Pass to Excellence. Setting Yourself Apart Please take a moment to identify an accomplishment of...

Pass to Excellence

Setting Yourself Apart

Please take a moment to identify an accomplishment of your organization that you feel truly set you apart from others in the field and/or represented the ultimate in fulfilling your mission.

Discuss with your partner and try to identify two key things the organization did to make this extraordinary accomplishment happen

Welcome to Standards for Excellence®

Pass to Excellence Agenda:

Introductions Overview of the Standards for Excellence Overview of the code Assessing & benchmarking your organization Implementation strategies Certification

Introductions

Name Organization you represent - mission Your organization’s accomplishment What is your experience/knowledge of the

Standards for Excellence How do you hope this workshop will help your

organization

America’s Nonprofit Sector

Who are we?We are churches, hospitals and schools. We are

environmental activists, developers and preservationists, and social service agencies.

Wherever there is a need for services, America’s nonprofit sector is there to meet that need.

In 1983 there were 300,000 nonprofit organizations

In 1993 there were 750,000 nonprofit organizations

In 2013 there were over 1.4 million registered nonprofit organizations in the United States.

All Nonprofits Depend upon the Public and the Public Trust

Tax exemption Tax deductible dollars through

contributions Ability to receive foundation grants Recruitment of volunteers, including

board members Attract staff into nonprofit sector

Competition Among Nonprofits

• Funding from all sources

• Volunteers

• Staff

• Board members

Greater Scrutiny

Vicious cycle of lapses and increased regulatory/legal scrutiny

Increased consumer expectations and sophistication

Many donors and the public are concerned about more than simply program administration and fundraising ratios

Frank Renile/Stock Illustration RF/Getty Images

How to differentiate from the pack?

David Fairfield/Photodisc Green/Getty Images

Others Looking at Best Practices

• BBB Wise Giving Alliance and local BBB chapters

www.give.org

• Standards for Excellence Institute www.standardsforexcellenceinstitute.org

• American Institute of Philanthropy www.charitywatch.org

• National Center for Responsive Philanthropy• Charity Navigator www.charitynavigator.org

• Combined Federated Campaign www.opm.gov/CFC/

Websites educating about nonprofits and their practices

• GuideStar.org

• Greatnonprofits.org

• Idealist.org

• Catalogue for Philanthropy(powered by

GuideStar)

• Smartvolunteer.org

• Volunteermatch.org

• Nonprofit Search, Giving Matters (programs formerly

known as Donor Edge)

• Volunteertoday.com• Shareyourself.org (United Way)

• Networkforgood.org (powered by

GuideStar and Volunteer Match)

• Volunteersolutions.org• GoodBoardnetUSA.org (powered by Network for Good)

• Charity-charities.org• Directory of America’s

charities (US News & World Report/

powered by GuideStar)

• Local volunteer recruitment

centers

IRS Emphasis on Best Practices

“…the highest ethical standards and principles are essential to maintaining the public’s trust during these times of economic duress when so many people will come to depend on your services. . .

“We will continue to insist that the sector be squeaky clean, and that the high idea of public benefit that underlies tax exemption is honored.

“Indeed . . . I believe all of us must follow best practices in organizational leadership and management.”

- Douglas Shulman, Former Commissioner of the Internal Revenue

IRS and Nonprofit Best Practices • Conflicts of interest

• Document retention and disclosure

• Whistleblower policy/Confidential means to report impropriety

• Reimbursement policy

• Joint venture policy

Form 990 |Return of Organization Exempt From Income Tax

Department of the Treasury Internal Revenue Service

IRS and Nonprofit Best Practices

• Compensation policy

• Gift acceptance• Solicitation Policy (federal and state laws,

accurate, truthful, candid)

• Auditor Independence

• Methods to uncover family and business relationships

Form 990 |Return of Organization Exempt From Income Tax

Department of the Treasury Internal Revenue Service

This is why…

We need to pay attention to all of the organizational issues that make nonprofit

organizations tick. Once you are aware of these

organizational best practices, your organization can focus increased energy on achieving your mission and running

your programs. Stay competitive and stay in business.

