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Preserving the soundness and integrity of the nonprofit community must strike
=Overview=
a careful balance between prudent legal mandates to ensure that organizations
[[File:Principles.gif|frame|right|Principles for Good Governance and Ethical Practice|300px]]
do not abuse the privilege of their exempt status, and well-informed selfgovernance
Preserving the soundness and integrity of the nonprofit community must strike a careful balance between prudent legal mandates to ensure that organizations do not abuse the privilege of their exempt status, and well-informed self- governance and mutual awareness among nonprofit organizations. The Panel on the Nonprofit Sector has been committed to formulating effective, broadly applicable methods of self-regulation since its inception in 2004. This work has proceeded from a belief—among lawmakers and their staffs no less than
and mutual awareness among nonprofit organizations. The Panel
on the Nonprofit Sector has been committed to formulating effective, broadly
applicable methods of self-regulation since its inception in 2004. This work has
proceeded from a belief—among lawmakers and their staffs no less than
among charitable organizations—that the best bulwark against misconduct will
among charitable organizations—that the best bulwark against misconduct will
always be a well-informed vigilance by members of the nonprofit community
always be a well-informed vigilance by members of the nonprofit community themselves, including a set principles they could adopt, promote
themselves, including a set principles they could adopt, promote
sector-wide, and improve over time. Widespread use of such principles
sector-wide, and improve over time. Widespread use of such principles
would enable organizations to improve their operations by learning from each other.
would enable organizations to improve their operations by learning from each other.
Nonprofit organizations have long embraced the need for standards of ethical practice that preserve and
 
strengthen the public’s confidence. Many such systems in fact already exist, though none have applied to
Nonprofit organizations have long embraced the need for standards of ethical practice that preserve and strengthen the public’s confidence. Many such systems in fact already exist, though none have applied to the entire range of American charitable organizations. The pages that follow therefore set forth a comprehensive set of principles to inform the field. In developing these principles, the Panel called together 34 leaders from charities, foundations, academia, and oversight agencies; commissioned two studies of self-regulation regimes already in use; and conducted a detailed review of principles and standards drawn from more than 50 such systems, including selections from both the nonprofit and for- profit sectors. Guidance and encouragement from two rounds of public comment further strengthened the Panel’s final set of principles.
the entire range of American charitable organizations. The pages that follow therefore set forth a
 
comprehensive set of principles to inform the field. In developing these principles, the Panel called
With this document, the Panel sets forth principles of sound practice that should be considered by every charitable organization as a guide for strengthening its effectiveness and accountability. The 33 principles are organized under four main categories:
together 34 leaders from charities, foundations, academia, and oversight agencies; commissioned two
 
studies of self-regulation regimes already in use; and conducted a detailed review of principles and
#Legal Compliance and Public Disclosure,
standards drawn from more than 50 such systems, including selections from both the nonprofit and forprofit
#Effective Governance,
sectors. Guidance and encouragement from two rounds of public comment further strengthened
#Strong Financial Oversight, and
the Panel’s final set of principles.
#Responsible Fundraising.
With this document, the Panel sets forth principles of sound practice that should be considered by every
 
charitable organization as a guide for strengthening its effectiveness and accountability. The 33 principles
The Panel strongly recommends that an organization’s board conduct a thorough discussion of the complete set of principles, and determine how the organization should apply each to its operations. It is possible that after this review, a board may conclude certain principles do not apply to its organization. Developing a transparent process for communicating how the organization has addressed the principles, including the reasons that any of the principles are not relevant, is likely to foster a greater appreciation of the diverse nature of the sector and deeper respect for the board’s good stewardship.
are organized under four main categories:
 
1. Legal Compliance and Public Disclosure,
=Legal Compliance and Public Disclosure=
2. Effective Governance,
 
3. Strong Financial Oversight, and
1. A charitable organization must comply with all applicable federal laws and regulations, as well as applicable laws and regulations of the states and the local jurisdictions in which it is based or operates. If the organization conducts programs outside the United States, it must also abide by applicable international laws, regulations and conventions that are legally binding on the United States.
4. Responsible Fundraising.
 
