The Charities Review Council, a group in St. Paul, Minn., that serves people who support charities with financial donations, has launched revised accountability standards for nonprofits, along with an updated online tool nonprofits can use to review their compliance with the new standards.
Initially drafted in 1998, the council says it updated the changes to address charity performance in the areas of public disclosure, governance, financial activity and fundraising, and to reflect economic, demographic, legal and societal changes.
A major focus, the group says, is the importance of engaged and effective governance, with the revised standards reflecting questions posed by the new Form 990 that many nonprofits must file with the IRS.
Other additions to the standards include measuring and communicating accomplishments involving community impact; protecting donor information; limiting consecutive board terms; and assessing and strengthening diversity and inclusivity.
Other changes include allowing for greater infrastructure expenses as a necessary investment for nonprofits, and a more accurate analysis of a charity’s financial healthy.
“Ultimately, charities that meet the standards provide peace of mind for donors who want assurances that they’re making smart giving decisions in supporting accountable, transparent and trustworthy organizations,” Rich Cowles, executive director of the Charities Review Council, says in a statement.
Over 400 nonprofits have voluntarily participated in the online review tool, known as the Accountability Wizard.
The review is valid for three years and may be renewed after that period.
The council also has extended to a full year from 60 days the time a nonprofit has to complete its review.
The council provides free technical assistance to help nonprofits meet the standards.
Charities pay $100 to $1,500 for the review, based on a sliding scale of one percent of one percent of annual expenses, with the average fee totaling about $400.