Carnegie
Corporation
of New York

Fall 2005

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MOVING AHEAD

Despite the uncertainties surrounding its Standards program, Maryland Nonprofits has forged ahead admirably since receiving its Carnegie Corporation renewal grant. In June 2004, the organization officially launched the Standards for Excellence Institute to significant fanfare. The opening generated a wave of favorable news coverage for the initiative, with stories in the Washington Post, Chronicle of Philanthropy, Business Week, Baltimore Sun, and Wall Street Journal.

While Standards for Excellence is not yet close to becoming the national standard on nonprofit accountability issues, the program has earned a prominent niche in the national debate. In June 2004, when the U.S. Senate Finance Committee issued a discussion draft outlining ambitious proposals to tighten oversight and increase accountability in the tax-exempt sector, the text specifically highlighted the Standards efforts as worthy of replication (and perhaps even federal funding). A month later, Maryland Nonprofits director Peter Berns was invited to participate in a roundtable discussion of the proposed rules. Berns also serves on a nonprofit oversight and self-regulation panel convened by Independent Sector, at the Senate Finance Committee’s request, and in May 2005 he was asked to submit comments to the House Ways and Means Committee, which is also examining nonprofit sector accountability issues.

Programmatically, the replication drive is proceeding gradually, but steadily. Maryland Nonprofits has signed up two additional replication partners—the Idaho Center for Nonprofits, and the Giving Trust (in Illinois). The Institute began offering a national certification option, meaning that any nonprofit in the nation may now apply for the Standards seal, and it also announced a new training program for consultants to help organizations implement the Standards and apply for certification. And Maryland Nonprofits is pursuing discussions with a variety of other potential partners as well. “It’s percolating around the country in a variety of interesting ways,” Berns says. “We’re trying to be flexible.”

The Standards for Excellence in Action

Like Leslie Ostrander at the Kidney Foundation of Greater Cincinnati, other nonprofit leaders also report that participating in the Standards initiative has been a boon to their organizations:

At the North Carolina Conservation Network, a six-year-old membership organization that works with 120 local conservation groups in that state, the Standards for Excellence program has been a key tool in helping the organization mature from a brand-new start up to an established agency. “The Standards really gave us a road map showing us where we were as an organization and what we still needed to do,” says executive director Brian Buzby. The standards around fundraising were especially valuable, Buzby says, as the agency began soliciting individual donors after depending initially on foundation grants for most of its budget.

At Contact Helpline, a 24-hour-per-day telephone support line serving the Harrisburg, Pennsylvania area, Standards for Excellence training has helped educate board members and clarify the role played by the board. “We needed to make sure the board is doing what they’re supposed to be doing legally for the organization and know what their fiduciary responsibilities are,” says executive director Kelly Gollick, who attended the first of four monthly training sessions in November 2004. The training also prompted Contact Helpline to adopt its first-ever conflict-of-interest policy. “If we’re going to buy computers, we have people from IBM on our board, so we need to make sure it’s all done on the up-and-up,” Gollick says. The binder of Standards materials distributed at the training has been “very helpful,” Gollick adds. “We don’t have to reinvent the wheel, so it’s not nearly as labor-intensive as it would be.”

In Lousiana, both Kingsley House, a 109-year-old multi-service organization with 135 employees in New Orleans, and Friends of Families of Southwest Louisiana, a six year-old mentoring project staffed primarily by volunteers, went through training and earned the Standards Seal of Excellence in 2004. “Most of the things we already had in place,” says Kingsley House executive director, Keith Liederman. “But it took us to another level. One of the things the Louisiana Association of Nonprofit Organizations requires is that every member of the staff and the board understand the Standards. So we’ve made it part of our orientation process, and it’s helping us communicate these ideas to our staff.” Margaret Johnson, the founder and only full-time paid employee at Friends of Families, reports that “The process was very difficult—just compiling all the information and putting it in the order they requested.” But Johnson says that the certification “gives us credibility. When I go to individuals to ask for money, when I go to churches or to foundations, people feel confident that their money will be managed well. It gives us an edge.”

Maryland Nonprofits has also made progress toward achieving its financial goals for the replication program. Earned income (licensing fees, training stipends and publications) grew from $9,000 in the 2002 budget year to $140,000 in 2005, with $207,000 projected for 2006. In addition, in July 2005, Maryland Nonprofits received approval for a $500,000 grant from the Ford Foundation to support work on the Standards over the next two years.

Meanwhile, all five of the original replication partners continue their work on the Standards. Due to a redesign of its data collection system, Maryland Nonprofits did not have precise, up-to-date data on program activities in the replication states as of August 2005. But Berns estimated that during the program year ending in September 2004, 15,000 nonprofits in the five replications received copies of the Standards codes, 4,600 organizations had board or staff members attend Standards-related workshops and 10,500 organizations requested either information about the Standards or assistance in implementing specific standards.

Though the Standards program remains years from its ultimate goal—to become a national benchmark—these interim outcomes are music to the ears of Cynthia Gibson, the former program officer who recommended the first Corporation grant for the Standards of Excellence. She says, “This is a sector that’s been around for a very long time but has never done anything like this. When this came along ten years ago, it was just groundbreaking. The progress they’ve made in the five states has been just incredible.”

Vincent Stehle, Program Officer for Nonprofit Sector Support at the Surdna Foundation, doesn’t believe that the program will ever stand alone as a national standard. But he does think that when you combine the Standards with other initiatives like Guidestar and the Wise Giving Alliance, “It adds up to a big impact. We’re way ahead of where we were a decade ago.”

Ultimately, that impact is measured in changes to individual nonprofits like Leslie Ostrander’s Kidney Foundation of Greater Cincinnati. In the spring of 2005, Ostrander signed up her organization for a second round of Standards for Excellence training. “Our financial checks and balances are in place now,” she says, “but I really want to get them in writing and make sure they’re up-to-date and approved by our board.”

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