The Changing Responsibilities of Nonprofit Boards

by Jennifer Knapp, do good Consulting Special Projects Coordinator

As nonprofits continue to grow in number and in power, governing them is becoming increasingly important. Stories of fraud and scandal in the corporate and nonprofit worlds are also causing many to pay more attention to accountability and oversight.

In light of these factors, the Urban Institute, a research organization studying social policy, surveyed over 5,000 nonprofits nationwide. Its newly released report, “Nonprofit Governance in the United States,” has important implications for those leading nonprofits and serving on nonprofit boards. The report offers two main sets of findings. One relates to increased accountability; the other board engagement.

Accountability in Nonprofit Governance
In 2002, Congress passed legislation called the Sarbanes-Oxley Act. This act was intended to strengthen governance and deter fraud in the corporate sector. While focused on corporations, this legislation impacts nonprofit governance as well. The Act contains six requirements: an external audit, an independent audit committee, rotating audit firms every five years, a written conflict of interest policy, a whistleblower policy (a process for employees to report complaints without retaliation), and a document retention and destruction policy.

While these activities are not required of nonprofits, the report shows that many organizations are choosing to implement them. In the quest for enhanced accountability, several factors influence the likelihood that nonprofits will adopt these policies. Three factors most consistently pushing nonprofits towards these practices are: 1) having board members who also sit on corporate boards, 2) a larger minority presence on the board, and 3) government funding. On the other hand, having an Executive Director who is a voting member of the board makes it less likely a nonprofit will adopt these policies.

Again, the report emphasizes that these practices are not required of nonprofits. However, leaders and board members should consider these trends as a hint of what will be considered best practice in the coming years.

Board Engagement
The other important finding in the report relates to board involvement. A whopping 70% of respondents claim difficulties recruiting board members. The report suggests such difficulty is related to poor engagement by board members. In other words, less active nonprofit boards have a harder time gaining new members.

To help turn things around, the report details several factors that contribute to board engagement, including:

• Organizational members electing at least one board member
• More females on the board
• Board members with financial and/or business skills
• Board members who know the mission area
• Board members with previous volunteer experience for the organization
• Board members who say they are willing to give of their time
• A positive community reputation
• Government funding

This list is not exhaustive, but it these items had the strongest correlation with board engagement. And, the findings suggest that more engagement from the current board can lead to easier recruiting in the future.

As nonprofits continue to grow and develop, accountability and engagement issues will gain importance. Prudent nonprofit leaders and board members should ensure that their organizations take steps to stay accountable and be involved. Success depends upon it.

To read the entire report, click here. do good Consulting has developed a sample Board Recruitment Grid to help you get more strategic when it comes time to fill vacancies on your board of directors. If you would like additional help strengthening your board and devising solid strategies for recruiting top-quality board members, contact do good Consulting.

Form 990 Gets a Face Lift

by Loni R. Trimble and Hope Wheeler, CPA, Clifton Gunderson

After 28 years, the Internal Revenue Service has decided to give the Form 990 a face lift. The redesign of the form is based on three guiding principles:

• Enhancing transparency to provide the IRS and the public with a realistic picture of the organization, along with the basis for comparison to other organizations.
• Promoting compliance by accurately reflecting the organization’s operations so the IRS may efficiently assess the risk of noncompliance.
• Minimizing the burden on filing organizations.

Some of the new areas of interest include:

• A summary page providing the organization’s identifying information and a snapshot of the organization’s key financial, compensation, governance, and operation information.
• A portion of the form requiring governance information including the composition of the board, and certain other governance and financial statement practices.

217-351-7400

Group Spotlight: Golden Apple Central Illinois

The advertising slicks are hawking page after page of school supplies and kids are counting the days left on summer break. School bells will ring again soon. Amid the relative calm, the office at 505 East Green Street in the heart of Campustown in Champaign, is abuzz. Staff and volunteers are preparing for an exciting new development: Golden Apple Central Illinois.

While Golden Apple is not a new organization (it has been active in the Chicagoland region for 22 years), the advent of a Central Illinois chapter is. Like its parent organization, this proverbial “new kid on the block” strives to transform the way our children learn and how teachers themselves are taught. Through awards programs, remarkable professional development opportunities, and on-going support Golden Apple is making a difference in education in Illinois.

Since its inception in 1985, Golden Apple presents the Golden Apple Award for Teaching Excellence annually to 10 outstanding teachers. In a broadly-televised Awards Gala, classroom teachers and attendees don evening gowns and black ties to applaud these award-winning teachers as they take turns in the spotlight. The ceremony is sheer inspiration.

But then comes the real work. Golden Apple is about far more than black tie galas and shiny apple awards. It is about getting to the core of how our students are taught and finding exciting, innovative ways to create change. In the year following the award, recognized teachers begin a journey into professional development, shared learning, and broadened horizons. They develop new opportunities for learning, innovative approaches to overcoming challenges, and develop synergies to address new educational areas.

A sabbatical plus a two-semester scholarship at the University of Illinois at Urbana-Champaign provides these amazing teachers with opportunities to share their award-winning strategies with others so they may learn how to spread them to other educators and schools.

Recognized teachers are also inducted into the prestigious Golden Apple Academy, a veritable “think tank” for teachers. This is the incubator for innovative educational programs that has been revolutionizing the delivery of education to teachers and students alike. Programs such as Golden Apple Scholars, Science Workshops, Storytelling Workshops, and the Alphabet Bus (which literally brings the classroom to the children) are just a small sampling of what Golden Apple has accomplished in the Chicago area.

Recognizing that excellent teachers are not confined to northern Illinois, Golden Apple is literally and figuratively “branching out.” From its hub on Green Street, Golden Apple Central Illinois will officially open its doors September 1 and reach out to communities, students, parents, and teachers across 18 counties in Central Illinois.

The goal of Golden Apple Central Illinois is to not only to replicate the highly successful Chicago program, but to create a program in our region that nurtures and supports outstanding teachers. It will provide a framework for them to share their award-winning methods with other educators, develop new ideas, and address on-going educational issues. The program will enhance educational efforts across the region and impact not only the teachers, but children in classrooms across 18 counties.

So as Golden Apple Central Illinois sets up shop on Green Street, and you toss another standard-rule notebook into the shopping cart, take a minute to think about the teachers that make a difference your child’s life. Then nominate those excellent teachers through Golden Apple Central Illinois.

For more information on Golden Apple Central Illinois, to nominate your favorite teacher, or to volunteer to help, contact GACI Director, Debbi Erikson at (217) 369-8824 or erikson@goldenapple.org or see www.goldenappleci.org.