9/20/2012

1

Compliance Programs in Non Profits: The 3 W’s: 

Working Together, Watchdogs, and Wonderful Ideas

Kitty Holt, Plan International USAGayle Macias, World Vision USA

1

Purpose of session

• Learn how two charities foster collaboration (internally and externally); 

• Find out more about Charity Watchdogs / other non‐profit overseers and how to meet their standards; and

• Take home some nonprofit best practices. 

2

9/20/2012

2

Plan International USA• Who we are

Plan International USA is part of Plan International, a global organization that works side by side with communities in 50 developing countries to end the cycle of poverty for children.  

• Who we servePlan works with over 58,000 communities across Africa, Asia, and Central and South America to improve the lives of 119 million people, including more than 56 million children, regardless of their religion, race, ethnicity, or gender. 

• Why we servePlan’s vision is of a world in which all children realize their full potential in societies that respect people's rights and dignity. 

• How we serveWe work side by side with communities to end the cycle of poverty for children, developing solutions community by community to ensure long‐term sustainability. Solutions range from clean water and healthcare programs to education projects and child protection initiatives.

3

World Vision• Who we are

World Vision is a Christian humanitarian organization dedicated to working with children, families, and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. 

• Who we serveWe serve close to 100 million people in nearly 100 countries around the world. World Vision serves all people, regardless of religion, race, ethnicity, or gender. 

• Why we serveMotivated by our faith in Jesus Christ, we serve alongside the poor and oppressed as a demonstration of God’s unconditional love for all people

• How we serveWe provide emergency assistance to children and families affected by natural disasters, civil conflict, work with communities to develop long term solutions to alleviate poverty and advocate for justice on behalf of the poor.

4

9/20/2012

3

1) Working Together

5

Fostering Collaboration

• Typical pitfalls/challenges that face charities when trying to adhere to multiple regulations?

• How can you work within and outside of your organization to foster collaboration and bring about positive change?

6

9/20/2012

4

Examples of collaboration at Plan International USA

• Plan International USA’s Compliance Committee

– An internal collaboration

– Choosing members

– Meeting frequency, agenda and attendance

• Charity Navigator’s Financial Measures Taskforce

– An external collaboration

– Financial metrics undergoing change

– Ability to feed into those changes

7

Examples of collaboration at World Vision

Internal:

• WVI Partnership (Global Office of Accountability)

• Gateway 2 Grants (USG Grant Certification)

• GRC Council (forming) 

External:

• InsideNGO

• InterAction

• Transparency International (Anti‐corruption Handbook)

8

9/20/2012

5

Authorities under which We Work

Federal Law

State & Local Law

WVI (Partnership) Core Documents

WVUS Operational Policies

WVUS Board Standing Policies

External Agency Guidelines

Vision/Mission Statement Ministry Policies Core Values Covenant of PartnershipStatement of Faith

Umbrella ofGovernance

NPO Compliance Networking Group

• Quarterly Conference Calls

• Organizations rotate “hosting” conference calls

• Host organization drafts agenda, with input

• NPO/NGO’s

• 2007, 2009, 2010 & 2011 Survey

• Roster of participating Organizations

• Contact Information to join 

10

9/20/2012

6

SCCE Nonprofit Network

Focus on:

• Issues unique to the NPO sector

• Compliance with US Federal and State Laws and Regulations

• Charitable Fundraising

• Donor Requirements

• NPO Governance

• NPO Industry Standards

11

2) Watchdogs 

12

9/20/2012

7

Charity Watchdogs

13

Watchdog Standards Focus on

• Governance (board, appropriate oversight, min. number members 

and # meetings, compensation, no material conflicts of interest)

• Financial Management (audited financials, 990, how money 

is spent, don’t hoard money, have board approved budget, make financials available)

• Fundraising (accurate, truthful, not misleading in whole or in part; 

use $ as stated; privacy policy; clearly disclose how cause‐related marketing activities will work)

• Effectiveness Measurement – evolving charity evaluation

14

9/20/2012

8

Who are they?

15

Name # standards Alexa traffic rank in U.S. (8/2012)

Self‐regulation or rating agency? (Voluntary / invol?)

ACCORD (formerly AERDO) 11 13,061,859 (WW)

Self‐regulation (vol)

Better Business Bureau 20 434 Rating agency (vol)

Charities Review Council 27 2,865,123 (WW) Rating agency (vol)

Charity Navigator 24 10,443 Rating agency (invol)

Charity Watch (formerly AIP) 3 54,706 Rating agency (invol)

Direct Marketing Association 61 16,412 Self‐regulation (vol)

Evangelical Council for Financial Accountability (ECFA)

7 121,240 Self‐regulation (vol)

Givewell Detailed rsch 134,315 Rating agency (invol)

Great NonProfits n/a, reviews only

31,199 Rating agency (invol)

InterAction 48 218,056 Self‐regulation (vol)

International Aid Transparency Initiative n/a, a standard way to publish data

5,630,326 (WW) Self‐regulation (vol)

Panel on the Nonprofit Sector 33 principles 14,128,086 (WW)

n/a

16

Donor Benefits & Charity Benefits

• Visibility of non-profit transparency

• Rating system supplements donor research

• Evaluations strengthen public confidence in the charity

• Accountability partner

• Marketing tool

• Best practice criteria

• Influence with state and Federal charity regulators

9/20/2012

9

17

Charity Watchdogs are just one of 5 categories of Charity regulators

• Other Charity Regulators Include:– The Federal Government (e.g., IRS, DoJ, FTC, USPS)– The 50 states (Attorneys General, Charity Commissioners, Secretaries of State)– Many counties and municipalities (County and City Prosecutors)– Donors (e.g. corporations, foundations, individuals)

