Carnegie
Corporation
of New York
Fall 2005
Among the growing gaggle of ethics and accountability initiatives, the
Standards for Excellence stood out in several ways. Rather than setting
a minimum level of acceptable behavior and performance for nonprofits,
the Standards offered a template for excellence in nonprofit management.
And far more than any other ethics and accountability initiative, the
Standards erected elaborate mechanisms—through its outreach activities,
educational materials, and training programs—to engage nonprofit
leaders, encourage them and assist them in reaching for excellence.
Many of the charity watchdog groups rely heavily on data from nonprofits’ tax returns. But with very limited IRS oversight of nonprofits in recent years, these forms are often fraught with errors and omissions. Also, charity watchdogs typically award their highest ratings to organizations spending the least on administration and overhead. As a result, says Berns, “They discourage leaders from spending on the infrastructure of their organizations or pursuing the management practices and good governance demanded by the Standards.”
Paul Nelson, who oversees a highly regarded certification program for evangelical organizations, warned in the Chronicle of Philanthropy, “For all the enlightenment that financial information provides, it does nothing to help a donor understand how well a nonprofit is organized…It doesn’t reveal anything about how the group’s board functions, whether it has internal conflicts of interest, or how responsible the group’s fundraising habits are.”
On the other hand, close observers also see gaps and weaknesses in the Standards for Excellence approach. Art Taylor, who directs the Wise Giving Alliance and also serves on the national Standards for Excellence board, says that the program is providing a valuable service to nonprofit organizations. “But it’s about organizational improvement; it’s not about accountability, because they don’t report organizations who don’t meet those standards.” Peter Shiras, a senior vice president of Independent Sector, a leading nonprofit sector trade association, says “The Standards program was really designed for excellence, not for meeting minimal norms of accountability.” Indeed, project evaluators Bailis and Sokatch find that the Standards program “seems to have its greatest impacts…on nonprofit organizations that are predisposed to want to learn more about them and hence improve the organization…It may well be that those nonprofit organizations that are most out of line with the Standards and most likely to cause negative publicity would be the least likely to make the changes that would lead to their adoption.”
According to several observers, the weakest link in the Standards approach may be the low number of organizations certified. “No matter how hard I try to explain that the Standards for Excellence is an ethics and accountability leadership program, I think people are always going to judge it by how many organizations have been certified,” complains Rick Moyers. “And if that’s how people look at it, the program is always going to be viewed as a failure.” Peter Shiras says, “The Standards program is making an important contribution to the field, but the thing that will stick in everyone’s mind, once you’ve set up these standards, is how many groups have met them?”
Another obstacle to making the Standards for Excellence a “national standard” is the perception that the program is rigid and difficult to implement. Audrey Alvarado, executive director of the National Council of Nonprofit Associations, the membership group for state associations like Maryland Nonprofits and its replication partners, has seen the value of the Standards. “Many nonprofits are more willing to adjust their practices if you provide them this kind of help,” she says. But Alvarado also says her membership is not willing to adapt the program as a national standard. “There’s been some push-back,” she says. “It’s an awfully expensive proposition to sustain this over time.” She adds, “It becomes an identity issue for the state associations. Does participating in Standards for Excellence come at the expense of other things the state associations are called on to do?”