Institute Overhauls Accreditation Process for Nonprofit Accountability

The Standards for Excellence Institute, which accredits nonprofit organizations for meeting ethics and accountability standards, announced it is expanding its member services and revamping its accreditation process.

The changes come as a recent study suggests that accreditation can make a difference in how much money charities raise. Three university business professors compared 102 fully accredited nonprofits with the same number of unaccredited organizations. The study, released last month, found that the accredited nonprofits raised a median $286,589 in the year they applied for accreditation, and that figure rose to $323,754 during the first year they were accredited. The median donation to the uncertified organizations declined over the same period.

The Baltimore-based Standards for Excellence Institute, which officially started its accreditation program in 2004, announced this month that organizations can now apply online for accreditation.

The institute has also expanded its standards on topics such as fundraising, disaster planning, and relations between executives and board members. With those additions, nonprofits must now meet 67 standards to be accredited. Groups that meet the standards, after participating in a three-year review, earn the right to display a Seal of Excellence throughout their offices and in communications with donors and other constituents.

The institute says it has reviewed and accredited more than 200 nonprofits nationwide.

Fees for membership in the institute start at $250 for groups with annual budgets under $250,000 and go up to $10,000 for those with budgets of $50-million or more. Accreditation reviews cost a minimum of $300 and as much as $9,000.

Reviews leading to accreditation have traditionally been conducted in three steps: The institute does an initial assessment; volunteer consultants, trustees, and other professionals vetted by the institute conduct a peer review; and a team from the institute’s ethics standards committee performs a final review.

Now, however, the institute offers a “tiered recognition” enabling nonprofits to complete each step separately and be recognized for the standards they meet in each one. Nonprofits can choose to stop at the first or second assessment or complete all three. Accreditation and use of the seal are reserved for those who complete the three reviews.

The tiered system of accreditation may be a more palatable path for nonprofits because they can spread out the associated expenses. For nonprofits with a budget under $50,000, for example, membership in the institute costs $125, and the first accreditation review costs another $125.