Standards for Excellence® Code

Introducing the Standards for Excellence Institute

A national initiative launched to promote the highest standards of ethics and accountability in nonprofit governance, management and operations

Uses as a foundation the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector

Working around the nation to strengthen nonprofits

Standards for ExcellenceDevelopment of the Program

1996: Volunteers started developing the code 1998: Maryland Association of Nonprofits Launched the first

Standards for Excellence Program 2001: Began replicating the project nationally, pilot effort 2004: Launch of the Standards for Excellence Institute 2005: Launch of National Standards certification program First group of Licensed Consultants enters the program 2007: First organizations to earn the Seal of Excellence through the

Standards for Excellence Institute 2011: Celebration of 10 Years of the Standards for Excellence

Program and Standards for Excellence programming available around the country

2012: First groups recognized under Standards for Excellence Tier One

Standards for Excellence® Replication Partners 2013

States with Standards for Excellence Partners and Consultants

How do you become a well governed and accountable organization?

Brainstorm: What are some things that you feel nonprofits

are doing well to demonstrate their good governance and accountability?

What is the Standards for Excellence Code?

8 Guiding Principles and 55 Standards Mission and Program Governing Body Conflict of Interest Financial and Legal Human Resources Openness Fundraising Public Affairs and

Public Policy

Standards for Excellence: An Ethics and Accountability Code For the Nonprofit Sector

Self Assessment

Mission and Program

Defined Mission Statement

Evaluation

Program Service Standards

Governing Body

Roles and Responsibilities

Board Composition

Board Conduct

Conflict of Interest

Disclose Everything

Define Interested Parties

How Decisions Are Made? Conflict of Interest

Policy Conflict of Interest

Statement Disclosure Forms

Human Resources

Personnel Policies

Volunteer Policies

Employee Evaluation

Employee Orientation

Financial and Legal

Budgets

Audits

Financial Reports

Financial Impropriety

Written Financial Policies

Legal Compliance

Annual Report:•Mission statement•Report on program activities•Basic financial information, including summary statement of financial position and summary statement of activities•List of key staff•List of board members

Openness

Fundraising

Fundraising Activities

Donor Relations/Privacy

Acceptance of Gifts

Fundraising Personnel

Public Affairs and Public Policy

Public Policy Advocacy

Public Education

Promoting Public Participation

Standards for Excellence An Organizational Tool

A model for nonprofit organizations to implement accountability in their management & governance practices

A framework with a clear statement of the organization’s commitment to best practices

A self-regulatory tool to ensure public confidence and public support

A demonstration of the organization's commitment to public service

Most Challenging Standards

• Conflict of Interest Policy/Statements (61%)

• Program Evaluation (55%)

• Advocacy Policy (51%)• Confidential Means to

Report Impropriety (47%)• Financial Policies (46%)

• Gift Acceptance Policy (43%)

• Board Development (39%)

• Employee Orientation (39%)

• Internal Review of Legal, Regulatory Requirements (36%)

Providing the Help Needed

• Educational Materials Specifically supporting the Standards for Excellence Guidelines

• Direct Organizational Assistance/Support

• Standards for Excellence Clinic Series• Other Training Courses• Licensed Consultant Training• Opportunity to Earn Seal of Excellence

voluntary accreditation program

Other Resources for Leaders of Nonprofits

• Management support organizations• Sometimes housed at community foundations,

United Ways• Sometimes free standing entities• Often regional or metropolitan based

• University or college based nonprofit academic centers

• Private consultant firms• Nonprofit or for profit

• Corporation for National and Community Service• State Offices of Service and Volunteerism

Other Resources for Leaders of Nonprofits

• International Center for Not for Profit Law (ICNPL)

• Independent Sector• Alliance for Nonprofit Management• National umbrella associations focused on your

industry or issue area• National “Capacity Builders” focused on

particular issues • Nonprofit Center for Risk Management• Alliance for Justice• Charity Lobbying in the Public Interest

The Standards for Excellence®

Voluntary Certification Program

Introducing: Tiered recognition

• Easier to navigate

• Go at your own pace

• Start at level one or three

• Each tier builds on the previous!

