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Measuring Fundraising Effectiveness—It’s Time to Get it Right

There’s lots of public scrutiny about how much nonprofits spend to raise the money they need to fund their missions and work. But there is more to effective fundraising than low costs—and the obsession with minimizing fundraising costs can actually put our organizations at risk. That’s why BoardSource, along with our partners at GuideStar, BBB Wise Giving Alliance, and the Association of Fundraising Professionals, has released a new framework and calculation for measuring fundraising effectiveness


Five Things Your Board Can Do to Lead with Accountability and Transparency

  1. Review & Share Organizational Financials: Providing financial oversight is one of the board's primary responsibilities, and one that should not be delegated to a small group of board leaders, a committee, or staff. It is critical that each individual board member thoroughly review the financials that are provided to the board and ask questions if there's something he or she doesn't understand.

    If the organization doesn't already do so, board members should encourage the CEO to provide a copy of their audited financial statements and Form 990 on the organization's Web site and on GuideStar, and the full board should review the organization's 990 prior to its being signed.
  2. Conduct an Annual Assessment of Your CEO: The CEO or executive director is the board's one employee, and providing appropriate oversight and management is essential. Conducting a formal, annual review is critical to confirming that the board and CEO are on the same page about the goals and priorities for the next year and ensures that the CEO receives constructive feedback about his or her performance.
  3. Regularly Assess Your Board's Performance: Self-assessment is a critical step in strengthening a board's own performance, and a powerful signal that the board is committed to effective and accountable leadership.
  4. Address Issues Head On: The strength of an organization's leadership is tested by how it handles tough situations. Make sure that your organization demonstrates a commitment to identifying and addressing potential issues.
    • Handle Conflicts of Interest: A commitment to handling conflicts of interests is essential to creating an organizational culture of transparency. Boards should create and follow a policy for identifying and handling conflicts of interest, whether real or perceived. For more on coming to terms with a conflict of interest, download this free resource from BoardSource.
    • Establish a Whistleblower Policy: Make sure that you have a written whistleblower policy, and that all of your employees know how to activate it. After all, this is something your organization must verify on the 990!
  5. Lead with Authenticity: Your board's actions reflect on your organization and its ideals. Here are some important things to consider in terms of authentic board leadership:
    • Give: If your organization raises money in support of your mission, each and every one of your board members should make a personal donation in support of your mission. Read more in this free article from BoardSource.
    • Commit to Diversity & Inclusion: Your board's composition, policies and practices should reflect your organization's ideals as it relates to diversity and inclusivity. Learn more about why this is so important, and what you can do about it, in this free article from BoardSource.

© 2013, BoardSource


The Sarbanes-Oxley Act and Implications for Nonprofit Organizations


A collaboration between BoardSource and INDEPENDENT SECTOR has produced the following report on the effects of the Sarbanes-Oxley Act on nonprofits.

BoardSource and INDEPENDENT SECTOR wish to thank Dan Moore, Vice President for Public Affairs, GuideStar; Tom Hyatt, Principal, Ober Kaler; and Paul Nelson, President, Evangelical Council for Financial Accountability for sharing their professional insights and expertise on this document.
The American Competitiveness and Corporate Accountability Act of 2002, commonly known as the Sarbanes-Oxley Act, was signed into law on July 30, 2002. Passed in response to the corporate and accounting scandals of Enron, Arthur Andersen, and others of 2001 and 2002, the law's purpose is to rebuild public trust in America's corporate sector. The law requires that publicly traded companies adhere to significant new governance standards that increase board members' roles in overseeing financial transactions and auditing procedures.