduct a salary structure survey.  Members can download this packet free.  Not a member? Join now!

Conversations surrounding fundraising costs in nonprofits are often highly charged debates.  Some people feel that nonprofits must show that they have no or very little fundraising expenses.  Others draw a theoretical “line in the sand” for the maximum amount of fundraising that they believe is appropriate for any organization. 

My favorite article on this subject is “100 % Goes to Charity” by Lee Draper published in 2003 by Foundation News and Commentary. In this article, Dr. Draper states that “indirect costs, overhead, and administrative expenses do not convey the correlation of expenditures to the quality and quantity of the fundraising.”  The issue has also been explored in great detail in Dan Pallotta’s 2008 book, Uncharitable.

No matter your view on fundraising expenses, all nonprofits should be sure to have a clear procedure in place for appropriately calculating and allocating fundraising costs. Such fundraising costs should be clearly indicated in financial reports, the audit, and the 990.  The Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector® states that nonprofits should realize charitable contributions from fundraising activities that are at least three times the amount spent on fundraising and the nonprofit’s board should annually review the percentage of the organization’s overall expenditures spent on program, administration and fundraising.

Did you know? The Standards for Excellence® program’s educational resource packet, “Fundraising Costs” is free to Standards for Excellence Institute® members.  It is available through the members only section of the Standards for Excellence Institute® website.  Hard copies are also available upon request.

Log in to access this educational resource packet.  If you forgot your password, click here and we will e-mail it to you. Not a member? Join now!

I’ve  finally decided.  This weekend will be the weekend that I put together the scrapbook that will archive my summer memories.  Like all good scrapbooks, mine will tell a story. It will tell the story of the chocolate fudge ice cream that tasted so much better eaten from a cone on the boardwalk than from a bowl in front of my television.  It will boast accomplishments like surviving a road trip from the Mid-Atlantic area to the Deep South taken in just three days.  The scrapbook will be both a depository of memories for my reference and a window into my world for others who might stumble upon it now and in the future.  

If you approach your annual report like I approach my scrapbook, you’ll have to agree that your annual report should include a few key elements that will help you achieve these same goals.  These key elements, as outlined in the Standards for Excellence® code, are:

1) the organization’s mission statement;

2) information about your program activities;

3) audited financial data  — specifically, the statement of activities, and summary statement of financial position;

4) a list of management staff, and

5) a list of board members 

If your annual report does not include these basic elements or serves primarily as a record of donor names, you might be missing a big opportunity to give others a window into the world of your nonprofit.  Keep these elements front and center and you’ll be sure to keep the focus what you’ve accomplished, who helped get you there, and most importantly, who is better off as a result of all of the effort put forth over the past year.

Looking for more?  The Standards for Excellence® staff has several sample annual reports that include all of the elements recommended in the Standards for Excellence® code.  Members may request samples by email at info@standardsforexcellenceinstitute.org or call (410) 727-1726.  Not a member? Join now!

Many nonprofit organizations provide great services every day.  Counselors get glowing reviews on client satisfaction surveys.  Parents write teachers thank you letters on behalf of their three year olds.  But ever so often a program participant has a complaint to express. Sometimes it is as minor as a leaky bathroom faucet. Major complaints such as complaints of harassment from another client or employee, also occur.  Nonprofits that have procedures to address complaints from program participants will be more prepared to cope with these situations.  Grievance procedures allow organizations to receive and resolve complaints in a timely manner, before major problems occur.  Formal procedures also decrease the likelihood that problems will be ignored because there is a possibility that upper management or the board of directors will become involved. 

Did you know? The Standards for Excellence® program’s educational resource packet, “Program Service” includes a sample grievance procedure for addressing complaints from program participants.  The packet is free and available to Standards for Excellence Institute® members.  It is available through the members only section of the Standards for Excellence Institute® website.  Hard copies are also available upon request.

Log in to access this educational resource packet.  If you forgot your password, click here and we will e-mail it to you. Not a member? Join now!