Tier One: Essentials

Adherence to Basic Legal, Regulatory, and Governance Practices

Benefits Lower initial cost Responsive to limited time and resources Formally recognizes achievement and your

organization’s progress towards full Standards for Excellence certification.

Informal recommendations from program staff for future improvement and application to next tier.

Tier One: Essentials

Application process Submission of the Tier One application

package and checklist and application fee. Completion of a free online self-

assessment and orientation is also required.

Program staff will complete the formal review of the application.

Organizations can remain at this tier for a term of three years

Tier Two: Enhanced

Enhancing the Foundations of Nonprofit Management and Governance

Benefits Discounts for quickly moving through the tiers. Ability to state completion of the Standards for

Excellence Enhanced Tier. Additional informal recommendations from

program staff for future improvement and application to next tier.

Tier Two: Enhanced

Application Process Prior completion of Tier One. Submission of the Tier Two application

package and checklist and application fee. Completion of the free online self-

assessment. Program staff will complete the formal review

process, with final approval by the Ethics Standards Committee.

Organizations can remain at this tier for a term of 3 years

Tier Three: Certified

Standards for Excellence Seal Holder All 55 Standards are included in the third tier Benefits

Earn and display the Seal of Excellence State that their organization is “Certified Under the

Standards for Excellence”, “Awarded Standards for Excellence Seal”, or “Approved Under Standards for Excellence” or “is a Standards for Excellence® Accredited Organization.”

Tier Three: Certified

Application Process Can apply directly for Tier Three, or previously complete

both Tiers One and Two. Submission of the application package and checklist and

application fee.

Review Process Program staff will first review the application. Anonymous peer reviews will evaluate the application

second. Lastly, the Ethics Standards Committee must approve the

staff and peer reviewers’ recommendation for certification.

The Standards for Excellence certification will be awarded for three years.

Submit application to

Standards Institute

Is the application complete?

Undergo 2nd review by

Peer Reviewers

Have the standards been

met?

Undergo 3rd review by

Ethics Standards Committee

Should this organization be

approved?

Phase I Phase II Phase III

The Review Process

Characteristics of Certified Nonprofits

Questions and Answers

Organizational Assessment/ Implementation Worksheet

Mission and Program

Main Topics

A. Defined Mission Statement

B. Organizational Evaluation

C. Program Evaluation

D. Program Service Standards

Organization’s Written Mission

Does your mission communicate:

– Values?– Purpose?– Activities?

Are organization’s activities consistent with mission? Keep the mission

front and center!

Defined Mission Statement

Revisit the Mission

Every three to five years

Question if mission was accomplished

Is mission consistent with current programs?

Has context changed (social, demographic, environmental)?

Organizational Evaluation

Program evaluation should consider:

Quality

Quantity

Outcomes related to costs/program efficiency

Outcomes for program participants/program effectiveness

Program Evaluation

Helpful Tool:A logic model

Program service should consider:

Treat the people with professionalism and respect.

Policy on confidentiality:

Grievance procedures

Assess satisfaction of program participants

Program Service

Are your clients happy with

your services?

Seeking a Few Volunteers!Annual Reports Anyone?

Governing Body

Main Topics

A. Roles and Responsibilities

B. Board Composition

C. Board Conduct

Does your board have an annual work

plan?

Board Responsibilities

Long Term & Short Term Planning:

Goals and Objectives

Staying on Mission

Evaluation/Reflection


Setting Policy

Financial

Personnel

Volunteer

Fundraising

How often should your board review financial

statements?


Annually approving the budget Assess finances

through internal financial statements

Review/approve annual audit

Review allocation of resources


The Board & the Executive Director: Hire and supervise

Executive Director (includes annual evaluation)

Set Executive Director’s compensation


Reviewing the Organizations Compensation Structure Appropriateness of

overall salary structure

Consider developing a compensation philosophy statement

Review comparable salaries

Small Group Activity

Discuss the process for evaluating the Executive

Director for your organization.

What are some of the questions you ask?

Do you talk to other staff?

Write down common themes to share with the full group

Board Composition

Main TopicsA. Committed

Individuals

B. Employees on the Board

C. Number of board members

D. Term limits

E. Diversity

F. Compensation

Board Composition

Commitments of Board Members

Committed to the mission

Possess skills to accomplish the

mission

What are some challenges to having

staff as voting members of the board?

