Why this self-assessment?

Provisions of the Sarbanes-Oxley Act for business accountability could be applied to nonprofits. Public expectations of nonprofits are significantly higher than for business . . . and most nonprofits meet that higher standard. Now more than ever there is an opportunity to exceed public expectations and re-build any trust that may have been lost. When nonprofits are perceived as acting in less than professional, irresponsible or ethically questionable ways, public reaction can quickly rise to feelings of betrayal and violation of trust. Distrust in one nonprofit can result in a "halt" to giving to other nonprofits.

Prevention is so much easier than recovery. For that reason we might heed poet Robert Burns wisdom about the power " . . . to see ourselves as others see us". During your self-assessment involve your various stakeholders in helping with a 360-degree assessment. Engage your "customers" to make them "partners" and not just critics in change.

The following "sniff test" provides a short set of best practices and ethical behaviors to help build transparency and trust especially when combined with rigorous proactive and remedial action back home. Continuous improvement thrives on candid feedback from self-assessments that engage those with something "at-stake".

Answer "Yes" or "No" To Each Question & Then Ask Your Stakeholders

1. Audible Whistle Blowing: If you discovered an integrity lapse or accounting error and reported it to your nonprofit's designated complaint recipient, would he/she investigate your concerns thoroughly and promptly without penalizing you? ___Yes ___No
   
   
2. Self-Scrutiny Self-Assessment: Does your nonprofit conduct an operations and ethics self-assessment involving staff, donors, board and recipients to identify strengths and areas for continuous improvement improvement and then implement those improvements? ___Yes ___No
   
   
3. Exemplar Independent Financial Audit: Does your nonprofit have a competent independent financial audit committee and CPA firm that signs its name to the audit report as does your executive director and CFO? ___Yes ___No
   
   
4. Exec's Performance Review With Teeth: Does your board of directors reserve part of one meeting for an annual review of both the executive directors' performance (with the director absent) and the performance of the nonprofit in accomplishing its mission? ___Yes ___No
   
   
5. Board Rigor Not Rigor Mortis: Are your board members from the business sector as or more rigorous in guiding your nonprofit as they are in guiding their own companies and are you receptive to their coaching? Are there procedures in place to remove unfit directors? __Yes ___No
   
   
6. Hard Edged Project Impact Monitoring: Does your nonprofit monitor its project impacts, both successes and failures, noting what was learned and then communicate that to donors and other stakeholders? ___Yes ___No
   
   
7. Uncommon Predictability/Transparency: Do your donors know where their money is going and how dollar allocation decisions are made? ___Yes ___No
   
   
8. Open Book Funds Use: Does your nonprofit have a clear policy about whether or not a portion of donations can be used to cover overhead, fundraising expenses or future projects? ___Yes ___No
   
   
9. Diligent Donor Protection: Does your nonprofit protect your donors from unwanted solicitations by allowing them to "opt in" or "opt out" of e-mail, US mail or telephone calls? ___Yes ___No
   
   
10. IRS Compliance+: Has your nonprofit filed a current and complete IRS Form 990 and are you perceived as responsive to requests for additional clarifying information from donors? ___Yes ___No
    
    
11. Gold Standard Code of Ethics: Do you a have a code of ethics for staff and board that includes a conflict of interest provision? ___Yes ___No
    
    
12. Your Money Follows Your Mouth: Have you included your nonprofit in your own annual giving plan? ___Yes ___No
    
    

Self-Scoring  (Count the Number of Yeses)

10-12	Wear a laurel wreath but don't rest on it
7-9	Get sunscreen SPF 35 and prepare for front-page exposure
4-6	Buy a supply of tar and feather remover
0-3	Prepare for an "End-Ron" burial

"Congratulations on your willingness to explore cherished mistaken certainties."

Some of these practices were drawn from the July 30, 2002 Sarbanes-Oxley Act, The Grantsmanship Center Magazine - Patrick O'Hare (author from Ober Kaler law firm), National Public Radio discussions, best business practices offered by Wendy Weissman, Bobbi Bilnoski-Concinnity Network, and from the PhilanthropyNow "Report Card For Rating Giving Opportunities" ^TM.

Send comments to advocate@philanthropynow.com Tel: 503.297.1490 www.philanthropynow.com

© 2002, Charles B. Maclean, PhD & PhilanthropyNow Permission is granted to copy this article as long as it is duplicated in total. Call to receive consent for partial duplication.

November 13, 2002

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