The Boardsource Nonprofit Governance 2007 Index - Part 2: Highlights of Results on Accountability Issues

First of all let me say that a more complete article on the BoardSource 2007 Nonprofit Governance Index can be found in my newest eNewsletter. If you would like a copy sign up now - right here on my blog. Also, an adapted article will be published soon in Charity Channel's Nonprofit Boards and Governance Review. The complete article, from either source, can stimulate conversation with your Board about actions you might want to take on your own journey to being a better Board. Consider using the material as a handout for your discussion on Board roles and accountability issues....just a thought.

My last post featured a summary of the overall and fundraising results of 2007 Nonprofit Governance Index. This post features the results of the accountability issues.

Accountability Policies - Survey Results
93% Have Directors’ and Officers’ Liability Insurance
88% Have a Conflict of Interest policy
69% Have a written Statement of Ethics
60% Have a Whistleblower’s Policy

There has been a dramatic increase in attention to accountability issues. The percentage of organizations having a conflict of interest policy has increased from 61% in 1994 to 88% today. The range of organizations with a conflict of interest policy is high among every size of organization - ranging from 75% for small (under $500K budgets) to 99% for large organizations (over $10 Million budgets).

Although small nonprofits lag in having accountability policies, they are making progress in all measures. The most catch up is required in having whistleblower(33%) and document retention (41%) policies. I believe that Boards with lawyers and accountants will begin to initiate these policies for their Boards. The changes in the proposed 990s which asks questions about these policies will also have a major impact on their implementation.

Now is a good time for small nonprofits to step back and look at these trends and take proactive steps to implement new accountability policies. It is always better to have good governance policies in place in advance rather than as a result of a problem or crises.

It is only the end of October but here is my suggested New Year's resolution. Charge your governance committee now to develop an updated set of accountability policies to be adopted at your first meeting in 2008. Don't have a governance committee? Start there - appoint one now. Sounds like a plan to me!

Marion Conway Consulting