The Panel strongly recommends that an organization’s board conduct a thorough discussion of the
2. A charitable organization should have a formally adopted, written code of ethics with which all of its directors or trustees, staff and volunteers are familiar and to which they adhere.
complete set of principles, and determine how the organization should apply each to its operations. It is
 
possible that after this review, a board may conclude certain principles do not apply to its organization.
3. A charitable organization should adopt and implement policies and procedures to ensure that all conflicts of interest, or the appearance thereof, within the organization and the board are appropriately managed through disclosure, recusal, or other means.
Developing a transparent process for communicating how the organization has addressed the principles,
 
including the reasons that any of the principles are not relevant, is likely to foster a greater appreciation
4. A charitable organization should establish and implement policies and procedures that enable individuals to come forward with information on illegal practices or violations of organizational policies. This “whistleblower” policy should specify that the organization will not retaliate against, and will protect the confidentially of, individuals who make good-faith reports.
of the diverse nature of the sector and deeper respect for the board’s good stewardship.
 
2
5. A charitable organization should establish and implement policies and procedures to protect and preserve the organization’s important documents and business records.
Legal Compliance and Public Disclosure
 
1. A charitable organization must comply with all applicable federal laws and regulations, as well as
6. A charitable organization’s board should ensure that the organization has adequate plans to protect its assets—its property, financial and human resources, programmatic content and material, and its integrity and reputation—against damage or loss. The board should review regularly the organization’s need for general liability and directors’ and officers’ liability insurance, as well as take other actions necessary to mitigate risks.
applicable laws and regulations of the states and the local jurisdictions in which it is based or
 
operates. If the organization conducts programs outside the United States, it must also abide by
7. A charitable organization should make information about its operations, including its governance, finances, programs, and activities, widely available to the public. Charitable organizations also should consider making information available on the methods they use to evaluate the outcomes of their work and sharing the results of those evaluations.
applicable international laws, regulations and conventions that are legally binding on the United
 
States.
=Effective Governance=
2. A charitable organization should have a formally adopted, written code of ethics with which all of its
 
directors or trustees, staff and volunteers are familiar and to which they adhere.
8. A charitable organization must have a governing body that is responsible for reviewing and approving the organization’s mission and strategic direction, annual budget and key financial transactions, compensation practices and policies, and fiscal and governance policies.
3. A charitable organization should adopt and implement policies and procedures to ensure that all
 
conflicts of interest, or the appearance thereof, within the organization and the board are
9. The board of a charitable organization should meet regularly enough to conduct its business and fulfill its duties.
appropriately managed through disclosure, recusal, or other means.
 
4. A charitable organization should establish and implement policies and procedures that enable
10. The board of a charitable organization should establish its own size and structure and review these periodically. The board should have enough members to allow for full deliberation and diversity of thinking on governance and other organizational matters. Except for very small organizations, this generally means that the board should have at least five members.
individuals to come forward with information on illegal practices or violations of organizational
 
policies. This “whistleblower” policy should specify that the organization will not retaliate against,
11. The board of a charitable organization should include members with the diverse background (including, but not limited to, ethnic, racial, and gender perspectives), experience, and organizational and financial skills necessary to advance the organization’s mission.
and will protect the confidentially of, individuals who make good-faith reports.
 
5. A charitable organization should establish and implement policies and procedures to protect and
12. A substantial majority of the board of a public charity, usually meaning at least two-thirds of the 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.
preserve the organization’s important documents and business records.
 
6. A charitable organization’s board should ensure that the organization has adequate plans to protect
13. The board should hire, oversee, and annually evaluate the performance of the chief executive officer of the organization, and 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.
its assets—its property, financial and human resources, programmatic content and material, and its
 
integrity and reputation—against damage or loss. The board should review regularly the
14. 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.
organization’s need for general liability and directors’ and officers’ liability insurance, as well as take
 
other actions necessary to mitigate risks.
15. The board should establish an effective, systematic process for educating and communicating with board members to ensure that they are aware of their legal and ethical responsibilities, are knowledgeable about the programs and activities of the organization, and can carry out their oversight functions effectively.
7. A charitable organization should make information about its operations, including its governance,
 
finances, programs, and activities, widely available to the public. Charitable organizations also should
16. Board members should evaluate their performance as a group and as individuals no less frequently than every three years, and should have clear procedures for removing board members who are unable to fulfill their responsibilities.
consider making information available on the methods they use to evaluate the outcomes of their
 
work and sharing the results of those evaluations.
17. The board should establish clear policies and procedures setting the length of terms and the number of consecutive terms a board member may serve.
Effective Governance
 
