A National Resource to Support Excellence in Community Action
Last Revised: Jan 18, 2016 - Initial Posting: Aug 18, 2005
Purpose

The Panel on the Nonprofit Sector has published recommended actions to strengthen governance, transparency, and accountability among charitable organizations including 501(c)(3) agencies.

Description

Strengthening Transparency, Governance, and Accountability of Charitable Organizations

Strengthening Transparency, Governance, and Accountability of Charitable OrganizationsThe Panel on the Nonprofit Sector, convened by Independent Sector, at the encouragement of the Senate Finance Committee, was formed to develop recommendations on how to strengthen the governance, ethical conduct, and accountability of charitable organizations.  The original full report was issued in 2005.  Strengthening Transparency, Governance, and Accountability of Charitable Organizations includes recommendations appearing in Section V (pp. 85 –91) and fully discussed in Section III (pp. 23 – 82).  The report was updated in 2015 and is available, along with other helpful resources, for purchase through the Independent Sector.

IS_Principles_Executive_Summary-2015 (116x150)An Executive Summary, updated in 2015, is also available that includes a list of 33 principles for good governance and ethical practice organized under four main categories:

  • Legal Compliance and Public Disclosure
  • Effective Governance
  • Strong Financial Oversight
  • Responsible Fundraising

The Panel’s recommendations highlight the importance of transparency in providing information that allows the public to make informed choices.

Checklist for Accountability

Checklist for Accountability

Building upon its past work in this area, Independent Sector has developed a Checklist for Accountability to help organizations strengthen transparency and governance.  Independent Sector recommends that each charitable organization take the steps outlined to demonstrate accountability.  Adapt them to fit your unique circumstances.  The Checklist includes the following items with access to additional resources:

  1. Develop a Culture of Accountability and Transparency
  2. Adopt a Statement of Values and Code of Ethics
  3. Adopt a Conflict of Interest Policy
  4. Ensure that the Board of Directors Understands and Can Fulfill Its Financial Responsibilities
  5. Conduct Independent Financial Reviews, Particularly Audits
  6. Ensure the Accuracy of and Make Public Your Organization’s Form 990
  7. Be Transparent
  8. Establish and Support a Policy on Reporting Suspected Misconduct or Malfeasance - "Whistleblower Protectin Policy"
  9. Remain Current with the Law

The Principles Workbook

The Principles Workbook: Steering Your Board Toward Good Governance and Ethical Practice – This Workbook is designed to help nonprofits and foundations strengthen their governance and ethical practices.  The Workbook addresses each of the 33 principles separately and features five main parts for each principle, along with Progress Worksheets for each section of the Workbook:The Principles Workbook: Steering Your Board Toward Good Governance and Ethical Practice

  • Statement of the Principle
  • Core Concepts
  • Discussion Points
  • Legal and Compliance Issues
  • Resources

Other Resources

Other resources available from Independent Sector include:

Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations                Summary of the Checklist for Accountability and the Accountability Test
Outcomes

Effective governance is an element of ROMA National Goal #5: Agencies Increase Their Capacity to Achieve Results.  Furthermore, CSBG Information Memorandum 82 (issued March 23, 2005) emphasizes that CAA boards are ultimately responsible for assuring that agencies continue to assess and respond to the causes and conditions of poverty in their community, achieve anticipated family and community outcomes, and remain administratively and fiscally sound.

Contact

Panel on the Nonprofit Sector,
202.467.6120