In This Issue:
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Strategic Planning Isn’t a Document |
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2004 Nonprofit Forecast Features Improving Economy and More Scrutiny |
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Sarbanes-Oxley Corporate Governance Law Includes Provisions for Nonprofits |
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Strategic Planning Isn’t a Document
There are many e-mail discussion lists for nonprofit-sector practitioners, and we subscribe to most of them. It keeps us abreast of trends and developments, as well as helps us keep in contact with diverse professionals across the nation and the world. Every so often, however, our breath is taken away.
One such time happened a couple of weeks ago, when a university administrator was seeking online help for her institution’s strategic planning. The previous strategic plan remained in a drawer from the time it was written, and she didn’t want this to happen again. So, she asked her colleagues to share the formats of their strategic plans! She believed, apparently, that the fault of the plan was in the arrangement of the contents or the formatting of the document.
We replied:
“The magic to using a strategic plan isn't in the format of the document. Most strategic plans are unused because the process used to develop the plan in some way neglects to capture the true nature of the organization and its needs.
“The document is only a by-product of the participation of the players in the process. The essence of successful strategic planning is the demonstrated consensus or "buy-in" based on their active participation in framing the shared vision, mission, and goals of the organization. No document can substitute for those human factors when they're not present, and no document can stop them when they are.
“The other observation I'll make is that the delivery of a final plan document occurs at about the 2/3 point in the strategic planning process. If the planning process ends when the final document is produced, then the document, regardless of how well-crafted, will likely gather dust on that shelf or be condemned to a file cabinet.”
2004 Nonprofit Forecast Features Improving Economy and More Scrutiny
We’ve been dismayed to find a lot of gloom and doom among nonprofit professionals, donors, and the public about the state of charity in the US. Undoubtedly, there have been a lot of scare headlines as well as some, well, curious reporting of charity statistics in the trade press. The good news is that: 1) economically speaking, things generally were never all that bad to begin with; and 2) things are looking up for 2004.
The media are continuing the scrutiny of nonprofits begun in the wake of 9/11, and there have been some notable scandals in the past year. More intriguing is the continued lack of knowledge by both board members and nonprofit executives about the changing regulatory landscape. Sarbanes-Oxley (see article below), IRS Intermediate Sanctions, and the moves toward state-by state charity registration and online compliance filings are recent and developing events that will change (should change) the way nonprofits and their board members do business.
To find out more about what 2004 holds for nonprofits, read our forecast on our web site. NOTE: We’ve left the 2003 forecast, last updated a year ago, on our site, too. You can read it and track the changes in the past year.
Sarbanes-Oxley Corporate Governance Law Includes Provisions for Nonprofits
The Enron, Worldcom, and other corporate scandals of recent years led to the passage of the Sarbanes-Oxley Act of 2002. Along with its protections for shareholders and new requirements for corporate accountability, there are three provisions that apply to nonprofits that supply information to the Federal government (such as Form 990 returns).
Barnaby Zall, a Washington D.C. area attorney specializing in nonprofit law, has identified three areas of Sarbanes-Oxley of concern to nonprofits:
First, nonprofits need to have a comprehensive document management and destruction policy, training for staff on the policy, and records to show that the policy is enforced.
Second, there is “whistleblower” protection for anyone providing information to the Federal government about potential violations of Federal laws by a nonprofit organization – even if the whistleblower is subsequently found to be mistaken. NOTE: penalties for violating whistleblower protection are CRIMINAL, including ten years in jail and commensurate fine. Nonprofits should review employment and other policies to assure that whistleblowers are not retaliated against.
Third, if a charity has a Federal contract subject to government auditing standards, the GAO (General Accounting Office) has issued new “independence” standards modeled after Sarbanes-Oxley. These new GAO standards may affect how your nonprofit performs audits and makes financial reports.
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