8. A charitable organization must have a governing body that is responsible for reviewing and
18. The board should review organizational and governing instruments no less frequently than every five years.
approving the organization’s mission and strategic direction, annual budget and key financial
 
transactions, compensation practices and policies, and fiscal and governance policies.
19. The board should establish and review regularly the organization’s mission and goals and should evaluate, no less frequently than every five years, the organization’s programs, goals and activities to be sure they advance its mission and make prudent use of its resources.
9. The board of a charitable organization should meet regularly enough to conduct its business and
 
fulfill its duties.
20. Board members are generally expected to serve without compensation, other than reimbursement for expenses incurred to fulfill their board duties. A charitable organization that provides compensation to its board members should use appropriate comparability data to determine the amount to be paid, document the decision and provide full disclosure to anyone, upon request, of the amount and rationale for the compensation.
10. The board of a charitable organization should establish its own size and structure and review these
 
periodically. The board should have enough members to allow for full deliberation and diversity of
=Strong Financial Oversight=
thinking on governance and other organizational matters. Except for very small organizations, this
 
generally means that the board should have at least five members.
21. A charitable organization must keep complete, current, and accurate financial records. Its board should receive and review timely reports of the organization’s financial activities and should have a qualified, independent financial expert audit or review these statements annually in a manner appropriate to the organization’s size and scale of operations.
11. The board of a charitable organization should include members with the diverse background
(including, but not limited to, ethnic, racial, and gender perspectives), experience, and organizational
22. The board of a charitable organization must institute policies and procedures to ensure that the organization (and, if applicable, its subsidiaries) manages and invests its funds responsibly, in accordance with all legal requirements. The full board should review and approve the organization’s annual budget and should monitor actual performance against the budget.
and financial skills necessary to advance the organization’s mission.
 
3
23. A charitable organization should not provide loans (or the equivalent, such as loan guarantees, purchasing or transferring ownership of a residence or office, or relieving a debt or lease obligation) to directors, officers, or trustees.
12. A substantial majority of the board of a public charity, usually meaning at least two-thirds of the
 
members, should be independent. Independent members should not: (1) be compensated by the
24. A charitable organization should spend a significant percentage of its annual budget on programs that pursue its mission. The budget should also provide sufficient resources for effective administration of the organization, and, if it solicits contributions, for appropriate fundraising activities.
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
25. 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 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 in a cost-effective manner.
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
26. A charitable organization should neither pay for nor reimburse travel expenditures for spouses, dependents or others who are accompanying someone conducting business for the organization unless they, too, are conducting such business.
reside with any person so described.
 
13. The board should hire, oversee, and annually evaluate the performance of the chief executive officer
=Responsible Fundraising=
of the organization, and 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
27. Solicitation materials and other communications addressed to donors and the public must clearly identify the organization and be accurate and truthful.
adjustments for inflation or cost of living.
 
14. The board of a charitable organization that has paid staff should ensure that the positions of chief
28. Contributions must be used the purposes consistent with the donor’s intent, whether as described in the relevant solicitation materials or as specifically directed by the donor.
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
29. A charitable organization must provide donors with specific acknowledgements of charitable contributions, in accordance with IRS requirements, as well as information to facilitate the donors’ compliance with tax law requirements.
individuals.
 
