Your Nonprofit Must Make Time for Accountability
December 10, 2020

“Accountability” may seem like one of those popular management concepts you know would be nice to implement if your nonprofit had the time and budget. But not only is accountability essential to your nonprofit’s health and efficacy — affecting everything from donations to grants, hiring to volunteering, board fiduciary duty to employee morale — it’s also easy to adopt.

Start with Laws and Rules

Accountability starts by complying with all applicable laws and rules. Make sure new staffers and board members understand these as well as your nonprofit’s code of conduct. In fact, ask employees and board members to sign an ethical code — and hold them to it.

As your organization pursues its mission, it must do so fairly and in the best interests of its constituents and community. Your status as a nonprofit means you’re obligated to use your resources to support your mission and benefit the community you serve. Evaluate programs accordingly, both in respect to the activities and their outcomes.

Put governance front and center

There can be no accountability without good governance. This starts with your nonprofit’s executives and managers, who must be accountable for failures as well as successes. But ultimately, governance is your board’s responsibility. Your board needs to understand the importance of its fiduciary duty and focus on the big picture, not the process-oriented details best handled at the staff or committee level.

For example, management might prepare internal financial statements and review performance against approved budgets on a quarterly basis. But it will present these statements to the board (or its audit or finance committee) for review and approval. Your board is also responsible for establishing and regularly assessing financial performance measurements.

Make Your Efforts Public

Communication is a big part of accountability. Your annual report, for example, is designed to summarize the year’s activities and detail your nonprofit’s financial position. But the report’s list of board members, management staff and other key employees can be just as important. Stakeholders want to be able to assign responsibility for results to actual names.

Your nonprofit’s Form 990 also provides the public with an overview of your organization’s programs, finances, governance, compliance and compensation methods. Notably, charity watchdog groups use 990 information to help them evaluate nonprofits on fiscal responsibility, charitable impact and other qualities.

Ongoing Process

Implementing accountability isn’t a one-time act but an ongoing process. Consider accountability when evaluating staffers, volunteers and, especially, board members. Contact us for more ideas about running an ethical and effective organization.

© 2020

You might also like

Help Donors Help Your Nonprofit with a Planned Gift

Help Donors Help Your Nonprofit with a Planned Gift

Most established nonprofits are already equipped to solicit and accept planned gifts. But if your nonprofit is new to planned giving and doesn’t yet understand the long-term advantages of deferred gifts, it’s a good time to get up to speed. You’ll likely need to...

read more
Want to Boost Income? Consider a For-Profit Subsidiary

Want to Boost Income? Consider a For-Profit Subsidiary

Just because you run a nonprofit organization doesn’t mean you can function on low or no income. Although your nonprofit’s tax-exempt status prohibits certain money-making activities, you may be able to create a for-profit subsidiary that isn’t hampered by such...

read more
Don’t Let IRS Compliance Issues Drag Down Your Nonprofit

Don’t Let IRS Compliance Issues Drag Down Your Nonprofit

In recent years, the IRS has increased its scrutiny of tax-exempt organizations. Most nonprofits that fail to file Form 990 for three consecutive years will have their exempt status revoked automatically. The IRS is also cracking down on nonprofits that don’t properly...

read more