Compliance Programs in Non Profits: The 3 W s: Working Together, Watchdogs, and Wonderful Ideas. Purpose of session

Transcription

1 Compliance Programs in Non Profits: The 3 W s: Working Together, Watchdogs, and Wonderful Ideas Kitty Holt, Plan International USA Gayle Macias, World Vision USA 1 Purpose of session Learn how two charities foster collaboration (internally and externally); Find out more about Charity Watchdogs / other non profit overseers and how to meet their standards; and Take home some nonprofit best practices. 2 1

2 Plan International USA Who we are Plan International USA is part of Plan International, a global organization that works side by side with communities in 50 developing countries to end the cycle of poverty for children. Who we serve Plan works with over 58,000 communities across Africa, Asia, and Central and South America to improve the lives of 119 million people, including more than 56 million children, regardless of their religion, race, ethnicity, or gender. Why we serve Plan s vision is of a world in which all children realize their full potential in societies that respect people's rights and dignity. How we serve We work side by side with communities to end the cycle of poverty for children, developing solutions community by community to ensure long term sustainability. Solutions range from clean water and healthcare programs to education projects and child protection initiatives. 3 World Vision Who we are World Vision is a Christian humanitarian organization dedicated to working with children, families, and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. Who we serve We serve close to 100 million people in nearly 100 countries around the world. World Vision serves all people, regardless of religion, race, ethnicity, or gender. Why we serve Motivated by our faith in Jesus Christ, we serve alongside the poor and oppressed as a demonstration of God s unconditional love for all people How we serve We provide emergency assistance to children and families affected by natural disasters, civil conflict, work with communities to develop long term solutions to alleviate poverty and advocate for justice on behalf of the poor. 4 2

3 1) Working Together 5 Fostering Collaboration Typical pitfalls/challenges that face charities when trying to adhere to multiple regulations? How can you work within and outside of your organization to foster collaboration and bring about positive change? 6 3

4 Examples of collaboration at Plan International USA Plan International USA s Compliance Committee An internal collaboration Choosing members Meeting frequency, agenda and attendance Charity Navigator s Financial Measures Taskforce An external collaboration Financial metrics undergoing change Ability to feed into those changes 7 Examples of collaboration at World Vision Internal: WVI Partnership (Global Office of Accountability) Gateway 2 Grants (USG Grant Certification) GRC Council (forming) External: InsideNGO InterAction Transparency International (Anti corruption Handbook) 8 4

5 Authorities under which We Work Federal Law State & Local Law External Agency Guidelines Umbrella of Governance WVI (Partnership) Core Documents Vision/Mission Statement Ministry Policies Core Values Statement of Faith Covenant of Partnership WVUS Board Standing Policies WVUS Operational Policies NPO Compliance Networking Group Quarterly Conference Calls Organizations rotate hosting conference calls Host organization drafts agenda, with input NPO/NGO s 2007, 2009, 2010 & 2011 Survey Roster of participating Organizations Contact Information to join 10 5

6 SCCE Nonprofit Network Focus on: Issues unique to the NPO sector Compliance with US Federal and State Laws and Regulations Charitable Fundraising Donor Requirements NPO Governance NPO Industry Standards 11 2) Watchdogs 12 6

7 Charity Watchdogs 13 Watchdog Standards Focus on Governance (board, appropriate oversight, min. number members and # meetings, compensation, no material conflicts of interest) Financial Management (audited financials, 990, how money is spent, don t hoard money, have board approved budget, make financials available) Fundraising (accurate, truthful, not misleading in whole or in part; use $ as stated; privacy policy; clearly disclose how cause related marketing activities will work) Effectiveness Measurement evolving charity evaluation 14 7

8 Who are they? Name # standards Alexa traffic rank in U.S. (8/2012) Self regulation or rating agency? (Voluntary / invol?) ACCORD (formerly AERDO) 11 13,061,859 Self regulation (vol) (WW) Better Business Bureau Rating agency (vol) Charities Review Council 27 2,865,123 (WW) Rating agency (vol) Charity Navigator 24 10,443 Rating agency (invol) Charity Watch (formerly AIP) 3 54,706 Rating agency (invol) Direct Marketing Association 61 16,412 Self regulation (vol) Evangelical Council for Financial Accountability (ECFA) 7 121,240 Self regulation (vol) Givewell Detailed rsch 134,315 Rating agency (invol) Great NonProfits n/a, reviews 31,199 Rating agency (invol) only InterAction ,056 Self regulation (vol) International Aid Transparency Initiative n/a, a standard way to publish data 5,630,326 (WW) Self regulation (vol) Panel on the Nonprofit Sector 33 principles 14,128,086 (WW) n/a 15 Donor Benefits & Charity Benefits Visibility of non-profit transparency Rating system supplements donor research Evaluations strengthen public confidence in the charity Accountability partner Marketing tool Best practice criteria Influence with state and Federal charity regulators 16 8