15. The board should establish an effective, systematic process for educating and communicating with
30. A charitable organization should adopt clear policies, based on its specific exempt purpose, to determine whether accepting a gift would compromise its ethics, financial circumstances, program focus or other interests.
board members to ensure that they are aware of their legal and ethical responsibilities, are
 
knowledgeable about the programs and activities of the organization, and can carry out their
31. A charitable organization should provide appropriate training and supervision of the people soliciting funds on its behalf to ensure that they understand their responsibilities and applicable federal, state and local laws, and do not employ techniques that are coercive, intimidating, or intended to harass potential donors.
oversight functions effectively.
 
16. Board members should evaluate their performance as a group and as individuals no less frequently
32. A charitable organization should not compensate internal or external fundraisers based on a commission or a percentage of the amount raised.
than every three years, and should have clear procedures for removing board members who are
 
unable to fulfill their responsibilities.
33. A charitable organization should respect the privacy of individual donors and, except where disclosure is required by law, should not sell or otherwise make available the names and contact information of its donors without providing them an opportunity at least once a year to opt out of the use of their names.
17. The board should establish clear policies and procedures setting the length of terms and the number
 
of consecutive terms a board member may serve.
=References=
18. The board should review organizational and governing instruments no less frequently than every five
*[http://www.nonprofitpanel.org/Report/principles/Principles_Executive_Summary.pdf Principles for Good Governance and Ethical Practice] - Executive Summary - Panel on the Nonprofit Sector
years.
*[https://www.independentsector.org/uploads/Accountability_Documents/Principles_for_Good_Governance_and_Ethical_Practice.pdf Principles for Good Governance and Ethical Practice] - Full Text - Panel on the Nonprofit Sector
19. The board should establish and review regularly the organization’s mission and goals and should
*[[Media:Principles_Workbook.pdf|The Principles Workbook: Steering Your Board Toward Good Governance]] - explanation of principles and techniques for implementing them
evaluate, no less frequently than every five years, the organization’s programs, goals and activities to
*[https://www.independentsector.org/governance_ethics_resource_center The Independent Center] - Resource for non-profit development
be sure they advance its mission and make prudent use of its resources.
20. Board members are generally expected to serve without compensation, other than reimbursement for
expenses incurred to fulfill their board duties. A charitable organization that provides compensation
to its board members should use appropriate comparability data to determine the amount to be paid,
document the decision and provide full disclosure to anyone, upon request, of the amount and
rationale for the compensation.
Strong Financial Oversight
21. A charitable organization must keep complete, current, and accurate financial records. Its board
should receive and review timely reports of the organization’s financial activities and should have a
qualified, independent financial expert audit or review these statements annually in a manner
appropriate to the organization’s size and scale of operations.
4
22. The board of a charitable organization must institute policies and procedures to ensure that the
organization (and, if applicable, its subsidiaries) manages and invests its funds responsibly, in
accordance with all legal requirements. The full board should review and approve the organization’s
annual budget and should monitor actual performance against the budget.
23. A charitable organization should not provide loans (or the equivalent, such as loan guarantees,
purchasing or transferring ownership of a residence or office, or relieving a debt or lease obligation)
to directors, officers, or trustees.
24. A charitable organization should spend a significant percentage of its annual budget on programs
that pursue its mission. The budget should also provide sufficient resources for effective
administration of the organization, and, if it solicits contributions, for appropriate fundraising
activities.
25. 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 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 in a cost-effective manner.
26. A charitable organization should neither pay for nor reimburse travel expenditures for spouses,
dependents or others who are accompanying someone conducting business for the organization
unless they, too, are conducting such business.
Responsible Fundraising
27. Solicitation materials and other communications addressed to donors and the public must clearly
identify the organization and be accurate and truthful.
28. Contributions must be used the purposes consistent with the donor’s intent, whether as described in
the relevant solicitation materials or as specifically directed by the donor.
29. A charitable organization must provide donors with specific acknowledgements of charitable
contributions, in accordance with IRS requirements, as well as information to facilitate the donors’
compliance with tax law requirements.
30. A charitable organization should adopt clear policies, based on its specific exempt purpose, to
determine whether accepting a gift would compromise its ethics, financial circumstances, program
focus or other interests.
31. A charitable organization should provide appropriate training and supervision of the people soliciting
funds on its behalf to ensure that they understand their responsibilities and applicable federal, state
and local laws, and do not employ techniques that are coercive, intimidating, or intended to harass
potential donors.
32. A charitable organization should not compensate internal or external fundraisers based on a
commission or a percentage of the amount raised.
33. A charitable organization should respect the privacy of individual donors and, except where
disclosure is required by law, should not sell or otherwise make available the names and contact
information of its donors without providing them an opportunity at least once a year to opt out of
the use of their names.

