Panel on the Nonprofit Sector Requests Comments on Self-Regulation

The principles were developed by the Panel's Advisory Committee on Self-Regulation of the Charitable Sector, comprised of 34 leaders from charities, foundations, and academic institutions, and chaired by Joel L. Fleishman, director of the Samuel & Ronnie Heyman Center for Ethics, Public Policy, and the Professions at Duke University, and Rebecca W. Rimel, president and CEO of The Pew Charitable Trusts.

The Advisory Committee examined the standards and principles established by over 50 self-regulation and accreditation systems that monitor different types of charitable organizations to develop a set of 29 principles of effective practice for charitable organizations. The Committee recommends that all charitable organizations aspire to follow these principles and that all major organizations (public charities with at least $1 million in annual revenues and private foundations with at least $25 million in assets) should implement these practices.

Available for review and comment through the Panel's website at http://www.nonprofitpanel.org/selfreg/index_html, the principles are arranged in four categories:

• Facilitating Legal Compliance -- responsibilities and practices, such as implementing conflict of interest and whistleblower policies, that will assist charitable organizations in complying with their legal obligations.

• Effective Governance -- policies and procedures a board of directors should implement to fulfill its oversight and governance responsibilities effectively.

• Strong Financial Oversight -- policies and procedures an organization should follow to ensure wise stewardship of charitable resources.

• Responsible Fundraising -- policies and procedures organizations that solicit funds from the public should follow to build donor support and confidence.

"Hand in hand with government enforcement of a strong framework of laws and regulations, the nonprofit community has a responsibility and opportunity to regulate itself," said Diana Aviv, executive director of the Panel on the Nonprofit Sector and president and CEO of Independent Sector. "The Panel and the Advisory Committee urge charities and foundations to review the proposed principles and share their feedback. We look forward to hearing from the many voices in the field that have a strong commitment to improving practice in the nonprofit community."

The Committee is also considering a variety of options for strengthening and expanding existing systems of self-regulation and accreditation to provide a more powerful mechanism for educating charitable organizations about principles for effective practice and for building the confidence of donors and the public that charitable organizations adhere to high standards of governance, transparency, and accountability. The Panel will share those recommendations for public comment in the coming weeks before issuing its final report in late Spring, 2007.

Since the fall of 2004, the Panel on the Nonprofit Sector has brought together thousands of people committed to ensuring that charities and foundations maintain the highest possible standards of ethics and accountability. Convened at the encouragement of the leaders of the U.S. Senate Finance Committee, the Panel has demonstrated the nonprofit community's continuing commitment to operating accountably and transparently. Its Final and Supplemental Reports detailed more than 150 recommendations for action by Congress, the Internal Revenue Service, and the charitable community to strengthen the transparency, governance and accountability of charitable organizations. Many of the Panel's recommendations helped to shape nonprofit reforms included in the Pension Protection Act enacted in August 2006.