9 Charity Watchdogs are just one of 5 categories of Charity regulators Other Charity Regulators Include: The Federal Government (e.g., IRS, DoJ, FTC, USPS) The 50 states (Attorneys General, Charity Commissioners, Secretaries of State) Many counties and municipalities (County and City Prosecutors) Donors (e.g. corporations, foundations, individuals) Each regulates charity fundraising in numerous ways, including in the following areas: Specific Disclosure Statements on solicitations Trademarks Credit Card Donations Electronic Funds Transfers ( EFT ) Paid Solicitor Requirements Commercial Co-Venturers Corporate Donations and Unrelated Business Income Tax Events Donor Acknowledgments and Benefits Donor Privacy Grant requirements 17 What s next with Charity Navigator Charity Navigator 2.0 Charity Navigator 2+ Charity Navigator

10 How we work to meet standards Plan International USA: Excel spreadsheet (available after meeting if me or give business card) Break standards up by team and share by team Staff training, team by team Proofreading team All-staff presentations Build into Board standing policies Base criticism on standards, not personal beliefs Be willing to work with others; not be a roadblock 19 How we work to meet standards World Vision: External Audit (KPMG) A133 Audit (USG Grants) IRS 990 (voluntary as religious organization) Audit & Risk Management Services (ARMS) IA Board, BSP (WV Peer Review) President s Office (BBB) Office of Accountability, Compliance, and Ethics (ACE) (InterAction) Finance (Charity Navigator) Mobilization (ECFA) (Communications Review) Programs (International and US) (USG Grants) 20 10

11 3) Wonderful Ideas 21 Some best practices from Plan International USA Contract review Policy on policies Monthly HR/Compliance meetings 22 11

12 Contract Review Policy Before Not clear who should be reviewing contracts AP receiving bills but unaware what was in contract Managers not always aware of contracts their staff were signing off on After New policy which clearly delineates who reviews contracts (i.e., all fundraising contracts are reviewed by external Legal counsel; all contracts of $25K or more must be reviewed by manager, etc.) No bills will be paid without contract coming to AP first Accountability manager of person doing contract must sign off on contract checklist 23 Policy on Policies Before After No clear approval process so some policies took forever to be implemented while others were implemented immediately but without correct oversight Staff not always aware of policies Right people did not give input into organizational policies; policies did not include viewpoint of legal, compliance Policies in different formats No idea when policy designed, by whom, or who to go to with questions While anyone can develop a policy if there is a clear business case, there is a specific review and approval process in place, along with a timeframe All staff are notified of new policies. (The creator of the policy must note how they will inform and train staff on the policy at the time they create or revise it.) ET must be informed of any potential new or changing policies so they can involve staff. Compliance Committee member, E&CO, and ET must review all policies. ET determines if must go to outside Legal Developed a standard template; all policies must fit into that template Policy includes header which details the date approved, who to go to with questions, when it is up for review 24 12

13 Monthly HR/Compliance meetings Before Some stepping on toes as the Compliance role is newer but necessarily touches on many HR issues Some efforts being duplicated (core values, background checks) Sometimes, issues build up Can t get to everything on our To Do lists After Able to clarify who is responsible for what Able to work together, and using strengths of different staff, break up responsibilities (for example, ECO researched best practices for background checks and wrote recommendations for the HR team to put in place) Issues are discussed and resolved on a monthly basis Still a problem, of course, but find that when we work together we can tackle more issues than either of us would working alone. 25 WVUS Audit & Risk Management Services (ARMS) May 2012 Board of Directors Larry Probus Senior, Vice President Strategic Solutions Carol A. Morgan VP Audit & Risk Management Gayle Macias Senior Director, Corporate Compliance Eline Nelson Senior Internal Auditor Kanagasabai Pathmacaanthan Senior Internal Auditor Brenda Williamson Senior Internal Auditor Paul Duke Sr. Enterprise Risk Manager 13

14 Some best practices from World Vision US Office of Accountability, Compliance, and Ethics (ACE) Policy and procedure administration Code Guidebook Internal reporting WV Partnership Peer Review (Governance, Core Documents, Policy) Integrity Hotline (ARMS, HR, Legal) WVUS Communications Review InterAction PVO Standards and Self Certification Plus Evangelical Council for Financial Accountability (ECFA) ARMS/Enterprise Risk Management (ERM) Partnering internally: Finance, Grants, HR, Legal 27 Tips for Nonprofits File required tax returns and reports timely Pay reasonable compensation Remain true to your mission Use assets for NP use only Have a Conflict of Interest Policy/Disclosure Limit any unrelated business income Be responsive to correspondence from the IRS and other government agencies/watchdogs Wisdom in the use and risks with social media 28 14

15 Questions? Feel free to ask questions now or contact us at: Kitty Holt, Plan International USA Gayle Macias, World Vision Let us know if you want to join the Non profit Compliance Networking Group or want a copy of the charity watchdog standards 29 15