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Topical Resource Lists

Nonprofit Organizations-Accountability:
A Resource List

In recent years—and due in part to several scandals, controversies, and outright scams that received a great deal of media attention-there has been increased public concern about the ethical underpinnings of the nonprofit sector. Watchdog groups and other critics are apprehensive about the tools currently available for monitoring the fiscal activities and governance of both nonprofits and foundations. At the same time, federal legislation-the Sarbanes-Oxley Act-has led to major changes in the accountability and oversight required of leaders in the business sphere. The Senate Finance Committee, foundation and nonprofit leaders, and scholars are all addressing the multiple issues and approaches that may help the independent sector to reach the goal of greater transparency, and the debates are likely to continue far into the future.

This resource list contains citations to selected articles and books from the Foundation Center's bibliographic database, the Catalog of Nonprofit Literature, on the subject of accountability. For a complete bibliography on this topic, search the catalog by entering "accountability" in the subject field.

Bell, Jeanne and Steve Zimmerman. "Absent the Audit: How Small Nonprofits can Demonstrate Accountability Without One." Nonprofit Quarterly vol. 14 (Spring 2007) p. 61-4.
Presents methods for small nonprofits to achieve fiscal accountability without the expense of an annual audit. The three goals of an audit are to inspire confidence in donors, ensure compliance with accounting standards, and prevent fraud. These goals can be met with other strategies in organizations that are not mandated to perform audits.

Boris, Elizabeth, Loren Renz, and Mark A. Hager. Foundation Expenses and Compensation: Interim Report. Washington, DC: Urban Institute, 2005. Subject File Number: 418
Full text:
Issued by the Urban Institute, the Foundation Center, and GuideStar, the report documents the dimensions of foundation expenses and reveals that major differences in foundations' operating styles have a great impact on their expense levels. Employment of paid staff, for instance, has the most significant effect on operating costs; international giving proves more expensive than local or national giving; and direct charitable activities, such as operating a facility for nonprofit programs, costs more than grantmaking alone. The findings suggest that, along with type and size, a foundation's mission and program goals are important factors to consider when analyzing its charitable expenditures.

Bowman, Woods and Angela L. Bies. "Can the Charitable Sector Regulate Itself?" Nonprofit Quarterly vol. 12 (Special issue, 2005) p. 39-42.
The authors consider the mechanisms now in place for oversight of nonprofits, including accreditation, standards, and codes of conduct, but note that these are not sector-wide. Though the Form 990 provides some degree of transparency, smaller charities are not required to file it, and the rate of inaccuracies on the form is high. The authors recommend a national system of accreditation to improve accountability, and remark on some of the efforts underway to create such a regulatory structure.

Christensen, Rachel A. and Alnoor Ebrahim. "How Does Accountability Affect Mission? The Case of a Nonprofit Serving Immigrants and Refugees." Nonprofit Management & Leadership vol. 17 (Winter 2006) p. 195-209.
The study finds that accountability requirements from funders "do not necessarily yield improved mission achievement." The authors explain how nonprofits can be effective while navigating stringent reporting mechanisms. The analysis indicates that more can be gained from building capacity in internal communications and coordination than from more detailed reporting.

Ebrahim, Alnoor. "Accountability Myopia: Losing Sight of Organizational Learning." Nonprofit and Voluntary Sector Quarterly vol. 34 (March 2005) p. 56-87.
Is more accountability always a good thing? The author takes on that premise, specifically as it relates to some types of nonprofits.

Fleishman, Joel L. The Foundation: A Great American Secret--How Private Wealth Is Changing the World. New York, NY: PublicAffairs. 2007. xxiv, 357 p. Call Number: 418 FLE
Fleishman's study is based on interviews with senior officers or trustees at approximately 100 of the (mostly) largest foundations. He explains how foundations operate in practice, some of the motivations for donors, and the unique--often paradoxical--place that foundations have in American society. Fleishman also turns his attention to two current issues that are paramount in the field: transparency and accountability.

Jackson, Peggy M. Sarbanes-Oxley for Nonprofit Boards : a New Governance Paradigm. Hoboken, NJ: John Wiley & Sons. 2006. xiii, 194 p. Call Number: 944 JAC NEW
A guide on how to integrate Sarbanes-Oxley requirements and best practices into an organization. Topics include interpreting a board's culture, observing board dysfunction, reaching a higher level of productivity, and factors that promote fraud.

Learning from Sarbanes-Oxley: a Checklist for Charities and Foundations. Washington, DC: Independent Sector. 2006. 3 p. Subject File Number: 944
Full text:
The checklist covers topics such as conflict of interest, the audit committee, financial statements, disclosure, and whistle-blower protection.