Latest revision as of 20:06, 30 August 2012

Overview

Principles for Good Governance and Ethical Practice

Preserving the soundness and integrity of the nonprofit community must strike a careful balance between prudent legal mandates to ensure that organizations do not abuse the privilege of their exempt status, and well-informed self- governance and mutual awareness among nonprofit organizations. The Panel on the Nonprofit Sector has been committed to formulating effective, broadly applicable methods of self-regulation since its inception in 2004. This work has proceeded from a belief—among lawmakers and their staffs no less than among charitable organizations—that the best bulwark against misconduct will always be a well-informed vigilance by members of the nonprofit community themselves, including a set principles they could adopt, promote sector-wide, and improve over time. Widespread use of such principles would enable organizations to improve their operations by learning from each other.

Nonprofit organizations have long embraced the need for standards of ethical practice that preserve and strengthen the public’s confidence. Many such systems in fact already exist, though none have applied to the entire range of American charitable organizations. The pages that follow therefore set forth a comprehensive set of principles to inform the field. In developing these principles, the Panel called together 34 leaders from charities, foundations, academia, and oversight agencies; commissioned two studies of self-regulation regimes already in use; and conducted a detailed review of principles and standards drawn from more than 50 such systems, including selections from both the nonprofit and for- profit sectors. Guidance and encouragement from two rounds of public comment further strengthened the Panel’s final set of principles.

With this document, the Panel sets forth principles of sound practice that should be considered by every charitable organization as a guide for strengthening its effectiveness and accountability. The 33 principles are organized under four main categories:

  1. Legal Compliance and Public Disclosure,
  2. Effective Governance,
  3. Strong Financial Oversight, and
  4. Responsible Fundraising.

The Panel strongly recommends that an organization’s board conduct a thorough discussion of the complete set of principles, and determine how the organization should apply each to its operations. It is possible that after this review, a board may conclude certain principles do not apply to its organization. Developing a transparent process for communicating how the organization has addressed the principles, including the reasons that any of the principles are not relevant, is likely to foster a greater appreciation of the diverse nature of the sector and deeper respect for the board’s good stewardship.

Legal Compliance and Public Disclosure

1. A charitable organization must comply with all applicable federal laws and regulations, as well as applicable laws and regulations of the states and the local jurisdictions in which it is based or operates. If the organization conducts programs outside the United States, it must also abide by applicable international laws, regulations and conventions that are legally binding on the United States.

2. A charitable organization should have a formally adopted, written code of ethics with which all of its directors or trustees, staff and volunteers are familiar and to which they adhere.

3. A charitable organization should adopt and implement policies and procedures to ensure that all conflicts of interest, or the appearance thereof, within the organization and the board are appropriately managed through disclosure, recusal, or other means.

4. A charitable organization should establish and implement policies and procedures that enable individuals to come forward with information on illegal practices or violations of organizational policies. This “whistleblower” policy should specify that the organization will not retaliate against, and will protect the confidentially of, individuals who make good-faith reports.

5. A charitable organization should establish and implement policies and procedures to protect and preserve the organization’s important documents and business records.

6. A charitable organization’s board should ensure that the organization has adequate plans to protect its assets—its property, financial and human resources, programmatic content and material, and its integrity and reputation—against damage or loss. The board should review regularly the organization’s need for general liability and directors’ and officers’ liability insurance, as well as take other actions necessary to mitigate risks.

7. A charitable organization should make information about its operations, including its governance, finances, programs, and activities, widely available to the public. Charitable organizations also should consider making information available on the methods they use to evaluate the outcomes of their work and sharing the results of those evaluations.

