Trends in Nonprofit Transparency:  From Accountability as Regulatory Compliance to Accountability for Impact September 30,...
<ul><li>Greater demand for transparency & accountability </li></ul><ul><li>Greater personal engagement in philanthropy </l...
The release of information that is relevant to evaluation… Posting information on the Internet is  the necessary step  for...
Accountability <ul><li>A nonprofit’s ability to be dependable to meet its stated obligations, be they financial, actionabl...
Nonprofit Leader Donors Sharing Information Builds Trust Transparency Builds Trust
Laying A Foundation Constitutional Rights Fiduciary Duties Loyalty Care Speech Religion Assembly Petition the Government O...
Tax Benefits = Benefits to Society?
New Rules for Nonprofits <ul><li>Every NPO </li></ul><ul><li>Every year </li></ul><ul><li>File annual report </li></ul><ul...
Impacts of IRS Revocation <ul><li>355,000 NPOs facing possible revocation </li></ul><ul><li>292,000 are small NPOs with an...
New Form 990 Disclosures <ul><li>Governance matters… </li></ul><ul><li>Board independence </li></ul><ul><li>Fraud? </li></...
New Form 990 Disclosures <ul><li>Policies NOT required by Internal Revenue Code </li></ul><ul><li>How you review Form 990?...
New Form 990 Disclosures <ul><li>How transparent are you about: </li></ul><ul><li>Form 990 </li></ul><ul><li>Form 990-T </...
New Form 990 Disclosures <ul><li>Compensation is one of the biggest areas of concern… </li></ul>“ The nail that sticks out...
New Form 990 – Costs of Compliance <ul><li>Reports of  </li></ul><ul><li>50% to 200% increase in the costs to prepare the ...
Timeliness of Filings <ul><li>Due 4 months and 15 days following the close its fiscal year. </li></ul><ul><li>Can file 10 ...
Check List: Written Policies <ul><li>Conflict of Interest </li></ul><ul><li>Whistleblower Policy </li></ul><ul><li>Documen...
Check List: Practices in Place <ul><li>Written board meeting minutes </li></ul><ul><li>Written board committee meeting min...
What’s next?
Tax Exemption and Elections
Who is looking at your Form 990? <ul><li>IRS </li></ul><ul><li>State regulators </li></ul><ul><li>Watch dog groups </li></...
From Compliance to Impact Inputs Activities Outputs Outcomes
Measuring Impact What is your organization trying to accomplish? What are your strategies for getting there? What are your...
The Age of Transparency Search engine optimization (SEO) means sharing information  so that your website can be found
The Age of Transparency Facebook is another place to share information and  engage people who support your cause.
The Age of Transparency People connect with causes that create  impact
The Age of Transparency Engage users to “flip the funnel” to talk about your cause
The Age of Transparency Not perfect. Not going away. Because donors want help.
The Age of Transparency Demonstrating a commitment to transparency.
Public Report for Memorial Sloan-Kettering Cancer Center
Sources of GuideStar Data
Uses of GuideStar Data
The Age of Transparency Swimming up stream or going with the flow?
Thank You! Dan Moore Vice President, Nonprofit Programs GuideStar USA, Inc. [email_address]
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Trends in Nonprofit Transparency: From Accountability as Regulatory Compliance to Accountability for Impact, presentation by Dan Moore, GuideStar's Vice President of Nonprofit Programs

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The new IRS Form 990 mandates greater disclosures about how your organization is governed, managed and where you spend your money. Learn more about how stakeholders like – program officers at foundations, the media, watchdog groups, your competitors, job seekers, potential board members and regulators – are using data to evaluate your organization. Stakeholders are demanding increased transparency from nonprofits. This trend is moving from a focus on accountability as a form of regulatory compliance to one increasing on accountability for results, measured in program impact. GuideStar is the leading source of nonprofit information in the US. Through its GuideStar Exchange program, GuideStar encourages nonprofit transparency through a program of self-reporting and delivers nonprofit data to a growing audience of foundations, donor advised funds and online giving platforms.

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  • Excessive compensation perks Lack of financial transparency and accountability to donors Charitable boards that are not engaged in their fiduciary responsibilities Nonprofit groups that act more like for-profit businesses than charities Inappropriate political activity Nonprofit hospitals that do not provide adequate charity care and community benefits Tax-exempt organizations fronting as tax-shelters Donor-advised funds with little or no money actually going to public charities
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  • Trends in Nonprofit Transparency: From Accountability as Regulatory Compliance to Accountability for Impact, presentation by Dan Moore, GuideStar's Vice President of Nonprofit Programs

