Principles for Good Governance and Ethical Practice
The organization Independent Sector provides nonprofits with a guide that describes 33 principles for good governance and ethical practices. Some of the suggestions in the guide include the following:
- A substantial majority of the board of a public charity, usually meaning at least two-thirds of its members, should be independent. Independent members should not: (1) be compensated by the organization as employees or independent contractors; (2) have their compensation determined by individuals who are compensated by the organization; (3) receive, directly or indirectly, material financial benefits from the organization except as a member of the charitable class served by the organization; or (4) be related to anyone described above (as a spouse, sibling, parent or child), or reside with any person so described.
- The board should hire, oversee, and annually evaluate the performance of the chief executive officer of the organization. It should conduct such an evaluation prior to any change in that officer’s compensation, unless there is a multi-year contract in force or the change consists solely of routine adjustments for inflation or cost of living.
- The board of a charitable organization that has paid staff should ensure that the positions of chief staff officer, board chair, and board treasurer are held by separate individuals. Organizations without paid staff should ensure that the positions of board chair and treasurer are held by separate individuals.
- A charitable organization should establish clear, written policies for paying or reimbursing expenses incurred by anyone conducting business or traveling on behalf of the organization, including the types of expenses that can be paid for or reimbursed and the documentation required. Such policies should require that travel on behalf of the organization is to be undertaken cost-effectively.
The full article can be found on the organization's website. |
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Conflict of Interest Policy
Charitable organizations are frequently subject to intense public scrutiny, so it is important for the organizations to avoid the appearance or actuality of a private benefit to individuals who are in a position of substantial authority. A conflict of interest policy is essential for protecting the charity from unethical or illegal practices (or the appearance of them). In addition, Form 990 asks if the organization has a conflict of interest policy, and this document is public information. The IRS has laid out several reasons behind the need for such a policy. |
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Preparing for the Corporate Tax Credit
In August 2015, ADOR notified STOs that the corporate tax credit cap was reached from waitlist applications, just one month after the donation window was opened for the year (and the date to submit an approved application may have been even earlier). Now is the time to start planning for the 2016 credit. Some helpful hints include having your corporations ready to donate, with the amount of their donation set, early in the year. The application for 2016 should be released in June, so corporations can complete the application ahead of time. Many STOs plan to have their staff submit the applications at midnight on July 1st to ensure they are first in line.
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