CESRA STANDARDS OF CHARITY ACCOUNTABILITY
While there is no single definition of a “best practices for charities” for each and every nonprofit organization;-
But there are well-recognized legal, ethical, and accountability practices that are expected of well-run and accountable charitable nonprofits.
Recognizing and adopting these practices not only benefits charitable nonprofits;- but also donors, and ultimately the individuals and communities that charitable nonprofits serve.
We encourage you to become familiar with our recommended 10 standards of charity accountability:-
Adopting the standards allows your organization to be trusted by the donors, therefore attracting a lot of benefits for your organization.
Standard 1 – Registration and address
A nonprofit must be registered by one of the different bodies in their country and should produce a certificate of registration upon request. It must have a physical address (No P.O. Boxes). This is the address where they carry their charitable activities and must be available during normal business hours.
Standard 2 – Constitution and effectiveness Issues
Every charitable organization should have a constitution in Place. The constitution of a nonprofit organization specifies how the organization operates. A typical constitution addresses all aspects of the organization, purpose, functions, persons in charge and members. Normally you have to write it before you create your nonprofit organization, specify how the constitution will come into force, and detail how the organization can change the constitution if necessary. In addition to a constitution, a nonprofit organization may have bylaws and other rules governing specific aspects of the operation.
Standard 3: Mission and Vision Statement
A mission statement is a statement that is used to communicate the purpose of an organization. Mission statements are normally short and simple statements which outline what the organization’s purpose is and are related to the specific sector an organization operates in.
Standard 4: Charity Activities
Every organization should have a document that outlines the following;
(a) A summary of the past year’s program service accomplishments,
(b) A summary of long term and short term needs of the organization
Standard 5 – Bank Accounts
Every organization shall open a bank account under the name of the organization. All donations and fundraising proceeds should be directed to the nonprofit bank account and not to the individual accounts numbers.
Standard 6 – Governance
Every organization shall be governed by a responsible board of not less than five individuals, a majority of whom shall be independent, who shall meet at least semiannually to establish policy and review its accomplishments.
Standard 7- Leadership and Operational Management
The charity should have in place a staff who runs as an executive responsible for the day-to-day management and operations of the organization. The executive should be committed to the mission of the organization and have the skills necessary to manage the paid and volunteer talent, and financial resources of the organization.
Standard 8 – Use of Digital Resources and Compliance with Laws
Organizations can no longer rely solely on phone calls, mailings, and event marketing to raise money and engage new donors. Today’s nonprofits need to be innovative in their efforts, and that’s why the smart ones are investing heavily in their websites and digital marketing. A charity should therefore have some presence on the social media – (your profile on CSR-world) is the beginning.
Standard 9 – Complaints
Charities and other not-for-profits should provide a safe and effective service to those who wish to make a complaint to or about the charity. An organization should have policies in place for complaint procedures. The complaint standard’s goal is to make sure the charity responds promptly to and act on complaints brought to its attention. (see CESRA complaints form)
Standard 10 – Finance, and Compensation
- Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as a voting member(s) of the board. Compensated members shall not serve as the board’s chair or treasurer.
- Every organization should spend at least 65% of its total expenses on program activities.
- Make available to all, on request, complete annual financial statements prepared in accordance with generally accepted accounting principles
Standard 11- Stewardship of Charitable Gifts
Stewardship involves managing gifts as donors intended, updating donors on the progress and impact of their gifts, and easing donors into the next cultivation process by keeping them involved with your organization.
Standard 12: Board Meetings
Every non-profit should have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
Standard 13. Annual Report
The requirement to submit annual returns for your charitable organization is also part of standards of Charity Accountability. Each Non-profit is encouraged to submit annual returns 3 months after the end of their financial year on – (annual report form)
Standard 14. Conflicts of Interest
A conflict of interest is a transaction or arrangement that might benefit the private interest of an officer, board member, or employee. Nonprofits should have a written conflict of interest policy and statement in place.
- The conflict of interest policy should identify the types of conduct or transactions that raise conflict of interest concerns in your organization.
- The conflict of interest statement should provide space for the board member, employee or volunteer to disclose any known interests that the individual, or a member of the individual’s immediate family, has in any business entity which transacts business with the organization.