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Why your nonprofit must make time for accountability

October 23, 2020

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“Accountability” may seem like one of those popular management concepts you know would be nice to implement if your not-for-profit had the time and budget. But not only is accountability essential to your nonprofit’s health and efficacy — affecting everything from donations to grants, hiring to volunteering, board fiduciary duty to employee morale — it’s also easy to adopt.

Start with laws and rules

Accountability starts by complying with all applicable laws and rules. Make sure new staffers and board members understand these as well as your nonprofit’s code of conduct. In fact, ask employees and board members to sign an ethical code — and hold them to it.

As your organization pursues its mission, it must do so fairly and in the best interests of its constituents and community. Your status as a nonprofit means you’re obligated to use your resources to support your mission and benefit the community you serve. Evaluate programs accordingly, both in respect to the activities and their outcomes.

Put governance front and center

There can be no accountability without good governance. This starts with your nonprofit’s executives and managers, who must be accountable for failures as well as successes. But ultimately, governance is your board’s responsibility. Your board needs to understand the importance of its fiduciary duty and focus on the big picture, not the process-oriented details best handled at the staff or committee level.

For example, management might prepare internal financial statements and review performance against approved budgets on a quarterly basis. But it will present these statements to the board (or its audit or finance committee) for review and approval. Your board is also responsible for establishing and regularly assessing financial performance measurements.

Make your efforts public

Communication is a big part of accountability. Your annual report, for example, is designed to summarize the year’s activities and detail your nonprofit’s financial position. But the report’s list of board members, management staff and other key employees can be just as important. Stakeholders want to be able to assign responsibility for results to actual names.

Your nonprofit’s Form 990 also provides the public with an overview of your organization’s programs, finances, governance, compliance and compensation methods. Notably, charity watchdog groups use 990 information to help them evaluate nonprofits on fiscal responsibility, charitable impact and other qualities.

Ongoing process

Implementing accountability isn’t a one-time act but an ongoing process. Consider accountability when evaluating staffers, volunteers and, especially, board members. Contact us for more ideas about running an ethical and effective organization.

© 2020

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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