Accountability is a term used by nonprofit organizations, but what does the term mean? It means taking responsibility for actions and outcomes. Operating with a keen sense of accountability into practice helps nonprofit managers discover solutions to difficult problems, instead of avoiding them. Because nonprofit organizations depend on the trust of the public to achieve their fundraising and operational goals, they must establish a culture of accountability to maintain vital trust.
Letโs see how nonprofit organizations can put accountability into practice.
Ensure Maximum Compliance
Building a culture of accountability begins by following all laws and regulations that apply to your type of nonprofit organization. Not only must board members ensure compliance, but employees and volunteers must be aware of compliance issues as well. One of the most effective ways to ensure compliance with state and federal laws and regulations involves conducting regularly scheduled compliance audits for your nonprofit organization.
Nonprofit compliance includes following the regulations set forth by the Internal Revenue Service (IRS), as well as the Sarbanes-Oxley Act of 2002.
Effective Governance
Effective governance represents the foundation for establishing a culture of accountability for your nonprofit. Your organizationโs managers and board members must be held accountable not only for every success, but for every failure as well. For example, the fundraising team should be held accountable for not meeting a fundraising goal. Board members should focus on the big picture of effective governance and leave the details to the team of managers that run the daily operations.
Transparency
Nonprofits that establish a culture of accountability do a good job of opening their operations to the public. Transparency is needed to build the type of trust required to recruit new donors, as well as retain loyal donors. Your nonprofit organization must clearly define its mission and target realistic fundraising goals to develop a transparent operation. Honesty plays an important role in developing transparency, as it also builds the trust required to make your nonprofit organization successful.
Handling Donor Information
Nonprofit organizations acquire plenty of personal information from individual donors. Those donors expect their sensitive financial data to remain private and secure. Breaching a donorโs privacy significantly damages the reputation of a nonprofit and can lead to legal consequences or loss of funding. Ensuring the protection of donor data represents a goal that develops and maintains a culture of accountability for your nonprofit organization. This includes implementing secure data storage practices, training staff on privacy protocols, and regularly reviewing data security policies to prevent unauthorized access or misuse. Demonstrating a strong commitment to data protection also builds long-term donor trust and confidence.
Admit Mistakes Apply Accountability Into Practice
There is no place for passing the buck for a nonprofit that wants to establish a strong culture of accountability. As they say, to err is human. Admitting to mistakes quickly after they occur helps your nonprofit move on quicker from any missteps committed by a board member, manager, employee, or volunteer.
The Bottom Line: Positive Results
Nonprofit organizations that fully embrace a culture of accountability should reap the rewards of a high level of trust that enhances morale, teamwork, and productivity. Accountability also is an important mission to achieve if you expect your nonprofit to attract more donors.
At Ernst Wintter & Associates LLP, we provide comprehensive audit, review, examination and compilation services as well as tax services that fit your business needs. Our professionals have specific expertise in the financial services industry, nonprofit sector, and employee benefit plan audit requirements. Please contact us today.