• Each regulates charity fundraising in numerous ways, including in the following areas:– Specific Disclosure Statements on solicitations– Trademarks– Credit Card Donations– Electronic Funds Transfers (“EFT”) – Paid Solicitor Requirements– Commercial Co-Venturers– Corporate Donations and Unrelated Business Income Tax– Events– Donor Acknowledgments and Benefits– Donor Privacy– Grant requirements

What‘s next with Charity Navigator

• Charity Navigator 2.0

• Charity Navigator 2+

• Charity Navigator 3.0

18

9/20/2012

10

19

How we work to meet standards

Plan International USA:• Excel spreadsheet (available after meeting if email me or

give business card)• Break standards up by team and share by team• Staff training, team by team• Proofreading team• All-staff presentations• Build into Board standing policies• Base criticism on standards, not personal beliefs• Be willing to work with others; not be a roadblock

20

How we work to meet standards

World Vision:• External Audit (KPMG)• A133 Audit (USG Grants)• IRS 990 (voluntary as religious organization)• Audit & Risk Management Services (ARMS) IA • Board, BSP (WV Peer Review)• President’s Office (BBB)• Office of Accountability, Compliance, and Ethics (ACE)

(InterAction)• Finance (Charity Navigator)• Mobilization (ECFA) (Communications Review)• Programs (International and US) (USG Grants)

9/20/2012

11

3) Wonderful Ideas

21

Some  best practices from Plan International USA

• Contract review

• Policy on policies

• Monthly HR/Compliance meetings

22

9/20/2012

12

Contract Review Policy

23

Before After

Not clear who should be reviewing contracts

New policy which clearly delineates who reviews contracts (i.e., all fundraising contracts are reviewed by external Legal counsel; all contracts of $25K or more must be reviewed by manager, etc.)

AP receiving bills but unaware what was in contract

No bills will be paid without contractcoming to AP first

Managers not always aware of contracts their staff were signing off on

Accountability – manager of person doing contract must sign off on contract checklist

Policy on Policies

24

Before After

No clear approval process so some policies took forever to be implemented while others were implemented immediately but without correct oversight

While anyone can develop a policy if there is a clear business case, there is a specific review and approval process in place, along with a timeframe

Staff not always aware of policies All staff are notified of new policies.  (The creator of the policy must note how they will inform and train staff on the policy at the time they create or revise it.)

Right people did not give input into organizational policies; policies did not include viewpoint of legal, compliance

ET must be informed of any potential new or changing policies so they can involve staff.  Compliance Committee member, E&CO, and ET must review all policies.  ET determines if must go to outside Legal

Policies in different formats Developed a standard template; all policies must fit into that template

No idea when policy designed, by whom, or who to go to with questions

Policy includes header which details the date approved, who to go to with questions, when it is up for review

9/20/2012

13

Monthly HR/Compliance meetings

25

Before After

Some stepping on toes as the Compliance role is newer but necessarily touches on many HR issues 

Able to clarify who is responsible for what

Some efforts being duplicated (core values, background checks)

Able to work together, and using strengths of different staff, break up responsibilities (for example, ECO researched best practices for background checks and wrote recommendations for the HR team to put in place)

Sometimes, issues build up Issues are discussed and resolved on a monthly basis

Can’t get to everything on our To Do lists Still a problem, of course, but find that when we work together we  can tackle more issues than either of us would working alone.  

Carol A. Morgan

VP Audit & Risk Management

Larry Probus

Senior, Vice President Strategic Solutions

Gayle Macias

Senior Director, Corporate Compliance

Eline Nelson

Senior Internal Auditor 

Kanagasabai Pathmacaanthan

Senior Internal Auditor

Brenda Williamson

Senior Internal Auditor

Paul Duke

Sr. Enterprise Risk Manager

WVUS Audit & Risk Management Services (ARMS)May 2012

Board of Directors

9/20/2012

14

Some  best practices from World Vision US

Office of Accountability, Compliance, and Ethics (ACE)• Policy and procedure administration• Code Guidebook• Internal reporting – WV Partnership Peer Review (Governance, Core Documents, Policy)

• Integrity Hotline (ARMS, HR, Legal)• WVUS Communications Review• InterAction PVO Standards and Self‐Certification Plus• Evangelical Council for Financial Accountability (ECFA)• ARMS/Enterprise Risk Management (ERM)• Partnering internally: Finance, Grants, HR, Legal

27

Tips for Nonprofits

• File required tax returns and reports timely

• Pay reasonable compensation

• Remain true to your mission

• Use assets for NP use only

• Have a Conflict of Interest Policy/Disclosure

• Limit any unrelated business income

• Be responsive to correspondence from the IRS and other government agencies/watchdogs

• Wisdom in the use and risks with social media

28

9/20/2012

15

Questions?

• Feel free to ask questions now or contact us at:

– Kitty Holt, Plan International USA –kitty.holt@planusa.org

– Gayle Macias, World Vision –gmacias@WorldVision.org

Let us know if you want to join the Non‐profit Compliance Networking Group or want a copy of the charity watchdog standards

29