With Hurricane Katrina demonstrating anew the need for
an effective and reliable network of private, nonprofit
organizations to help meet urgent national problems, and
recent calls from the Senate Finance Committee and others
for increased regulation of nonprofit organizations, a new
report from Johns Hopkins'
Nonprofit
Listening Post Project offers the first up-to-date
information on the actual governance and accountability
practices of U.S. nonprofit organizations.
More than 600 nonprofit organizations in the United
States were surveyed for the report, which reveals 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. These include setting organizational
missions (93 percent), setting the chief executive's
compensation (88 percent), establishing and reviewing
organizational budgets and finances (87 percent), reviewing
auditing and accounting policies and practices (83 percent)
and approving significant financial transactions (81
percent).
The survey also found that the overwhelming majority
of responding organizations already have other policies and
procedures in place to promote accountability and ethical
behavior. These include internal controls on finances and
financial accounting (98 percent), records retention
policies (84 percent), conflict of interest policies (83
percent) and travel expense policies (81 percent).
In addition, the vast majority of the organizations
reported having undergone an independent audit in the past
two years, and nearly two-thirds take part in best-practice
accreditation programs.
"There are many calls for reform and suggestions for
regulating nonprofit governance, but this is the first
comprehensive view of what these organizations are actually
doing," said Lester Salamon, director of the Center for Civil Society Studies at the
Johns Hopkins Institute for Policy
Studies, which oversees the Listening Post Project.
"While there will always be instances of poor
governance in any sector, what this report shows is that
the vast majority of nonprofit managers and governing
boards take their fiscal responsibilities very seriously
and have governance and accountability mechanisms in place
that are far more up to the challenge than some recent
accounts have suggested," Salamon said.
"This report provides some much-needed empirical
evidence on how nonprofit organizations are managing their
operations, and it demonstrates the inadvisability of
basing wide-ranging legislation on a handful of negative
anecdotes," said Peter Goldberg, CEO of the Alliance for
Children and Families and the chairman of the steering
committee to the Listening Post Project.
The Listening Post Project focuses on nonprofit
organizations operating in five key fields: children and
family services, elderly services and housing, community
and economic development, theaters and museums.
Copies of the Nonprofit Governance and Accountability
report, as well as other reports of the Listening Post
Project, are available at
www.jhu.edu/listeningpost/news.
The Listening Post Project is a collaborative
undertaking of the Center for Civil Society Studies at the
Johns Hopkins Institute for Policy Studies, Alliance for
Children and Families, Alliance for Nonprofit Management,
American Association of Homes and Services for the Aging,
American Association of Museums, National Council of
Nonprofit Associations, National Congress for Community
Economic Development and Theatre Communications Group. Its
goal is to monitor the health of the nation's nonprofit
organizations and assess how nonprofits are responding to
important economic and policy changes. Support for the
project has been provided by the Carnegie Corp. of New
York, Ewing Marion Kauffman Foundation, Rockefeller
Brothers Fund and Surdna Foundation.