Second edition, 2014

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Embracing Best Practices in Nonprofit Management
and Governance
Second edition, 2014
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Americas Nonprofit Sector
Who are we? We are churches, hospitals and
schools. We are environmental activists,
developers and preservationists, and social
service agencies. Wherever there is a need for
services, Americas nonprofit sector is there to
meet that need. In 1983 there were 300,000
nonprofit organizations In 1993 there were
750,000 nonprofit organizations In 2013 there
were over 1.4 million registered nonprofit
organizations in the United States.
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YOUR STATEs Nonprofit Sector
There are nearly _____ nonprofit organizations in
STATE alone. Of these, ______ are 501(c) 3s
(2010). ________ are employed by nonprofits in
the state, representing over __________in total
wages
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Nonprofits Depend upon the Public and the Public
Trust

• Tax exemption
• Tax deductible dollars through contributions
• Recipients of foundation grants
• Ability to recruit volunteers, including board
  members
• Public trust is an important asset

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Competition Among Nonprofits

• Funding from all sources
• Volunteers
• Staff
• Board members

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Public Becoming More Sophisticated
Many donors and the public are concerned about
more than simply program administration and
fundraising ratios
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Greater Scrutiny

• Vicious cycle of lapses and increased
  regulatory/legal scrutiny
• Increased consumer expectations and sophistication

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Others Looking at Best Practices

• What watchdog organizations are you aware of?
• Are you familiar with other organizations and
  websites that monitor and expose nonprofits and
  their practices?

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Websites educating about nonprofits and their
practices

• Volunteermatch.org
• Local online database of nonprofits like Giving
  Matters, Nonprofit Search
• Networkforgood.org
• BoardnetUSA.org

• GuideStar.org
• Greatnonprofits.org
• Idealist.org
• Catalogue for Philanthropy-dc.org
• Local volunteer recruitment centers

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IRS Emphasis on Best Practices
The Internal Revenue Service believes that a
well-governed charity is more likely to obey the
tax laws, safeguard charitable assets, and serve
charitable interests than one with poor or lax
governance. Irs.gov/pub/irs-tege/governance_prac
tices.pdf
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IRS 990 Calls on Each Nonprofit to Embrace Best
Practices

• Policies on
• Conflicts of interest
• Document Retention and Disclosure
• Whistleblower
• Reimbursement
• Joint Venture
• Compensation
• Gift acceptance
• Solicitation Policy
• Auditor Independence

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This is why
We need to pay attention to all of the
organizational issues that make nonprofit
organizations tick. Once you are aware of these
organizational best practices, your organization
can focus increased energy on achieving your
mission and running your programs. Stay
competitive and stay in business.
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Our Mission

• Promote the highest standards of ethics and
  accountability in nonprofit governance,
  management and operations, and to facilitate
  adherence to those standards by all nonprofit
  organizations.

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The Standards For Excellence Program

• The Standards for Excellence code
• Resources and Training
• Voluntary Accreditation
• Educating the Public

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Program Delivery

• Membership
• Licensed Consultants
• Replication Partners

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Membership Services / Benefits

• Free Standards for Excellence educational
  resource packages
• Free one-on-one technical assistance
• Member pricing on accreditation and recognition
• Member pricing on educational programs

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Standards for Excellence Replication Partners
2014
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Standards for ExcellenceWhat are they?

• 6 Guiding Principles, 27 areas of focus and 67
  Benchmarks
• Preamble
• Mission, Strategy and Evaluation
• Leadership Board, Staff and Volunteers
• Legal Compliance and Ethics
• Finance and Operations
• Resource Development
• Public Awareness, Engagement, and Advocacy

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The Standards for Excellence Code

• The code provides a framework and step-by-step
  guidelines to achieve a well-managed and
  responsibly governed organization.

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Self Assessment
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Embracing Best Practices in Nonprofit Management
and Governance
Second edition, 2014
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MISSION, STRATEGY AND EVALUATION
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Mission, Strategy and Evaluation
Mission, Strategy and Evaluation

• Mission and Impact
• Planning Strategically
• Organizational Evaluation
• Program Evaluation
• Strategic Partnerships

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LEADERSHIP BOARD, STAFF, AND VOLUNTEERS
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Leadership and Governance
Leadership Board, Staff and Volunteers

• Governance and Fiduciary Responsibility
• Executive Supervision, Performance, and
  Compensation
• Board Effectiveness
• Succession Planning and Leadership Development
• Board Member Independence
• Board Meetings

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Leadership and Operational Management
Leadership Board, Staff and Volunteers

• Executive Function
• Supporting the Board
• Organizational and Financial Sustainability
• Managing Employees and Volunteers

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Cultural Competency
Leadership Board, Staff and Volunteers

• Cultural Competency
• Assessment
• Strategy and Planning

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LEGAL COMPLIANCE AND ETHICS
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Legal Compliance and Ethics
Legal Compliance and Ethics

• Maintaining Legal Compliance
• Required Public Disclosures
• Reporting Misconduct and Whistleblower Protection
• Conflicts of Interest
• Ethics Code

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Case Study
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What do YOU think?

