Non profit organizations exist for the benefit of the public and must earn the public’s trust through ethical leadership and responsible practices.
The trust earned by accountability and transparency is the most important of assets. Donors will give, volunteers will invest their time, and clients and customers will return to organizations they trust to use their charitable gifts wisely.
Nonprofit organizations are “public benefit” corporations whose purpose is to benefit the public. The board members are often referred to as “trustees,” enforcing idea that the organization’s assets are “entrusted” to its board who have a legal duty to ensure that funds are used to fulfill the organization’s mission.
A code of ethics guides a nonprofit organization’s employees, volunteers, and board members in making ethical choices. Honesty, integrity, and fair practices create a solid foundation that earns the public’s trust.
GuideStar recommends five simple steps that will greatly advance nonprofit transparency
• Nonprofits should regularly update their Web sites with current, detailed program and evaluation information.
• Board members’ and key staff’s names and titles, and bios should be posted on their websites.
• The annual report should be posted on its website.
• An audited financial statement should be posted on the website.
• Every nonprofit should post its IRS non profit letter of determination on its website. The results of a Guidestar survey shows great reluctance to disclose this basic document authenticating an organization’s tax status. As noted above, the letter of determination is a public document. As is true with audited financial statements, disclosure of the letter of determination is a common practice for nonprofits seeking grants from private and public sources.
Council for Non Profits