1,308 miles in a Toyota

We're nearing the end of the public input phase of the 2009 Accountability Standards Project. Since the preliminary standards were unveiled in June, we’ve heard from nonprofit leaders, individual donors and grantmakers. The quality, thoughtfulness and diversity of feedback has been incredibly helpful in making sure the final set of Accountability Standards the Board of Directors will vote on at the October meeting are truly the reasonable expectations for accountable nonprofits.

I wanted to briefly look back on these past few months and summarize some of what happened. All told, here are the numbers:

• 7 town halls and 4 large group meetings across Minnesota and North Dakota
• More than 350 people attended a town hall and gave us feedback
• 1,308 miles logged in Rich Cowles' Toyota Corolla traveling to all the town halls.

Add this to the 12 focus groups we did this past spring, the comments on this blog, and individual feedback from people via email or phone calls and you get a healthy sized amount of data to sort through and digest. Of course, this is a fantastic challenge to address. The strong interest and general support for these standards and the work of the Charities Review Council speaks highly to the fact that here in the upper-Midwest we have a vibrant nonprofit and philanthropic sector that understands the importance of accountability and transparency.

Although there are a number of possible changes to the preliminary standards that the Program Committee and then the Board of Directors will have to look at, I wanted to highlight a few of the stronger bits of feedback that we heard. Top on this list, surprisingly to me, is the potential for adding board term limits to the Board Length of Service standard. As one town hall attendee said:

“I frequently experience that nonprofits who are having board problems, regularly have no term limits and board members who have been on the board for 10+ years."

This sentiment was echoed many times over, from Fargo to Mankato to Minneapolis, and is something that will be considered as a possible addition to the Accountability Standards.

The other strong piece of feedback received was around the Financial Health standard and, in particular, the requirement of cumulative growth over the past 3 years in unrestricted net assets. Now obviously, we’re in historic economic times where many nonprofits are simply trying to stay afloat, much less grow unrestricted assets. But we also heard a number of people tell us that because of the recession, nonprofits are spending down unrestricted reserves because this is the proverbial rainy day everyone had been saving for. Done in a prudent and strategic way, this makes a lot of sense, but means that the nonprofit likely would not meet this standard. We received a lot of good suggestions on how to find a compromise on this one and will be considering them all.

To see further feedback on these issues, and many more, please check out the summaries of the town hall forums that are posted on our website. Also, please keep an eye out for the final revised Accountability Standards later this fall. In an effort to make sure nonprofits and donors have time to adjust to these new standards, they won’t be implemented until 2010, but we encourage everyone to keep letting us know what they think and asking us questions.

Again, thank you to everyone who weighed in during these past few months. We look forward to staying connected with you and working together on this important task of improving the climate for charitable giving.

Fundraising Section Overview

The following post was written by Kelly Rowan, Outreach & Resource Manager for the Charities Review Council.

Fundraising is an essential part of ensuring that nonprofits can continue to provide their critical services to improve our communities. While nonprofits strive to proactively seek funds, they must be conscientious in following ethical practices that will ensure the upkeep of trust for the organization, and respect for the sector as a whole among donors.

Throughout this public input phase of our Standards Revision Project, we’ve been holding focus groups, town hall style meetings, and inviting input and comments here in this blog forum. The suggestions we’ve heard regarding this Fundraising section of the new draft Standards have led us to consider combining and re-drafting this section of the originally proposed Standards as follows.

Fundraising Disclosures
Philosophy
The responsible actions of both donors and nonprofits promote and sustain a climate
of giving. Fundraising methods should therefore be ethical and honest and
encourage the donor to give voluntarily, based on their interest and knowledge
of the purpose, programs, and achievements of the nonprofit. All information
provided in connection with solicitations is accurate and not misleading.

Standard
Print, email, and electronic solicitations clearly describe the purpose or
programs for which the contributed funds will be used and identify the nonprofit
that will receive the contribution. The donor is provided with the address or
phone number of the nonprofit.

Soliciting Practices
Philosophy
Donors are entitled to know
who is soliciting their gift and what portion of their gift will be received by
the nonprofit.

Standard
Solicitors who are not employees or volunteers of the
nonprofit:

• Identify themselves in each solicitation as professional fundraisers,
  and;
• Upon request, provide the name and address of their employer or contracting
  party.

If the nonprofit is engaged in cause-related marketing or its name is used in
connection with an event, or the sale or marketing of goods or services, upon
request, the nonprofit or persons authorized by the nonprofit to utilize the
nonprofit’s name provides accurate information about the percentage of gross
revenue that is paid to the nonprofit.

Donor Financial Information Security
Philosophy
A nonprofit should protect all private financial information provided by donors.

Standard
The nonprofit provides a secure environment for collecting online and
offline donations, and maintains internal controls governing the safekeeping of
all confidential donor financial and personal information.

Donor Privacy
Philosophy
A nonprofit should protect the privacy of donors and disclose when information is
collected about them and how this information is used. Donor information should
not be shared outside of the nonprofit without donor consent. A nonprofit should
also offer a way for donors to have their name removed from solicitation or
other mailing lists.

Standard
A nonprofit does not share donor
information without consent and provides a privacy policy on its website or by
request that describes how donor information is collected and used and provides
for donors to "opt-out" to make their private information available. A nonprofit
has a board-approved discontinue contact policy guaranteeing that donors can be
removed from solicitation and other mailing lists.

Adhering to these basic expectations regarding fundraising lays an important foundation for establishing a meaningful, trusting relationship between donors and nonprofits. A report by Independent Sector shows the negative impact of distrust—as well as the potential for increased giving in a more trusting environment: donors who have high confidence in charities give approximately 50 percent more annually than do donors who express low confidence. In the Council’s own Public Trust survey, most Minnesotans (83 percent) said that their general trust in charities influences their charitable giving.

We hope you’ll weigh-in regarding these most recent changes to the draft Standards. Are there important fundraising expectations that are not covered here? Also, you can always view the entire list of new proposed Standards here.