Ostrower, Francie. Nonprofit Governance in the United States: Findings on Performance and Accountability from the First National Representative Study. Washington, DC: Urban Institute Center on Nonprofits and Philanthropy. 2007. iv, 26 p.
Full text:
Results of a survey of over 5,100 nonprofit organizations of varied size, type, and location. The study addresses three areas of nonprofit governance: how accountability policies such as Sarbanes-Oxley affect nonprofits; factors that promote or impede boards' stewardship of organizations; and the board composition and recruitment process. With bibliographical references.

Panel on the Nonprofit Sector. Strengthening Transparency, Governance, and Accountability of Charitable Organizations: A Final Report to Congress and the Nonprofit Sector. Washington, DC: Independent Sector. 2005. 112 p. Call Number: 406 PAN FIN
Full text:
The preface states "The recommendations provide approaches that maintain the crucial balance between legitimate oversight and protecting the independence that charitable organizations need to remain innovative and effective."

Panel on the Nonprofit Sector. Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations. Washington, DC: Independent Sector. 2007. 28 p. Subject File Number: 406
Full text:
The guide outlines 33 practices designed to support board members and staff leaders of every charitable organization as they work to improve their own operations. The Panel on the Nonprofit Sector incorporated a careful review of more than 50 self-regulation systems, counsel from a diverse committee of experts, and significant feedback from the field in the development of the principles outlined in the publication.

Perry, Suzanne. "Charities Continue to Face Scrutiny from the Senate." Chronicle of Philanthropy vol. 19 (25 January 2007) p. 29-30.
The Democrat-controlled 110th Congress wants to tighten measures against nonprofit fraud and abuse, including increased self-regulation. However, Congress also wants to promote philanthropy in order to offset federal funding.

Salamon, Lester M. and Stephanie L. Geller. "Nonprofit Governance and Accountability." Communiqué No. 4. Baltimore, MD: The Johns Hopkins Center for Civil Society Studies, October 2005.
Full text:
Results from Johns Hopkins University's Listening Post survey reveal that the overwhelming majority of the organizations responding have boards of directors that are already significantly involved in the key oversight functions that nonprofit boards are expected to perform.

Salopek, Jennifer J. "In Plain Sight: the Many Facets of Accountability." Currents vol. 32 (July-August 2006) p. 26-31, 33-4.
More development officers are reexamining their policies and practices to help them become more transparent and accountable. The article covers several topics including donor rights, communication, stewardship, gift acknowledgement, and donor intent.

White, Doug. Charity on Trial: What You Need to Know Before You Give. Fort Lee, NJ: Barricade Books. 2007. xxiii, 295 p. Call Number: 603 WHI
White discusses why the nonprofits world is facing increased government and public scrutiny, and raises accountability issues that donors should be aware of. The volume contains many case studies of scandals in the sector and highlights a few exemplary organizations as well. Topics covered include faith-based organizations, charity and terrorism, planned giving, fundraising, reporting requirements, and charity ratings.

Internet Links

BoardSource, formerly the National Center for Nonprofit Boards, is the premier resource for practical information, tools and best practices, training, and leadership development for board members of nonprofit organizations worldwide. BoardSource publishes numerous books and pamphlets as part of its mission to help build strong and effective nonprofit boards.

Independent Sector
Independent Sector is a nonpartisan coalition of approximately 600 organizations with the vision of a just and inclusive society of active citizens, vibrant communities, effective institutions, and a healthy democracy. The organization offers tools, resources, and links to help nonprofits and foundations improve practice and self regulation, as well as information on proposals being considered by policymakers to strengthen legislative and regulatory oversight.

Panel on the Nonprofit Sector
The Panel on the Nonprofit Sector is an independent effort by charities and foundations to ensure that the nonprofit community remains a vibrant and healthy part of American society. Formed by Independent Sector in October 2004 at the encouragement of the U.S. Senate Finance Committee, the Panel issued a final report of recommendations for Congress to improve the oversight and governance of charitable organizations. The Panel on the Nonprofit Sector is comprised of 24 nonprofit and philanthropic leaders whose organizations encompass great diversity in location, mission, perspective, and scope of work.

Quality 990
Quality 990 was created to serve organizations and individuals concerned with improving the quality of financial reporting in the nonprofit sector. It is dedicated to improving the quality of IRS Forms 990 filed by nonprofit organizations. With new regulations and wider, simpler access to a nonprofit's tax form, this site offers many resources to assist the community involved in filing this form. There is information on forming or joining a Nonprofit Accountability Collaborative (990 NAC), which are forums consisting of accountants, nonprofit managers, regulators, and the general public. Local 990 NAC activities fall under two main categories: education and recommendations. Comprehensive guides to the form are available, along with links to information that help in understanding the form itself and the rules related to its disclosure.

Note: Visit the Internal Revenue Service web site to learn more about the Form 990 redesign for tax year 2008 and later.
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