• You are on the board of a low income home
  building organization. In your full time job, you
  own a hardware store and often donate supplies to
  support the organization on whose board you
  serve. Other hardware stores in your area also
  make generous contributions to the cause.
  Because of your position on the board, you
  recently learned that the organization will
  building its 100th house and to commemorate this
  occasion, the organizations celebrity
  spokesperson, a hugely popular and well known
  sports star, is inviting several other sports and
  movie stars to attend the dedication of the home.
  It is the custom of the organization to place a
  sign recognizing the firms and individuals who
  donated services as a backdrop to the stage being
  used for
• the home dedication.

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FINANCE AND OPERATIONS
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Finance and Operations
Finance and Operations

• Financial Budgeting, Reporting, and Monitoring
• Internal Controls and Financial Policies
• Administrative Policies
• Risk Management and Insurance

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Case Study
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What would you do?
You are the associate director at a medium sized
nonprofit literacy organization. While visiting
one of the branch offices, you learn that the
branch is in dire need of hand cleanser. Rather
than adhering to the normal channels for
purchasing supplies, you elect to stop by a store
near the office, purchase a large quantity of
cleanser and drop it off at the branch.
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RESOURCE DEVELOPMENT
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Resource Development
Resource Development

• Resource Plan
• Sources of Income
• Fundraising Activities
• Donor Relationships and Privacy
• Acceptance of Gifts
• Fundraising on Behalf of the Organization

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PUBLIC AWARENESS, ENGAGEMENT,
AND ADVOCACY
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Public Awareness, Engagement, and Advocacy
Public Awareness, Engagement, and Advocacy

• Educating and Engaging the Public
• Advancing the Mission through Public Policy
• Engaging in Lobbying and Political Activity

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Case Study
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How would you handle this?

• The founder and president of your board has just
  announced that she is running for State Senate.
  She is well known because of her long-standing
  association with the organization and the
  contacts she has made on its behalf over the
  years. How would you respond if you found that
• Her campaign chair wants you to place one of her
  campaign signs in the window of the
  organizations office or in front of its office
  building?
• That she plans to give the organizations board
  list to her campaign manager so that the board
  members may be asked to be block leaders for
  her campaign?
• Her campaign chair has asked to borrow a copy of
  the organizations major donor list that is
  periodically distributed to board members in
  order to solicit contributions for the campaign?
• The president of the board is planning to
  announce her candidacy on the front steps of the
  organizations headquarters?
• She plans to remain on the board during your
  campaign?

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Standards for Excellence An Organizational Tool

• A model for nonprofit organizations to implement
  accountability in their management governance
  practices
• A framework with a clear statement of the
  organizations commitment to best practices
• A self-regulatory tool to ensure public
  confidence and public support
• A demonstration of the organization's commitment
  to public service

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Providing the Help You Need

• Educational Resource Packets
• Educational Programs
• Webinars
• In Person
• One-on-one technical assistance
• Licensed Consultants

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Accreditation and Recognition

• An important outcome of this process has been
  better trained staff and volunteers that have a
  stronger understanding of our mission, philosophy
  and operating systems. We believe we are a
  stronger organization, as a result.

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Accreditation or Recognition?Start with
Assessment!

• Full Accreditation Process
• Shorter timeline
• Take a systems approach
• Less expensive than applying at each tier
• Better if you have a chunk of time/resources to
  focus on the application process

• Tiered Recognition Process
• Go at your own pace feedback and assistance from
  staff at each level
• Each level builds on the previous tier across
  each topic area
• More expensive over time if you choose to advance
• Better if you have smaller amounts of
  time/resources to devote to the process over a
  longer period of time.

Full Application Instructions Available Online at
www.standardsforexcellenceinstitute.org
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Other Resources for Nonprofit Leaders

• Management support organizations
• University or college based nonprofit academic
  centers
• Private consultant firms
• Nonprofit or for profit
• Corporation for National and Community Service
• State Offices of Service and Volunteerism

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Other Resources for Nonprofit Leaders

• International Center for Not for Profit Law
  (ICNPL)
• Independent Sector
• Alliance for Nonprofit Management
• National umbrella associations focused on your
  industry or issue area
• National Capacity Builders focused on
  particular issues, like
• Nonprofit Center for Risk Management
• Charity Lobbying in the Public Interest
• Alliance for Justice
• Standards for Excellence Institute

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What can I do tomorrow?

• Share the assessment exercise with your
  colleagues
• Decide what changes can be made first and
  consider tackling the easy items first!
• Think about what changes can be added to your
  organizations work plan
• Get your board and staff involved in embracing
  best practices

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Questions and Answers
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• Name
• Title
• Contact Information