The Standards for Excellence Institute has always encouraged nonprofits to have a clearly written list of expectations for board members.  One of the most important responsibilities for every nonprofit board is the responsibility “to assure that adequate . . . financial resources (earned income, government contracts and grants, and charitable contributions) are available. . ."  (Source: Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector).But don’t take our word[…]

In a recent column, the Baltimore Sun’s Jay Hancock slammed the relationship between nonprofit organizations and for-profit fundraisers.   He had received a telephone call on behalf of an organization to which he had previously donated, and after some digging, discovered that the nonprofit had only received 51% of the funds collected the last year from this same for-profit telemarketing company.  Outraged by this discrepancy, Hancock wrote, “Your reaction, however, ought to be the same. Ignore[…]

As I write this post, the special extended deadline for small nonprofits to file their Form 990s has just passed.  As the story goes, Congress passed two small laws back in 2007.  These laws require all nonprofits to file a Form 990, and if a nonprofit fails to file for three consecutive years, then it would lose its tax-exempt status.  The IRS applied this law by creating a new and truncated version of the Form 990, called the Form 990-N (“e-Postcard”).  This new form is for the smallest[…]

What’s your worst volunteer horror story?  Well, if it can top the Maryland SPCA’s current situation, then your story must be bad indeed.  From news reports last week, we learn the story of Derrick Chambers and the Maryland SPCA.  Chambers was arrested and charged with four counts of animal cruelty by Baltimore City.  Because of an apparent lack of evidence, the lawyers and judge reached an agreement.  Chambers would serve 50 hours of community service with the SPCA.  The only problem, no one[…]

A new report, “The Importance of Ethical Culture- Increasing Trust and Driving Down Risks” just  released by the Ethics Resource Center shows that organizations with strong ethical cultures find few employees feeling pressure to commit misconduct (4 % versus 15 % in organizations not found to have strong ethical cultures).  In addition, the report shows the rate at which employees observe misconduct by co-workers is nearly twice as high in weaker cultures (76 %) as it is in stronger cultures (39[…]

As I witnessed the magical beauty of the Independence Day fireworks paint the sky of our nation's capitol, I could not help to think about our country’s founders and that very important document adopted in early fall of 1787.  The Constitution of the U.S., provides the framework for the organization of our government and the relationship of the government to the citizens and states.  It is one of the world’s oldest governing documents of any country today.  But they weren’t perfect as drafted at[…]

There have been some recent high profile stories in the news of nonprofits that have found tragic results due to organizational structures  where the power of the organization is held by one or two individuals—often a founder and his/her family member.In our work with nonprofit organizations over the years, we occasionally encounter situations where a visionary leader is interested in founding a nonprofit organization, serving as the organization’s first paid executive director, and then[…]

If you are in the market for a professional fundraiser or solicitor, you’re not alone.  Most nonprofit organizations have employees or contracts with professional fundraisers or solicitors.  When deciding on the appropriate compensation for these services, always keep in mind that the Standards for Excellence® code prohibits percentage-based fundraising.  The code states, that “fundraising personnel, including both employees and independent consultants, should not be compensated based on a[…]

 Recently, the Ethics Resource Center released the report, Saving the Company Comes at a Cost: The Relationship Between Belt-Tightening Tactics and Increased Employee Misconduct .  This report focuses on the effects that tactics that companies use to weather the financial struggles affect employee behavior.  Based the National Business Ethics Survey, the study found that tactics such as adjustments to work schedules, layoffs, compensation and benefit reductions, hiring freezes, early buyouts,[…]

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%[…]