Board Composition

Employees as Voting Board Members

Permitted by law and by the Standards

Employees must: Abstain from votes related to

employee salary or benefits Abstain from votes related to

evaluation or performance

Board Composition

Size of Board

Minimum of 5

Preferably more than 7

Unrelated Board members

Setting Term LimitsTypically:

2 three-year terms

Or 3 two-year terms

What are the benefits to having term limits?

Board Composition

Board Composition

Board Diversity Representative of community

served Race and gender often

considered Other social or demographic

characteristics: Area of expertise Age Geographic area Income status Program participant

status

Board Composition

Board Members and Compensation No compensation for board

service

Reimbursement for expenses permitted

Payment for contracted services permitted with adherence to conflict of interest policy

Board Composition Worksheet

Start the process of completing the board composition worksheet based on your own board of directors. (Fill as much information as you can)

Discuss in your group what you learned about your board from viewing the matrix

Conduct of the Board

Main TopicsA. Responsible for its

own operations

B. Clear Expectations

C. Attendance

D. Board Minutes


Responsibility for its Own Operations Education & Training

Selection of New Board Members

Development

Periodic Evaluation of Performance


Establishing Expectations Clear, written expectations Reviewed by all board

members Acknowledgement of

Expectations Board evaluation consistent

with expectations Specific job descriptions for

officers, committees sometimes useful


Frequency of Meetings

No less than four times per year

Telephonic or internet meetings appropriate if acceptable under law


Board Participation

By laws or board job description should address

Attendance Participation Process to address

noncompliance Removal of board

members


Meeting Minutes Maintained in a central

location Signed by prepared Presented for approval at

next board meeting Provided to all board

members

Conflict of Interest Policy

Criteria for Conflict of Interest Policy Written policy For Board, Staff, and

Volunteers Should include:

What is a conflict? Disclosure procedures Decision by uninvolved

board members Board approval

Conflict of Interest Statements

Elements of a Conflict of Interest statement Annual disclosure of

interests

Should be signed at the organization’s initial affiliation and annually thereafter

Case study

What do YOU think?

You are on the board of a low income home building organization. In your full time job, you own a hardware store and often donate supplies to support the organization on whose board you serve. Other hardware stores in your area also make generous contributions to the cause. Because of your position on the board, you recently learned that the organization will building its 100th house and to commemorate this occasion, the organization’s celebrity spokesperson, a hugely popular and well known sports star, is inviting several other sports and movie stars to attend the dedication of the home. It is the custom of the organization to place a sign recognizing the firms and individuals who donated services as a backdrop to the stage being used for

the home dedication.

Small Group Activities

Real Life Examples

Main Topics

A. Annual Reports

B. Public Access

Openness

Basic Elements

A. Mission statement

B. Program narrative

C. Basic financial

information

D. Board of directors

E. Management staffContent trumps appearance!

Annual Report


Review annual report and discuss whether the meet the requirements indicated in the Standards

Full Group Discussion

Communicating with the public

Disclosure laws

What do you do if someone shows up at the door asking for a copy of your financials?

• IRS Form 990, 3 yrs• Form 1023• Determination letter

Public Access

Sources of Operating Revenue

Private contributions 13.3% Individuals Foundations Corporations

Fees for services and goods from govt 23.9% Government grants 8.3 %

Program Revenue (fees) 49.6%

Investment Income 2.8% Other 2.1 %

Source: The Nonprofit Sector in Brief, Public Charities Giving and Volunteering, 2012.

102

Philanthropy in the US

Individual Giving & Bequests

81%

Corporate Giving5%

Foundation Grantmaking

14%

Total Giving:$290.89 Billion

103Source: Giving USA 2011

Fundraising

Main TopicsA. Fundraising

Activities

B. Donor Relations/Privacy

C. Acceptance of Gifts

D. Fundraising Personnel


How do you calculate a

fundraising ratio?

1) Fundraising Costs

Use the 990 to determine ratio

3-5 years

Not per event/proposal

Organization A Organization B

Direct Public Support

250,000 100,000

Indirect Public Support

50,000 50,000

Net Revenue Special Events

150,000 100,000

Fundraising Expenses

200,000 50,000

What is the Fundraising Ratio for Each Organization?

