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State association goes national with accreditation.

The Standards for Excellence Institute, part of the Maryland Association of Nonprofit Organizations, is going national with a program that previously was available in only a few states in what organization leaders said is a response to concerns about practices and accountability in the nonprofit sector,.

The Standards for Excellence certification process will offer any organization in the country an opportunity to meet an array of standards in accountability, governance, management and operations.

Previously, the Institute's certificate was available in Maryland, Idaho, Louisiana, North Carolina, Georgia, Ohio, and Pennsylvania, through state nonprofit associations, and in Illinois through a regional organization. Now, it is being offered throughout the country by the Baltimore-based organization.

To earn the certificate, nonprofits must prove that they comply with 55 performance standards specified under the Institute's eight guiding I principles:

[check] Mission and program;

[check] Governing board:

[check] Conflict of interest:

[check] Human resources;

[check] Financial and legal accountability;

[check] Openness;

[check] Fundraising, and;

Public affairs/public policy. Participating organizations can display the Institute's certificate on their Web sites and fundraising materials.

The Standards for Excellence initiative is meant to strengthen the ability of nonprofits to act ethically g and accountably in their management and governance while enhancing the public's trust in the nonprofit sector.

"There are several trends that are taking place that have escalated the importance of self regulation in the nonprofit sector," said Peter Berns, CEO of the Institute and executive director of the Maryland Association of Nonprofit Organizations.

Berns highlighted four areas that have been most important.

The first area is what seems to be a continuing history of scandals and misbehavior, with people using nonprofits to their own advantage, he said. The second area is heightened regulatory and legislative scrutiny.

The third issue is a large growth in the number of nonprofits, with the result that the general public has difficulty discerning one from another. The fourth area is what Berns called a gap between expectations and performance regarding nonprofits.

"Expectations are out ahead of what organizations are able to accomplish," Berns said. He cited as one example the fact that everyone will say that nonprofits should have a conflict of interest policy, but that very few actually do.

Berns also mentioned the general public's perception of nonprofit organizations and of institutions in general, noting that for nonprofits, public trust is extremely important.

"These are factors that in our view make it really important for the nonprofit sector to have in place a system of self regulation," he said. "We have been trying it in Maryland since the 1990s, so now we're going to take that expertise and apply it nationally." The program that started in Maryland was repeated in the other states from 2001 to 2004.

Berns emphasized that, more than just a seal, the certification process is meant to establish a meaningful system of self regulation. It has a three-pronged approach, consisting of standards, an education program the Institute has established for nonprofits, and the opportunity for nonprofits to demonstrate that they meet certain criteria.

"As we went from one state to the additional states, we found as we started to replicate the program that it replicates very easily and that our partner states were changing virtually nothing," Berns added. "There was some tinkering around the edges without making substantial changes in content. That led us to see that what we created here could lead to a national set of standards."

Berns said that the national effort will operate in two ways, first by directing interested nonprofits toward one of its replication partners if one is nearby or having the Institute serve directly if an organization is not near one of the partners.

An essential part of the program is its educational approach. Again, using the example of conflict of interest, Berns emphasized that the Institute has two ways of helping an organization that approaches it asking for help. One is to offer a training program. The second is to make available a resource packet of materials the Institute has assembled on conflict of interest. This material is available online and includes a narrative that will help visitors walk though it.

"Actually, we have 22 resource packets that cover our 55 standards," Berns said, adding that the Institute also has created several training programs that it is going to develop throughout the country. These programs are aimed at helping organizations meet the standards needed for a certificate even before they apply.

The application process takes from three to four months, Berns said, but preparation for application can take a year or more.

"A significant part of the value of the program is that it is a tremendous learning experience for their programs," Berns added. "They have told us it gives them an opportunity to assess what they're doing."

The fee schedule varies depending on the size of the location and whether it is a member of the Institute. The cost for a member organization with a budget of less than $250,000 is $300. The cost for a nonmember organization with a budget of more than $100 million is $30,000.

Berns said that the Institute has a waiting list of organizations that are interested in the program, although he did not have any specific numbers of how many have inquired or are in the process of applying.

One organization that has been working with the Institute is the Pennsylvania Association of Nonprofit Organizations (PANO). According to figures released by Patricia Mogan, PANO's Standards for Excellence officer, all of its members have agreed to commit to the Guiding Principles of the Standards for Excellence and 63 have formally agreed to adopt the standards. Further, 28 new or modified training programs have been offered, 5,500 Standards for Excellence booklets have been distributed and 5,575 educational resource packets relating to the standards have been distributed. PANO has received 3,908 inquiries about the standards, either on the Standards portion of its Web site or by email, telephone or fax.

The Giving Trust, which serves northeastern Illinois, has both been certified by the Institute and served as a replication partner.

"Having gone through the program, we are reassured about the integrity of the program," said Stasia Swisler, CEO of The Giving Trust. "It took us nine months. It was rigorous, but it was certainly doable. In and of itself it is an ethical process. It was a fair and open process, there was dialogue, but at the same time there were very specific steps we had to go through," she said.