Effective Governance

8. A charitable organization must have a governing body that is responsible for reviewing and approving the organization’s mission and strategic direction, annual budget and key financial transactions, compensation practices and policies, and fiscal and governance policies.

9. The board of a charitable organization should meet regularly enough to conduct its business and fulfill its duties.

10. The board of a charitable organization should establish its own size and structure and review these periodically. The board should have enough members to allow for full deliberation and diversity of thinking on governance and other organizational matters. Except for very small organizations, this generally means that the board should have at least five members.

11. The board of a charitable organization should include members with the diverse background (including, but not limited to, ethnic, racial, and gender perspectives), experience, and organizational and financial skills necessary to advance the organization’s mission.

12. A substantial majority of the board of a public charity, usually meaning at least two-thirds of the 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.

13. The board should hire, oversee, and annually evaluate the performance of the chief executive officer of the organization, and 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.

14. 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.

15. The board should establish an effective, systematic process for educating and communicating with board members to ensure that they are aware of their legal and ethical responsibilities, are knowledgeable about the programs and activities of the organization, and can carry out their oversight functions effectively.

16. Board members should evaluate their performance as a group and as individuals no less frequently than every three years, and should have clear procedures for removing board members who are unable to fulfill their responsibilities.

17. The board should establish clear policies and procedures setting the length of terms and the number of consecutive terms a board member may serve.

18. The board should review organizational and governing instruments no less frequently than every five years.

19. The board should establish and review regularly the organization’s mission and goals and should evaluate, no less frequently than every five years, the organization’s programs, goals and activities to be sure they advance its mission and make prudent use of its resources.

20. Board members are generally expected to serve without compensation, other than reimbursement for expenses incurred to fulfill their board duties. A charitable organization that provides compensation to its board members should use appropriate comparability data to determine the amount to be paid, document the decision and provide full disclosure to anyone, upon request, of the amount and rationale for the compensation.

Strong Financial Oversight

21. A charitable organization must keep complete, current, and accurate financial records. Its board should receive and review timely reports of the organization’s financial activities and should have a qualified, independent financial expert audit or review these statements annually in a manner appropriate to the organization’s size and scale of operations.

22. The board of a charitable organization must institute policies and procedures to ensure that the organization (and, if applicable, its subsidiaries) manages and invests its funds responsibly, in accordance with all legal requirements. The full board should review and approve the organization’s annual budget and should monitor actual performance against the budget.

23. A charitable organization should not provide loans (or the equivalent, such as loan guarantees, purchasing or transferring ownership of a residence or office, or relieving a debt or lease obligation) to directors, officers, or trustees.

24. A charitable organization should spend a significant percentage of its annual budget on programs that pursue its mission. The budget should also provide sufficient resources for effective administration of the organization, and, if it solicits contributions, for appropriate fundraising activities.

25. 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 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 in a cost-effective manner.

26. A charitable organization should neither pay for nor reimburse travel expenditures for spouses, dependents or others who are accompanying someone conducting business for the organization unless they, too, are conducting such business.

Responsible Fundraising

27. Solicitation materials and other communications addressed to donors and the public must clearly identify the organization and be accurate and truthful.

28. Contributions must be used the purposes consistent with the donor’s intent, whether as described in the relevant solicitation materials or as specifically directed by the donor.

29. A charitable organization must provide donors with specific acknowledgements of charitable contributions, in accordance with IRS requirements, as well as information to facilitate the donors’ compliance with tax law requirements.

30. A charitable organization should adopt clear policies, based on its specific exempt purpose, to determine whether accepting a gift would compromise its ethics, financial circumstances, program focus or other interests.

31. A charitable organization should provide appropriate training and supervision of the people soliciting funds on its behalf to ensure that they understand their responsibilities and applicable federal, state and local laws, and do not employ techniques that are coercive, intimidating, or intended to harass potential donors.

32. A charitable organization should not compensate internal or external fundraisers based on a commission or a percentage of the amount raised.

33. A charitable organization should respect the privacy of individual donors and, except where disclosure is required by law, should not sell or otherwise make available the names and contact information of its donors without providing them an opportunity at least once a year to opt out of the use of their names.

References

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