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A Survey of Standards for Charitable Accountability
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Nonprofit organizations in the U.S. are largely free from government oversight and regulation. The nonprofit sector is truly private. To a great extent, a U.S. nonprofit organization is answerable to no one but its board of directors, volunteers who agree to take on the responsibility for the organization. The IRS standard that qualifies an organization for deductible donations is based on a simple list of qualifying purposes. This is a survey of standards that various organizations use to further measure the accountability of nonprofit organizations. |
Included in this survey: Council of Better Business Bureaus National Charities Information Bureau Charities Review Council of Minnesota ECFA (Evangelical groups) InterAction Maryland Nonprofits Minnesota Council of Nonprofits Sample United Way standards NSFRE ICFO (proposed international standards) | |||
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These independent U.S. organizations have extensive standards and and an ongoing review of the organizations they evaluate. They deal with only very large nonprofit organizations that have nationwide programs and fund raising. |
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Council of Better Business Bureaus Standards for Charitable Solicitations. CBBB sponsors a Philanthropic Advisory Service as an educational program. Its focus is on large nonprofits that solicit funds nationally or have national or international program services. PAS researches nonprofit organizations it has received inquiries about and reviews them using these standards. PAS issues detailed reports on the nonprofit organizations it reviews. CBBB is an umbrella organization for the many local chapters of the Better Business Bureau. CBBB has a board that consists chiefly of representatives of large corporations and of the local chapters. |
National Charities Information Bureau Standards in Philanthropy. NCIB reviews U.S. nonprofits from the perspective of contributors, primarily large foundations. It reviews organizations with a national scope of operations. The NCIB board is predominantly affiliated with foundations, although some are affiliated with nonprofit organizations. NCIB collects information from the nonprofit organizations it researches and from public sources. It uses these standards to evaluate the nonprofit and produces a detailed report including a summary of financial data. | |||
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There have been attempts to perform independent evaluation of local charities, although these efforts are far from commonplace. |
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Charities Review Council of Minnesota Standards. Somewhat like CBBB and NCIB at the national level, the CRC of Minnesota has a board of corporate and foundation representatives. The statement of standards includes guidelines that describe the evaluation process. |
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Various groups of nonprofit organizations have set up standards for themselves. These standards may be used for certification by a sponsoring organization, for self-assessment by the organizations, or as guidelines for boards to implement with no specific review process. |
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Evangelical Council for Financial Accountability Seven standards of responsible stewardship. EFCA establishes standards for U.S. nonprofit organizations with a Christian evangelical affiliation. Member organizations are randomly selected for on-site visits by an ECFA representative to confirm compliance with the ECFA membership standards; to identify areas of possible noncompliance; and to give support to the member organizations in moving toward full compliance with the ECFA standards. (There is a similar organization in Canada, the Canadian Council of Christian Charities (CCCC).) InterAction Private voluntary organization (PVO) standards. InterAction is an association of US organizations engaged in international humanitarian relief efforts. PVO is a term used in an international context to refer to nonprofit organizations. In addition to standards applicable to nonprofits generally, these standards include standards specific to work in international humanitarian relief. The standards describe a self-certification process that does not involve outside review. |
Maryland Association of Nonprofit Organizations Standards for Excellence. Minnesota Council of Nonprofits Principles and practices for nonprofit excellence. These are two examples of state nonprofit associations that have established standards. The standards are broadly similar in content, but their application is different. The Maryland standards are advanced as a basis for voluntary self-regulation and evaluation by the Maryland association. Minnesota proposes the standards as guidelines to inform nonprofits and the public and disclaims their use for evaluation purposes. (In Minnesota, charity evaluation may be performed by the Charities Review Council of Minnesota, also included in this survey.) | |||
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Other groups, United Way, international organizations, and professional groups, have established standards and guidelines that have some relationship to nonprofit accountability. |
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United Way of Orange County (California) Eligibility requirements. United Way of Portage County (Ohio) Agency Admission Standards . Accountability is only a part of the consideration in belonging to a local United Way campaign. These standards provide a sample of the expectations for a United Way charity. National Society of Fund Raising Executives Statements of Ethical Principles and Standards of Professional Practice. These are standards of personal accountability for members of a professional organization. As such, they do not include any provision for organizational review, but the standards include some additional considerations regarding responsible nonprofit activities. |
International Committee on Fundraising Organisations International standards. ICFO is an association of over a dozen national accrediting bodes in North America, Europe, and Australia (including NCIB, ECFA, and CCCC, mentioned here). It has proposed standards for nonprofit accreditation worldwide. They propose that in each country there be an independent (that is, non-government) monitoring body to evaluate performance against the standards. | |||
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