A = B=



2) Solicitation Material

and Receipts should: Identify the organization Identify the mission Identify the intended use

of funds Include all required

disclosure statements (State and IRS)

State Disclosure Requirement for Solicitations

INSERT RELEVANT INFORMATION FOR YOUR STATE, JURISDICTION


3) Statements about the Use of a Contribution

4) Honoring donor intentions

What is the donor bill of rights?

Donor Relationships and Privacy

Respecting Donor Privacy

Donor Anonymity

Removal of donor’s names from lists upon request

Honor requests to stop repeated mailings

Solicitations free from undue influence or excessive pressure

Acceptance of Gifts Policy(Board Approved)

Procedures that determine limits for Gift Acceptance Type of gifts Donor source

Purposes for which gifts will be accepted

Type of property accepted

Whether to accept an unusual or unanticipated gift


Develop a basic gift acceptance policy covering the most important components

“Test drive” your policy!

Why shouldn’t you pay fundraisers

commission?

Fundraisers

1) Fundraisers should not be compensated on a commission or based on % of monies raised

2) Use only properly registered fundraising consultants

Fundraisers

3) Monitoring those who Solicit on Your Behalf

Staff, volunteers, consultants, contractors, businesses, other organizations

Organization must be responsible in all cases where money is raised in its name

Human Resources

Main TopicsA. Personnel Policies

B. Volunteer Policies

C. Employee Evaluation

D. Employee Orientation

Personnel Policies

Should include: Grievance

procedures Confidentiality Staff development Working conditions Employee benefits Vacation and sick

leave Employee evaluation

Volunteer Policies

Volunteers policies and procedures should address:

Initial assessment/ screening

Assignments and work responsibilities

Ongoing supervision and evaluation

Opportunities for advancement

What are some of the benefits of consistent

employee evaluations?

Employee Performance Evaluation

Based on job description, performance goals

At least annually

Should not replace other periodic discussions about performance

Employee Orientation

Formal Orientation Process

Distribute Employee Handbook

Orientation Checklist

Small Group Activities

Peer to Peer Exchange Employee Orientation

Success Stories Challenges

Employee Evaluation Success Stories Challenges

Financial and Legal

Main TopicsA. Budgets

B. Audits

C. Financial Reports

D. Financial Impropriety

E. Written Financial Policies

F. Legal Compliance

Annual Budget

Board Approved

Two Types Operating Budget Capital

Contain same categories as the Form 990

Expenses and Revenues

Annual Budget Audit

Budget > $500,000 Financial statements

accurately reflect finances of the organization

Recommended if budget exceeds $500,000

Management Letter

What are some indicators of good

financial performance?

Financial Reports

Should be prepared at least quarterly

Reported to board

Budgeted vs. Actual revenue and expenses

Reporting FinancialImproprieties

Foster a culture of openness

Methods for reporting improprieties Board

Representative Suggestion Box Ethics Hotline

Financial Policies (Board Approved)

Investment of Assets

Internal Controls

Unrestricted Net Asset (Reserves)

Purchasing Policies

Case study

What do YOU think?

You are the associate director at a medium sized nonprofit literacy and mentoring organization with several branch offices. While visiting one of the branch offices, you learn that the branch is in dire need of hand cleanser. Rather than adhering to the normal channels for purchasing supplies, you elect to stop by a store near the office, purchase a large quantity of cleanser and drop it off at the branch.

Legal Compliance andAccountability

Assess need for insurance coverage : General Liability

Insurance

Directors and Officers Insurance

Board makes decision not to insure

Compliance with both state and federal law

General liability and directors and officers coverage

Periodic internal review of regulatory requirements

Legal Compliance andAccountability

Public Affairs and Public Policy

Main TopicsA. Public Policy

Advocacy

B. Public Education

C. Promoting Public Participation

Public Policy / Advocacy

What is the difference between advocacy and lobbying?

Advocacy is defined as active support for a cause, idea or policy.

Lobbying generally consists of communications that are intended to influence specific legislation.


