Practice Ideas for Principle 08: Transparency & Accountability

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Understand: Transparency builds trust and strengthens our accountability to the community. By being transparent, we are accountable to our mission, values and goals.

  1. We understand that laws offer the floor of public accountability – not the ceiling. We set our own transparency guidelines to align with our values and with public expectations.
  2. We have taken steps to ensure that our board members are aware of, fully understand and fulfill their duties of accountability, as outlined by the Minnesota Attorney General, the IRS, and other accreditation or oversight bodies that may apply to our industry or organization.
  3. We understand that transparency spans various media: in-person conversations, interpersonal communications, social media and internet, government filings and more. We are consistent in our transparency across communications platforms and in alignment with our mission and goals.

Begin: We exhibit transparency by being clear, consistent and timely in our communications, decisions and commitments. We share information publicly in order to meet regulatory requirements and uphold community expectations, in the context of our missions. We demonstrate accountability by learning from community feedback and critique.

We conduct all required reporting to government agencies:

  1. When we were formed, we registered and filed required documentation for our organization as a nonprofit corporation, charitable trust, or other form of corporate entity with appropriate state offices, as applicable.
  2. If we are registered with the Secretary of State, we maintain and renew that status on an annual basis.
  3. If we conduct our activities or programming under an assumed name, we have registered that assumed name with the Secretary of State for full transparency.
  4. We annually file required tax forms which provide public disclosure of the operations and activities of our foundation, including but not limited to filing our IRS Form 990 or 990-PF with the IRS and Minnesota Attorney General.
  5. We complete our 990 or 990-PF annually and file it with the appropriate federal and state regulators, as required by law.
  6. We register and annually file a report with the Minnesota Attorney General if we solicit charitable contributions in the state, or hold funds in trust for a charitable purpose, unless we fall within an exception under state law.
  7. We periodically consider whether we are required to register with the state agency overseeing charitable assets in other states in which we conduct activities or solicit charitable contributions.
  8. We comply with all federal, state, and local licensing and regulatory requirements that apply to our organization.

We share information with our stakeholders:

  1. We provide copies of our annual tax return (IRS Form 990 or 990-PF) and tax-exemption application (IRS Form 1023) (if available) to anyone who requests them either in person (on a same day basis) or in writing (within 30 days of the request), or we make our IRS Form 990 or 990-PF available free on our website as exact images of the originals.
  2. If we are audited, we make available to the public, upon request and/or in published annual reports or on our website, our audit statement or auditor-approved summary of the audit findings.
  3. We share information about our grants awarded and, as possible, the names of nonprofit grantee partners.
  4. If we accept unsolicited grant proposals: We make readily available a full and clear description of our grantmaking guidelines and application process through our IRS Form 990 or 990-PF, grantmaker directory entries, annual report, website, brochures, newsletters and/or other communications vehicles, as appropriate.
  5. If we do not accept unsolicited grant proposals: We clearly indicate this in our grantmaker directory entries and/or other appropriate communications vehicles, such as our annual report or website.
  6. We publicly share names of our key staff and trustees. We provide staff and trustees with the skills and knowledge to be transparent in their communication with the public.
  7. We are committed to making information readily available about our finances, operations, governance and impact through our annual report, website and/or other communications vehicles, as appropriate.

We set a high standard of communicating with nonprofit grantee partners and grant applicants:

  1. We follow up with grantee partner communications in a timely manner and we set parallel expectations about incoming and outgoing communications.
  2. If we accept unsolicited grant proposals: We follow up in a timely manner with all applicants to tell them the final status of their application.
  3. If we do not accept unsolicited grant proposals: We offer a way for nonprofits to contact us.
  4. We provide opportunities for grant applicants and others to contact us. When possible, we publicly share a phone number and email address for key contacts.

We establish policies to promote transparency:

  1. We have adopted a whistleblower policy to encourage good-faith reporting of any suspected violation of law, policy or practice. The policy ensures a process of action by the organization and protects  the reporting individual from retaliatory action.
  2. If we have a non-discrimination policy: We make it available to grant applicants and the public.
  3. If we manage donor advised funds: We publicly share any policies about funding limitations such as exclusion of hate groups, anti-democracy groups or other limited activities.
  4. We follow national guidance for our organizational type such as standards for community foundations (including DAF inactivity standards), corporate benchmarking, or family foundation basic rules.
  5. We create an organizational culture that encourages transparency and trust among staff and between the staff, board and community.
  6. We do not limit staff members’ ability to share their own salary details with others.
  7. We explain to partners and stakeholders our data use, document retention and privacy policies. We only gather data we need. We honor individuals’ requests related to privacy and anonymity.

Aspire: We consider state and federal regulatory requirements to be the minimum standard of transparency. We excel at transparency and accountability by engaging the community in decision-making and external evaluation of our work.

In our decision-making, we default toward more, not less, transparency:

  1. Transparency reflects our integrity and ethics. Non-transparency is easy; transparency requires effort.
  2. We start every transparency conversation with the question, “Are there good reasons why we wouldn’t share this publicly?” We consider transparency to be one aspect of ceding power whereas we consider undo privacy to be power hoarding.
  3. We publicly share most decisions and processes. We also share why/when we are unable to be transparent.

We are accountable to the community by using charitable dollars for high community impact:

  1. We engage in community-led grantmaking and participatory grantmaking.
  2. If we manage donor advised funds: We publicly share information about grantmaking such as total grants distributed, nonprofits funded, and total assets held.
  3. If we are a private foundation, we choose to count only grants and program-related investments as “qualifying distributions” toward our 5% minimum distribution requirement.  We do not count family member expenses, business/corporate expenses, or other allowable expenses which are permitted by law to count toward our 5% payout but that do not benefit the community.

Transparency includes listening to feedback and sharing lessons learned:

  1. We use external feedback in a cycle of continuous learning.
  2. As we advance in our transparency journey, we offer our story as a role model for other philanthropic organizations.
  3. We engage our philanthropic peers in evaluating our work. We seek peer feedback about our goals and priorities.