The John Hopkins Nonprofit Listening Post Project released the report "Nonprofit Governance and Accountability," by Lester M Salamon and Stephanie L. Geller, on October 11, 2005. According to the report, key findings of the Project’s survey of a nationwide sample of nonprofit organizations in five key fields (children and family services, elderly housing and services, community and economic development, theaters and museums) included the following:
- Board roles. The boards of overwhelming majorities (85-90 percent) of the nonprofit organizations surveyed are highly or significantly involved in the key strategic oversight functions that nonprofit boards are expected to perform.
- Financial disclosure. the overwhelming majority (97 percent) of sampled organizations have undergone an independent audit within the past two years and comparable proportions (95 percent) regularly distribute their financial reports to their boards.
- Ethics protections. The overwhelming majority of responding organizations also already have other policies and procedures in place to promote accountability and ethical behavior.
- Best-practice standards. Nearly two-thirds or the organizations surveyed already take part in best-practice accreditation programs, and nearly 60 percent of these participate in more than one such program.
- Organizational changes. Nearly one in three organizations (29 percent) reported making some material change in their structure, programs, funding, or mission over the previous two years. Most of these (54 percent) reported notifying the IRS of this change. And those that did not report typically experienced less significant changes (e.g., changes in funding sources).
- Nonprofit awareness. Most nonprofit boards (80 percent) are at least "somewhat knowledgeable" about nonprofit laws at both federal and state levels, and two-thirds reported having discussed the federal Sarbanes-Oxley law. Only 36 percent of the organizations reported having held at least brief board discussions of the Senate Finance Committee staff proposals for increased regulation of nonprofit governance.
It should be noted that the sample was not in any way reflective of the nonprofit sector, consisting of 207 "Affiliated Organizations" and only 40 "Unaffiliated Organizations." Affiliated Organizations are respondents from a panel of 443 organizations self-selected from the membership of five nonprofit umbrella associations that are part of the Project’s Steering Committee (the Alliance for Children and Families, the American Association of Museums, the American Association of Homes and Services for the Aging, the National Congress for Community Economic Development and the Theatre Communications Group). Unaffiliated Organizations are respondents from a panel of 162 unaffiliated organizations in similar fields randomly selected by the Project from the IRS’s Exempt Organization Master File.
Despite the limitations of the survey, the authors’ conclusions are well taken: "The presumed problems with the management and accountability of nonprofit organizations have been significantly exaggerated … [, and] legislative fixes premised on worst-case scenarios should therefore be approached with considerable caution."
Click here for the full report.
Click here for more information about the Listening Post Project.