New Standards of Excellence for Nonprofits

The Standards of Excellence Institute released its enhanced code of ethics and accountability for the nonprofit sector.  See press release

The Maryland Association of Nonprofits, the organization that created the national Institute, hosted a forum on version 2 of their code for seal holders, peer reviewers and licensed consultants.  During the forum, they introduced the process followed, key changes and major additions.  I attended as a peer reviewer and walked away with excitement for the new and enhanced process and standards.

I have served as a peer reviewer for the Maryland Association of Nonprofit Organization’s (MANO) since June 2009 and have participated in dozens of application reviews.  Of course, my focus tends to be on the financial compliance but with each review I gain more appreciation of the other areas of an organization and their complex interplay with the financial side.

Version 2 of the Standards of Excellence is a result of over 300 hours of collaboration among expert volunteers.  Version 1 had a strong emphasis on the role of the Board within the organization.  Version 2 has a paradigm shift to focus on governance and leadership including staff and volunteers in a constructive partnership with the Board.  The new version of the standards for excellence is a framework of six guiding principles with clear benchmarks used to measure a nonprofit’s ethic and accountability performance.  After 12-monhts of overhaul these standards embody the notion of “excellence”.  The old standards were consolidated into the following six guiding principles:

  • Mission, Strategy, and Evaluation
  • Leadership: Board, Staff, and Volunteers
  • Legal Compliance and Ethics
  • Finance and Operations
  • Resource Development
  • Public Awareness, Engagement, and Advocacy

The guiding principles have 27 topic areas of specific performance benchmarks that characterize effective, ethical, and accountable organizations.  Among the new topic areas are:

  • The board’s fiduciary role,
  • Strategic planning and tracking by the board,
  • Succession planning for the board and chief executive,
  • Sustainability and cultural competency.

Another key change in this version is the tiered approach to accreditation by offering two levels of recognition before the full accreditation level.  Standards basic recognizes that the organization has met the benchmarks around legal and regulatory compliance.  Standards basic enhanced deepens into governance and management practices.  This option allows organization to work with and receive support from the Institute in order to meet all the benchmarks of full accreditation.

It is a fascinating process to study an organization’s operation and governance through the documentation they submit to support their compliance with the code.  During the forum I had the opportunity to talk to representatives of organizations that have been certified under the old standards and they confirmed that compiling the information required for submission is a lengthy and cumbersome process.  Nevertheless, I was assured that it was rewarding and that the “seal” has enhanced their operational effectiveness and fundraising results. In my role as a peer reviewer, I get to participate in a very synergetic session with peer reviewers who have varying areas of expertise.  I am looking forward to using the new code in future peer reviews.