Nonprofits should take responsibility to keep their public policy activities within the scope of all federal, state, and local laws;

Must remain strictly nonpartisan

Public policy activities should be described on state disclosure reports and IRS form 990.

Developing a Public Policy/ Advocacy Policy for your organization

What should you consider?

Who needs to be involved?

How often do you need to consider positions on issues?


Public Education

Ensure that your public education and advocacy documents are:

Factually accurate

Have sufficient information

Non-partisan

Promoting Public Participation

Remain nonpartisan in all of your activities

Case study

What do YOU think?

The founder and president of your board has just announced that she is running for State Senate. She is well known because of her long-standing association with the organization and the contacts she has made on its behalf over the years. How would you respond if you found that:

Her campaign chair wants you to place one of her campaign signs in the window of the organization’s office or in front of its office building?

That she plans to give the board list to her campaign manager so that the board members may be asked to be “block leaders” for her campaign?

Her campaign chair has asked to borrow a copy of the organization’s major donor list that is periodically distributed to board members in order to solicit contributions for the campaign?

The president of the board is planning to announce her candidacy on the front steps of the organization’s headquarters?

She plans to remain on the board during your campaign?

ConclusionWrap Up and Evaluation

“Displaying the Standards for Excellence® seal provides reassurance to donors that they are contributing to an agency whose services are of high quality and whose administrative and financial practices are sound.”

--John F. Plaskon, Executive DirectorCrossroads Community, Inc.

Benefits of Earning the Seal of Excellence

“To review every level of PLASE’s program and operation helped us to revisit, fine-tune and improve -- like a spring housekeeping or renewal.”

--Mary C. Slicher, Executive Director, Project PLASE, Inc.


“An important outcome of this process has been better trained staff and volunteers that have a stronger understanding of our mission, philosophy and operating systems. We believe we are a stronger organization, as a result.”

--John Sciavone, Executive Director St. Vincent de Paul of Baltimore


“Since the Resource Center received the Standards for Excellence three years ago, we have received funding from foundations that never looked at us before.”

--Prince George’s Child Resource Center


“. . .very specific and thorough comprehensive guideline for what we should look like as an organization if we are to live up to our full potential.”

--Hopewell Cancer Support


“Having the seal has been very powerful… having achieved the seal has

absolutely made a difference . . . especially in our fundraising.”

--Jeannette Mendonca, Hospice Caring, Standards for Excellence Seal Holder


Seal holders herald their Standards for Excellence achievement in a number of different ways:

• Grant proposals • Form 990 • Online databases of charitable organizations• Inserting the Seal on letterhead, business

cards, websites, offices, vehicles, and more


How will you proceed in your own organization?

Your Next Steps

What can I do tomorrow?

• Share the assessment exercise with your colleagues

• Decide what changes can be made first• Consider tackling the easy things first!• Think about what changes can be added to

your organization’s work plan• Get your board and staff involved in embracing

best practices• Consider earning the Seal of

Excellence

Assessment & Planning

Take a Self-Assessment

Assemble Your Team

Develop & Follow Work plan

Access TA, Training, Resources

Take Stock of Progress

Apply for Tier One or Full Certification

What’s already in place?

Who should be involved?

What requires board approval?

Should include deadlines

What models are

available?

Turn YOUROrganizational Assessment/

Implementation Worksheet INTO YOUR PLAN

Providing the Help You Need

Educational materials specifically focused on the Standards For Excellence code

Direct technical assistance for members Materials provided on your Flash Drive

Educational resource packets Application Starter Kits Implementation and Planning Tool Program Evaluation tools

Acing the application review process

Submit a complete application and checklist.

Provide concise, clear explanations.

Less is more.

Don’t over think it!

Budget time to respond to staff questions.

Contact staff for guidance.

What to Expect - Post Application

Confirmation

Depending on queue, 1 – 3 months to complete review

Staff Review Letter

Staff Review Response (2 weeks to reply)

Notification of Recognition

Recommendations & Improvements

Tier Two Tools

How do organizations earn the Seal?

Staff Review

Peer Review

EthicsStandards Committee Tier One

Tier Two

Certification Certification

Tier Two

Certification

Evaluation

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