Exempt Organizations Advisory - Independent Sector Publishes "Checklist for Accountability"

The Panel on the Nonprofit Sector, author of a comprehensive series of recommendations intended to strengthen the accountability, transparency and governance of the nation’s charities and foundations, held a series of fifteen field hearings across the country. As a result of the Panel’s findings, Independent Sector, which convened the Panel in October 2004 at the encouragement of the U.S. Senate Finance Committee, recently published a "Checklist for Accountability."

Independent Sector intends for readers to use the checklist to evaluate and strengthen their nonprofit organizations’ governance and transparency. It includes the following nine steps:

1. Develop a Culture of Accountability and Transparency
2. Adopt a Statement of Values and Code of Ethics
3. Adopt a Conflict of Interest Policy
4. Ensure that the Board of Directors Understands and Can Fulfill Its Financial Responsibilities
5. Conduct Independent Financial Reviews, Particularly Audits
6. Ensure the Accuracy of and Make Public Your Organization’s Form 990
7. Be Transparent
8. Establish and Support a Policy on Reporting Suspected Misconduct or Malfeasance ("Whistleblower Protection Policy")
9. Remain Current with the Law

Readers can find the complete checklist and also test their own organization’s accountability at Independent Sector’s website. Independent Sector encourages organizations to review the recommendations and adapt them for their own needs. In an Independent Sector news release, Diana Aviv, president and CEO of Independent Sector, said "Nonprofit boards and staff want to be sure their organizations meet the highest standards of ethics, transparency, and governance. This is an impartial tool to help organizations meet that goal."

For more information on this topic, please contact Catherine W. Wilkinson or Suzanne Ross McDowell.

The Exempt Organization Advisory is a general summary of the law and is not intended as specific legal advice for any organization.

Internal Revenue Service - Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

For more information on this topic, please contact the authors or the attorneys with whom you usually work at Steptoe.

Questions and comments about the Exempt Organizations Advisory are always welcome and should be sent to bstone@steptoe.com.