What can you do now to safeguard public trust?

With the Senate Finance Committee proposing more than two dozen reforms for the nonprofit sector, it’s inevitable that at least some of them will be put into place. Rather than wait for the mandate, many nonprofit organizations and associations are advocating and implementing self-regulation measures now. They include:

1. Create a code of ethics. This formal, written set of policies and how they are enforced should emphasize your organization’s obligations to its employees, stakeholders, donors and the public. Key areas to include are conflict of interest, travel and entertainment, sexual harassment, third-party contracts, outside counsel and executive compensation.
   
   
2. Create an independent audit committee. Members should not be related to your organization; not even your Board treasurer should be on it. The committee’s role is to select an independent auditing firm and review its findings.
   
   
3. Have your CEO (or Executive Director) and CFO (or Finance Director) certify the accuracy of your financial statements. By doing so, they take full responsibility for the information.
   
   
4. Document your control and fraud structure. Identify the checks and balances you have in place to reduce your risk in key areas such as accounting, investments, hiring and facilities.
   
   
5. Provide easy-to-understand financial reports. While a 990 satisfies your legal requirement for providing financial information, it doesn’t put the information into context for most of your audience. So you need to provide the information in easy-to-understand reports or via an annual report. Visual charts and graphs can also help tell your financial story. For more information, see 990 Filing.

If you would like more information, please contact one of our nonprofit experts.