Launch Newsletter Article Example 1 Donors Forum of Chicago

Preserving the public trust

Principles and resources help nonprofits improve effectiveness (from Forumnotes newsletter, February 2005) More than 30,000 charitable and grantmaking organizations work in Illinois to better the lives of its residents through education, health care, childrens services, cultural events and more. To best serve the public good, nonprofit organizations, including foundations, must have effective management and governance practices in place. The Donors Forum of Chicago created the Preserving the Public Trust Initiative to help Illinois nonprofits take steps to strengthen governance and management and thus be better able to realize their missions. The key parts of the Initiative are a set of principles and best practices to guide organizations and the tools to help implement them. The majority of nonprofits comply with all applicable rules regulating taxexempt organizations. Why then should a nonprofit organization, busy providing needed services and resources, take time to improve its governance and operational structure? You cant do good without doing well, said Tim Herwig, vice president of community affairs at TCF Bank. You cant deliver programs that affect change unless you manage your operations efficiently, responsibly and ethically. The Initiative aims to raise awareness in the philanthropic and nonprofit community of the increasing importance of good governance and management. Effective foundations and nonprofits have more credibility with the public, and individual donors are more likely to contribute to charitable organizations with sound operating procedures. If the sector as a whole is better managed, it sends a message that we take seriously the issue of public trust, said Valerie S. Lies, president and CEO of the Donors Forum. The first project of its kind in Illinois, the Preserving the Public Trust Initiative was created in mid-2004. The Donors Forum convened a task force of 29 nonprofit and foundation leaders throughout the state, who drafted an initial set of principles and best practices. In August and September, meetings were held around the state so nonprofit staff and professional advisors could provide feedback.

Different organizations bring a different understanding to the principles based on their experience, said Paula Wolff, senior executive of Chicago Metropolis 2020 and chair of the task force. For the principles to be effective, they have to be understood and accepted by a broad base of organizations. Revised to reflect the unique needs and concerns facing the states nonprofit community, the Illinois Nonprofit Principles and Best Practices were approved by the Donors Forums board of directors last November. The Principles and Best Practices are a road map with directions to help make nonprofit organizations stronger and more efficient, going beyond compliance with the law. The principles cover a wide range of important issues, including board responsibilities, ethical conduct, legal compliance, responsible oversight of finances, and communication with the public, donors and grantees. The best practices are specific steps organizations can take to achieve the principles. The Principles and Best Practices were designed to be applicable to all foundations and charitable organizations. The task force recognized that the Illinois nonprofit sector is diverse, as organizations vary in financial resources, experience, and number of staff and volunteers. As such, each nonprofit can look at the Principles differently to determine their need and ability to implement them. The Illinois Nonprofit Principles and Best Practices are a starting point for improving effectiveness. The Donors Forum recommends that nonprofit leaders talk to their staff and board about ethics and good governance. Organizations should acknowledge the principles and best practices they are already following, and work towards understanding and implementing the ones they are not. The Donors Forum is currently working to disseminate the Principles and Best Practices and connect nonprofits with resources useful for implementation. The Donors Forum offers free tools such as job descriptions for board members, a sample conflict of interest policy, 990-PF reporting tips and public disclosure requirements. Visit www.donorsforum.org/publictrust to read the full text of the Principles and find resources to help implement them. Going forward, the Donors Forum will host programs for foundations and nonprofits on management and governance topics, such as the Great Governance series of nonprofit workshops in the spring. The Donors Forum also plans to work with partner organizations to hold additional programs in locations around the state.

The Preserving the Public Trust Initiative is part of a national effort to improve nonprofit management and governance. The Council on Foundations developed stewardship principles for corporate grantmakers and family foundations. In March, the Panel on the Nonprofit Sector, convened by Independent Sector, will submit to the U.S. Senate recommendations to improve governance, ethical conduct and oversight of the nonprofit sector.