"The bottom line is that certification means something to all of us, board, staff, volunteers. We are putting best practices into our day-to-day operations. The organization is positioned for sustainability and long-term success."

Swisler said being a replication partner has been a case of taking part "but from the other side of the table. To implement it has taken forethought and proactive steps on our part to make sure we are abiding by and following through on the ethical process that is required to certify."

Rather than being seen as state specific, the certification is portable. "I am a big fan of (the Institutes standards program)" said Karen Beavor, president and CEO of the Georgia Center for Nonprofits in Atlanta. "I think centralizing that program and making it into a national standard has a lot of benefit. It has more credibility from a national standpoint than it does on just a local level."

A double-dip?

One concern about the Institute's certificate is possible duplication of a program that is already in place, sponsored by the BBB Wise Giving Alliance.

The Alliance program includes a list of organizations that meet the Standards for Charity Accountability, based on materials provided to the Alliance by the organizations.

H. Art Taylor, president and CEO of the Arlington, Va.-based BBB Wise Giving Alliance, said that although there are similarities, the two programs are complementary and not competitive.

"If you look at what we have at the Wise Giving program, it is more donor focused," Taylor said, noting that the Institute's program is aimed at providing organizations with specific information regarding how to improve themselves, but the Alliance directs its efforts toward providing information to donors and prospective donors.

"While organizations may improve by conducting themselves in compliance with our standards, that's less our focus," Taylor continued. "We don't have as many standards as (the Institute) does. We are focused on, 'How do we get donors the information they need?'"

To that end, the Alliance will issue a report on its Web site and in its quarterly guide that a certain organization failed to meet a specific standard or standards and why it failed, Taylor said. By contrast, the Institute will either give or not give a certificate, but does not report failures.

"A more subtle point is that groups pay for the (Institute's) evaluation, which I think is entirely appropriate," Taylor said. "Our evaluation is totally free of charge, and the reason is that we want to be able to make our program available. When a donor comes and says, 'Would you give us an evaluation of Charity X?,' we want to do that evaluation and we don't want the charity to say, 'We don't want to be charged for an evaluation someone else is demanding, "Taylor said. "Can charities pay (the Alliance)? Absolutely. We offer the Charity Seal. If an organization meets our standards and chooses to pay for it, they can use our seal."

Taylor was referring the BBB Wise Giving Alliance Charity Seal, which is available to organizations that have been found to meet the Alliance's standards and that have completed two fiscal years of operation. Organizations that wish to receive the Seal pay a fee based on organizational size, from $1,000 for those of less than a $1 million budget to $15,000 for those of $100 million or more, and they sign a licensing agreement. Organizations can then use the seal on their Web sites and printed materials.

"A final difference is that as of now the Wise Giving Alliance only focuses on national charities," Taylor said. "However, we do have local bureaus that do charity review."

The first seal was awarded in September of 2003, and Taylor said he finds the response to be encouraging.

"Right now, 71 organizations have (the Seal), which is not bad for less than two years and not a lot of marketing," he said. "It has produced quite a few impressions in the sector," said Taylor.

"The BBB seal means that we are following the guidelines and standards set forth by the BBB," said Alice G. Archabel, vice president of philanthropy at America's Second Harvest in Chicago. "We feel it is important to communicate to our donors and volunteers that we are fiscally responsible. By carrying the BBB seal, we are offering our donors the certification that we meet the standards and guidelines set forth by the BBB. As more charities become scrutinized by the way they manage their fundraising, the BBB offers donors the opportunity to be assured that they are contributing to a fiscally sound organization."

Clela Rorex, CFO of the Native American Rights Fund in Boulder, Colo., said that her organization uses the Alliance's Charity Seal on its direct mail fundraising solicitations and its Web site.

"We're hoping it will give potential donors the reassurance that we have passed a significant number of qualifying tests," Rorex said. "It assures donors that they are contributing to a responsible and reputable organization."

Rorex added that the most substantive move made by her organization in response to the Alliance's evaluation was to appoint a board treasurer, which the organization previously did not have. Other than that, changes were minor, she said.

"Our finances were already pretty good," she said. "We didn't have to do too much." Rorex estimated that the organization expended 40 staff-hours in doing the paperwork for certification.

Berns concurred with Taylor that the Institute views its certificate to be complementary to the Alliance's Seal. He also noted that the Alliance's Seal is geared toward national organizations but that the Institute's certificate is aimed at the state level.

"Their standards are a set of minimum standards that organizations should reach," Berns said. "Ours is a higher bar."

Berns added," Their standards relate to fundraising with donors--the real thrust is financial, such as with fundraising, whereas our standards cover a broader subject area, including public policy and program evaluation.

"(The Alliance) is third party, primarily geared toward donors and ours is geared more broadly, to all stakeholders, boards, volunteers and donors."

Berns also said that organizations that have the Alliance's Seal can apply for the Institute's certificate.
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Title Annotation:Maryland Association of Nonprofit Organizations; Standards for Excellence Institute
Author:McNamara, Don
Publication:The Non-profit Times
Geographic Code:1U5MD
Date:Nov 1, 2005
Words:2117
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