July 22, 2004 | Read Time: 2 minutes
A Senate inquiry into legal abuses in the nonprofit field prompted a group that accredits charities in six states to announce last month that it will spread its accreditation program across the country — hoping to help organizations improve their operations and escape expanded government scrutiny.
The Standards for Excellence program, which was started eight years ago by the Maryland Association of Nonprofit Organizations, in Baltimore, invites charities to voluntarily submit to a comprehensive review of their operations and apply for a “seal of excellence” accreditation.
In a discussion document that the Senate Finance Committee released before its hearing last month, it called for a nationwide accreditation program for nonprofit groups and commended the work of the Maryland association. The Finance Committee’s document proposed authorizing $10-million for the Internal Revenue Service to support accreditation of nonprofit organizations.
So far, the Maryland association has accredited 44 Maryland charities, many of which are small groups or local chapters of national organizations, such as United Way of Central Maryland. Groups pay $300 to $3,000, depending on their size, to go through the accreditation process.
The Maryland association also licenses its accreditation program to nonprofit associations in Georgia, Louisiana, North Carolina, Ohio, and Pennsylvania.
55 Standards
Growing interest from nonprofit organizations across the country — driven by increased federal and state scrutiny of charities — helped persuade officials at the Maryland Association of Nonprofit Organizations to introduce what they call the first nationwide set of performance standards that charities of different sizes can adopt.
The Maryland group evaluates charities based on 55 standards, including a mandate that members of an organization’s board of directors must disclose any conflicts of interest they might have, and suggestions about how and when to prepare audited financial statements.
“Where other standards have emphasized rating charities largely on their finances, we focus on giving groups the tools they need to make improvements to their organization’s governance, management, and fiduciary responsibilities,” said Peter V. Berns, chief executive officer of the new Standards for Excellence Institute, in Baltimore.
The institute, which has received about $3-million from Atlantic Philanthropies, the Carnegie Corporation of New York, the Rockefeller Brothers Fund, and the Surdna Foundation over the past three years, will attempt to expand Maryland’s accreditation process across the country by licensing it to other state associations of nonprofit groups and consultants to administer the program in their states.
Paul C. Light, a professor of public policy at New York University and a Brookings Institution fellow, who serves on the board of the new institute, said that the accreditation program offers a “potent tool” for helping nonprofit groups assess their weaknesses and make improvements before Congress decides how it might tighten regulation of charities.
For more information about the institute and its accreditation program, visit http://www.standardsforexcellenceinstitute.org.
