On November 12, 2020, we welcomed our community to a virtual networking breakfast. We also featured a special presentation from Luana Lewis, Senior Vice President, Programs & Services for BBB Serving Metro New York and its Foundation.
See below for member Michael Lucivero’s recap… in case you missed it.
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How can the work of the Better Business Bureau® (BBB) help nonprofit consultants to advise their clients on best practices for fulfilling their organization’s mission?
The Association of Nonprofit Specialists hosted a virtual event on November 12th for participants to hear insights from Luana K. Lewis, Senior Vice President, Programs & Services for BBB Serving Metro New York and its Foundation. The program included a chance for participants to network in small group discussions before Ms. Lewis discussed some of the BBB’s Standards for Charity Accountability, sharing the top six most missed practices and offering insights into how nonprofit consultants can utilize the standards when advising clients.
Top Six Standards
Ms. Lewis explained that the BBB Wise Giving Alliance has established 20 BBB Standards for Charity Accountability, which are valid for BBB evaluation and reporting on charities across North America. Using these standards and related guidelines, Metro NY BBB Foundation evaluates nonprofits with publicly solicited donations of $250,000 or greater, but will also evaluate smaller nonprofits upon request, as feasible.
Meeting BBB’s standards can help to achieve more effective mission fulfillment and encourage donor confidence. Ms. Lewis noted that each standard has particular resonance for nonprofits operating during the COVID-19 pandemic.
Standard 6 and 7: “Evaluate and adjust mission delivery every two years, as a board policy.”
The first two standards discussed (6 and 7) are concerned with assessing the effectiveness of the nonprofit’s efforts to deliver its mission, and developing strategies to increase mission impact.
Standard 6 is the most-missed standard. It requires that nonprofits establish a board-approved policy that commits the organization to evaluating mission effectiveness every two years, and determining future actions needed to carry out the mission. Such a policy should ensure that the nonprofit:
• Clearly identifies and measures mission-related goals and objectives;
• Has a process to evaluate the success or impact of their program(s);
• Conducts a mission evaluation and develops recommendations to improve future mission performance at least once every two years.
Ms. Lewis observed that Standard 6 is often the most missed standard due to misunderstanding about what is needed, as well as a reluctance by some senior nonprofit executives to ask their boards for approval of such a policy. When the board does not conduct mission evaluations on a regular basis, this can be costly during a crisis. If the mission is poorly defined, activities do not advance the mission, and the proper processes to evaluate the organization’s effectiveness are lacking, it can become difficult for board members and senior nonprofit staff to make difficult choices that will advance the mission during tough times. As a coaching point: any board-approved written document which meets the mission evaluation criteria noted above can serve to meet Standard 6. Examples might include board minutes or by-laws, so long as it is understood that the document captures a policy decision made by the board.
How can consultants use this standard to guide clients during the COVID-19 pandemic? Ms. Lewis suggested that due to the constraints created by the pandemic, nonprofits can benefit if they evaluate their activities and refocus them on the core mission to conserve scarce resources and maximize mission impact during the crisis.
Standard 7 requires that a nonprofit furnish a written report to its board for review and approval, which evaluates how effectively the nonprofit achieves its mission. The report should include:
• An effectiveness assessment measured against mission goals;
• Recommendations for future actions based on the assessment.
Metro NY BBB Foundation coaches organizations to include the evaluation of mission-related activities in the organization’s strategic plan, so that it becomes a standard part of planning practice. If strategic plans are made for periods longer than two years, then the recommended practice to meet Standard 7 is to do a written evaluation of progress at the two-year point. She cited the COVID-19 crisis as an example of a time when nonprofits need to document how effectively they are achieving their missions and making adjustments based on specific data. This can help build a nonprofit’s fundraising case.
Standards 16 and 17: “Don’t make folks scramble to find information about you.”
Two often-missed BBB standards for disclosure (16 and 17) relate to how nonprofits share information with the public.
Standard 16 requires nonprofits to produce an annual report. Ms. Lewis explained that nonprofits can fulfill the requirement by producing an annual report which includes:
• The nonprofit’s mission statement;
• A summary of program results from the prior year;
• A roster of officers and board members;
• A financial summary, showing total income for the prior year, expense totals broken out into program, administrative and fundraising categories, and ending net assets.
This report does not need to be called an annual report. However, it should be available as a printable document that can be mailed upon donor request. Even now, many older donors lack internet access and may need to see a written report.
BBB Foundation of Metro New York advises nonprofits that the “annual report” can be something as simple as printed or web-based document containing the required information. A labeled link to the nonprofit’s 990 can also be used, so long as the 990 contains the annual report elements shown above. The coaching point is to be sure that your nonprofit’s 990 always contains the same elements as an annual report, because it may well be viewed in that light by funders and donors.
Standard 17 pertains to disclosures needed when nonprofits solicit donations on their websites. The standard requires that if a nonprofit’s website solicits donations, it must include the organization’s:
• Annual report, or a document containing comparable information;
• Relevant contact information, including its snail mail address;
• A link to the nonprofit’s 990 form, or a downloadable version of the 990.
Standards 14 and 3: “You need to be able to guide your organization adequately.”
The final two standards discussed in this program (14 and 3) relate to a nonprofit board’s fiduciary responsibilities.
Standard 14 requires nonprofits to have a board-approved budget that identifies and breaks out program, fundraising and administration costs in expense categories.
Whether in normal operating conditions or during a crisis like the COVID-19 pandemic, Ms. Lewis stated, a functionally-allocated budget is an essential tool to adequately guide the organization. During COVID-19 times, it is especially urgent for the board to have regular information about budget performance and to understand how funds are being spent. A functionally allocated budget can help the board and senior management to plan effectively and adjust quickly to rapidly changing situations.
Standard 3 requires that a nonprofit hold at least three evenly-spaced board meetings per year, with a majority of the board in attendance. BBB requires that two meetings are “face-to-face” and one can be a conference call by phone.
Ms. Lewis explained that BBB will consider the meetings as “face-to-face” if they are conducted through online video platforms like Zoom, Skype, and others—as long as all board members can see each other, hear each other and have the ability to share documents. The coaching point here is that participating board members should turn on their computer cameras so that they can be seen as well as heard.
Ms. Lewis concluded with a summary of the top 10 most missed standards, noting that BBB Foundation of Metro New York staff will coach any nonprofit about how to meet all of the BBB Standards for Charity Accountability. Additional information and a complete coaching video about the standards is available through their website landing page for the Metro NY BBB Charity Accountability Program, located at ny.give.org.
ABOUT MICHAEL LUCIVERO
Michael Lucivero is a nonprofit management professional who founded Lucivero Consulting LLC in 2018. He has 20 years of experience in the nonprofit sector specializing in program management, design and evaluation for improved outcomes. He has directed the design, management and evaluation of education programs on U.S. foreign policy and global affairs that served communities, high school educators and college and high school students across the United States.
Michael started Lucivero Consulting LLC to provide strategic planning and capacity-building services to nonprofits and public service-oriented companies. Among the strongest assets that he brings to his work is the ability to help clients clarify their needs and develop effective strategies to improve program delivery. In addition, he assists clients by creating materials and resources needed to enhance program outreach and implementation.
Lucivero Consulting LLC
www.luciveroconsulting.com
info@luciveroconsulting.com
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