At its base, “accountability” means taking responsibility for outcomes — both good and bad. But one common byproduct of accountability is that results are actually more likely to be positive than negative. That’s because accountable managers work proactively, seeking solutions to potential problems instead of sidestepping them. Here are some other ways for your not-for-profit to embrace this concept.
Accountability starts by complying with all laws and rules that apply to your nonprofit. Make sure new hires and board members understand these as well as your organization’s code of conduct. In fact, ask employees and board members to sign an ethical code — and hold them to it.
As your organization pursues its mission, it must do so reasonably and in the best interests of its constituents and community. Your status as a nonprofit means you’re obligated to use your resources to support your mission and benefit the community you serve. Evaluate programs accordingly, both in respect to the activities and their outcomes.
What goes into good governance
There can be no accountability without good governance. This starts with your nonprofit’s executives and managers, who must be accountable for failures as well as successes. But ultimately, governance is your board’s responsibility. Your board needs to understand the importance of its fiduciary duty and focus on the big picture, not the process-oriented details best handled at the staff or committee level.
For example, management might prepare internal financial statements and review performance against approved budgets on a quarterly basis. But it should present these statements to the board (or its audit or finance committee) for review and approval. Your board is also responsible for establishing and regularly assessing financial performance measurements.
Communication and transparency
Communication is a big part of accountability. Your annual report, for example, is designed to summarize the year’s activities and detail your nonprofit’s financial position. But the report’s list of board members, management staff, and other key employees can be just as important. Stakeholders want to be able to assign responsibility for results to actual people.
Your nonprofit’s Form 990 also provides the public with an overview of your programs, finances, governance, compliance, and compensation methods. Notably, charity watchdog groups use Form 990 information to help them evaluate nonprofits in such areas as fiscal responsibility and charitable impact.
Nonprofits that embrace accountability can generally look forward to greater trust and higher morale, improved teamwork and collaboration, and better results. A lack of accountability, on the other hand, can negatively affect everything from fundraising to recruiting to delivery of services. Don’t forget to evaluate your accounting and finance processes and accounting software to ensure you have accurate and timely data to make sound business decisions. Contact Cordia for consulting and outsourced accounting help.