This article was originally published on the Grants Managers Network (GMN) Blog on March 1, 2017. Amy Coates Madsen, Director of the Standards for Excellence Institute®, is presenting at the GMN 12th Annual Conference on March 20, 2017 in Hollywood, CA. Click here to read more about her session, “Embracing the Best Practices: How Grantmakers Are Using the Standards for Excellence® in their Capacity Building and Due Diligence Efforts.”
As a foundation executive you have a multitude of nonprofits vying for your support. You must decide where your investments will have the greatest impact. What if you could be certain that grant applicants are operating in an upright, accountable, and ethical way?
Foundation executives are committed to ensuring each project they fund is successful, achieving anticipated impacts proposed in the associated grant application. No foundation wants to fund a nonprofit that shuts its doors the following month, or must severely constrict its services to the point where it lacks the capacity to implement a funded program.
Nonprofit organizations – and the rest of us – are living in uncertain times. Each day, we read articles about distressed nonprofits in the paper and on the omnipresent newsfeeds on our devices. Some stories focus on nonprofit organizations, for whatever reason, ceasing their operations. Other articles provide detailed reports on improprieties, conflicts of interest and nepotism in nonprofits. An article in this morning’s paper described an international organization closing its offices in five US cities due to the current environment. Other nonprofits close shop because they have difficulty fundraising, because their boards are asleep at the wheel, or because they have been unsuccessful at ensuring their organization’s sustainability.
You, as a foundation executive, can eliminate uncertainty of whether the nonprofits you support are operating in an upright, accountable and ethical manner. There is a way for you to know if applicants have appropriate internal controls in place, have a comprehensive advocacy policy, and do all they can to avoid conflicts of interest. You also want to be confident that you are working with nonprofits that are treating leadership succession, sustainability and diversity, equity and inclusion with the seriousness they deserve. Would you like to know these things without adding six more questions to your grant application?
One leading grantmaker, the Community Foundation of Northeast Alabama (CFNEA), has found a way to do this. The Community Foundation of Northeast Alabama, through its work with the Alabama Association of Nonprofit Organizations, has embraced a program called the Standards for Excellence. CFNEA offers training and coaching for organizations interested in being accredited by the Standards for Excellence Institute®.
The Standards for Excellence Institute helps nonprofits live by the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector, a set of 67 standards for good nonprofit governance and management. The Standards for Excellence Institute offers a host of high-quality educational materials and training programs to help nonprofits achieve and embrace these leading standards. Organizationsdemonstrate to funders (and everyone else!) that they live by these high standards by participating in the Institute’s accreditation and recognition programs. Nonprofits that earn the Seal of Excellence can display it prominently and it also becomes part of their GuideStar profiles.
“It is imperative that not-for-profits of all sizes be effective, efficient, credible and transparent as they strive to meet critical community needs,” says Jennifer S. Maddox, President and CEO of the Community Foundation of Northeast Alabama. “We believe not-for-profit organizations are our partners in achieving the mission of the Community Foundation of Northeast Alabama. The Standards for Excellence® accreditation gives us confidence in the grants we make.” The Community Foundation of Northeast Alabama doesn’t just ask about grant applicants’ participation in the Standards for Excellence program and their status as a Standards for Excellence seal holder. In partnership with the Alabama Association of Nonprofits, CFNEA invests in special training, coaching and support available to local nonprofits interested in earning the Seal of Excellence. Additionally, each year the Foundation sets aside grant funds available exclusively to organizations that live by the tenets of the Standards for Excellence code.
The Community Foundation of Northeast Alabama is just one example of a small group of committed foundation executives utilizing the Standards for Excellence program’s voluntary accreditation program, therefore encouraging their grantees to perform in a stronger and more accountable way.
Other examples of foundation executives moving in this direction are plentiful.
Seven foundations in Pennsylvania (where the Standards for Excellence program is offered by the Pennsylvania Association of Nonprofit Organizations, PANO) encourage their grantees and other nonprofits to participate in the Standards for Excellence training and accreditation process (Phoenixville Community Health Foundation; Westmoreland County Community Foundation; Grable Foundation; Philadelphia Foundation; Montgomery County Foundation; Adams County Community Foundation; and the HBE Foundation.)
Eleven foundations in Ohio (where the Standards for Excellence program is offered by the Ohio Association of Nonprofit Organizations, OANO) do the same (Richland County Foundation; Licking County Foundation; Dayton Community Foundation; the Cleveland Foundation; the Columbus Foundation; Toledo Foundation; Greater Cincinnati Foundation; Findlay-Hancock Foundation; Gund Foundation; Gar Foundation; and the Mathile Family Foundation). In Oklahoma, numerous foundations ask whether potential grantees have completed Standards for Excellence comprehensive training programs, which are offered through Standards for Excellence replication partner, the Oklahoma Center for Nonprofits.
It’s time to take a simple step toward eliminating some of your uncertainty about potential grantees. Begin asking applicants about their participation in the Standards for Excellence program. Join the growing ranks of foundations of all sizes asking one simple additional question – a question packed with assurances of the grantee’s strong management and governance practices.