    1. 1. Trends in Nonprofit Transparency: From Accountability as Regulatory Compliance to Accountability for Impact September 30, 2010
    2. 2. <ul><li>Greater demand for transparency & accountability </li></ul><ul><li>Greater personal engagement in philanthropy </li></ul><ul><li>Greater demand for data on which to base decisions </li></ul>The Era of Assumed Virtue is Over
    3. 3. The release of information that is relevant to evaluation… Posting information on the Internet is the necessary step for making that information public. Transparency = Openness
    4. 4. Accountability <ul><li>A nonprofit’s ability to be dependable to meet its stated obligations, be they financial, actionable, or moral. </li></ul>
    5. 5. Nonprofit Leader Donors Sharing Information Builds Trust Transparency Builds Trust
    6. 6. Laying A Foundation Constitutional Rights Fiduciary Duties Loyalty Care Speech Religion Assembly Petition the Government Obedience Tax Privileges 501(c)(3) Property Sales
    7. 7. Tax Benefits = Benefits to Society?
    8. 8. New Rules for Nonprofits <ul><li>Every NPO </li></ul><ul><li>Every year </li></ul><ul><li>File annual report </li></ul><ul><li>Failure to file 3 years in a row & your tax exemption is revoked -- automatically </li></ul><ul><li>Revocations following 2010 filing year </li></ul>
    9. 9. Impacts of IRS Revocation <ul><li>355,000 NPOs facing possible revocation </li></ul><ul><li>292,000 are small NPOs with annual revenues < $25,000 </li></ul><ul><li>63,000 are larger NPOs that file 990-EZs, 990s and 990-PFs </li></ul>
    10. 10. New Form 990 Disclosures <ul><li>Governance matters… </li></ul><ul><li>Board independence </li></ul><ul><li>Fraud? </li></ul><ul><li>Contemporaneous documentation of meetings & committees </li></ul>
    11. 11. New Form 990 Disclosures <ul><li>Policies NOT required by Internal Revenue Code </li></ul><ul><li>How you review Form 990? </li></ul><ul><li>Process for setting executive compensation include: review & approval, use data, document the decision? </li></ul>
    12. 12. New Form 990 Disclosures <ul><li>How transparent are you about: </li></ul><ul><li>Form 990 </li></ul><ul><li>Form 990-T </li></ul><ul><li>Form 1023 </li></ul><ul><li>Governing documents </li></ul><ul><li>Conflict of interest policy </li></ul><ul><li>Financial statements: </li></ul><ul><li>own website </li></ul><ul><li>another’s website </li></ul><ul><li>upon request </li></ul>
    13. 13. New Form 990 Disclosures <ul><li>Compensation is one of the biggest areas of concern… </li></ul>“ The nail that sticks out is the one that gets hammered.” Japanese proverb
    14. 14. New Form 990 – Costs of Compliance <ul><li>Reports of </li></ul><ul><li>50% to 200% increase in the costs to prepare the new Form 990 </li></ul>
    15. 15. Timeliness of Filings <ul><li>Due 4 months and 15 days following the close its fiscal year. </li></ul><ul><li>Can file 10 months and 15 days following the end of its fiscal year </li></ul><ul><li>Timely access to data is frustrated </li></ul>
    16. 16. Check List: Written Policies <ul><li>Conflict of Interest </li></ul><ul><li>Whistleblower Policy </li></ul><ul><li>Document retention and destruction Policy </li></ul><ul><li>Accounting policies and procedures manual </li></ul><ul><li>Gift Acceptance Policy </li></ul><ul><li>Written compensation policy, including expense reimbursement </li></ul>
    17. 17. Check List: Practices in Place <ul><li>Written board meeting minutes </li></ul><ul><li>Written board committee meeting minutes </li></ul><ul><li>Board review of the Form 990 </li></ul><ul><li>Compensation practices </li></ul><ul><li>Audit committee </li></ul><ul><li>Making public disclosures of key documents </li></ul>
    18. 18. What’s next?
    19. 19. Tax Exemption and Elections
    20. 20. Who is looking at your Form 990? <ul><li>IRS </li></ul><ul><li>State regulators </li></ul><ul><li>Watch dog groups </li></ul><ul><li>Media </li></ul><ul><li>Other nonprofits </li></ul><ul><li>Your staff </li></ul><ul><li>Job seekers </li></ul><ul><li>Prospective Board members </li></ul>
    21. 21. From Compliance to Impact Inputs Activities Outputs Outcomes
    22. 22. Measuring Impact What is your organization trying to accomplish? What are your strategies for getting there? What are your organization’s capabilities for doing this? How will you know if you are making progress? What have and haven’t you accomplished?
    23. 23. The Age of Transparency Search engine optimization (SEO) means sharing information so that your website can be found
    24. 24. The Age of Transparency Facebook is another place to share information and engage people who support your cause.
    25. 25. The Age of Transparency People connect with causes that create impact
    26. 26. The Age of Transparency Engage users to “flip the funnel” to talk about your cause
    27. 27. The Age of Transparency Not perfect. Not going away. Because donors want help.
    28. 28. The Age of Transparency Demonstrating a commitment to transparency.
    29. 29. Public Report for Memorial Sloan-Kettering Cancer Center
    30. 30. Sources of GuideStar Data
    31. 31. Uses of GuideStar Data
    32. 32. The Age of Transparency Swimming up stream or going with the flow?
    33. 33. Thank You! Dan Moore Vice President, Nonprofit Programs GuideStar USA, Inc. [email_address]
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