By Mark Hrywna
Governance practices at nonprofits are at the core of a new report from Independent Sector (IS) that suggests, but does not mandate, some 33 principles that nonprofits can follow to develop principles of ethics, accountability and transparency.
The report, the result of 18 months of expert opinion and public comment, is called "Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundation." Released last week by IS and its Panel on the Nonprofit Sector, it is organized into four categories: legal compliance and public disclosure, effective governance, strong financial oversight and responsible fundraising.
Among the suggested items are:
- A charitable organization should have a formally-adopted, written code of ethics with which all trustees, staff and volunteers are familiar and to which they adhere.
- The board should review organizational and governing instruments no less frequently than every five years.
- A charitable organization should neither pay for nor reimburse travel expenditures for spouses, dependents or others who are accompanying someone conducting business for the organization unless they, too, are conducting such business.
- Contributions must be used for purposes consistent with the donor's intent, whether as described in relevant solicitation materials or as specifically directed by the donor.
- An organization should spend a significant percentage of its annual budget on programs that pursue its mission. The budget should also provide sufficient resources for effective administration of the organization, and, if it solicits contributions, for appropriate fundraising activities.
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