Your non-profit’s mission is the core of your organization, and it is imperative that not only does your organization make an impact, but that it does so effectively and that the broader community understands this impact. Accountability allows for the work your non-profit does day in and day out to be assessed for effectiveness and build your reputation within the community. Additionally, accountability helps fulfill your non-profit’s fiduciary responsibilities to donors and other constituents.
Transparent programs and decision making
Your status as a non-profit means you’re obligated to use your resources to support your mission and benefit the community you serve. First, accountability starts by complying with all applicable laws and rules. Additionally, your programs need to be evaluated consistently for their activities and outcomes, incorporating the interests of your constituents and community. Good governance, stemming from your board, is also essential. The board must keep its focus on the bigger picture to ensure that your non-profit’s programs align with its mission and fundraising, and not get mired into the day-to-day processes. For example, management will likely prepare internal financial statements and review performance against approved budgets on a quarterly basis. Your board will be responsible for approving these budgets and programs and is also responsible for establishing and regularly assessing financial performance measurements.
Communicating with your community
Communication is a big part of accountability. Your annual report, for example, is designed to summarize the year’s activities and detail your non-profit’s financial position. However, the people listed in the annual report can be just as important, like the board members, management staff, and other key employees. This is because the local community will be interested in who is managing your company’s programs and assigning responsibility for results to actual names. Your non-profit’s Form 990 also provides the public with an overview of your organization’s programs, finances, governance, compliance, and compensation methods. Notably, charity watchdog groups use 990 information to rate non-profits.
Your non-profit’s accountability is important for your reputation, the community involved, donor relations, and program effectiveness. Prioritizing accountability can help your organization thrive. Ernst Wintter & Associates LLP specializes in California non-profit audits and tax preparation. Contact us today for help with your non-profit audit or tax prep needs.