Bridgestar's "Community Event" Assembles Nonprofit Leaders to Discuss the Need for Public Accountability, Private Responsibility; Speech by Independent Sector's Diana Aviv Addresses Challenges, Provides Checklist for Setting Standards in Nonprofit Sector

Boston, MA July 8, 2004 -- Approximately 100 Boston-area leaders of nonprofit organizations gathered recently to hear Diana Aviv, president and CEO of Independent Sector, address the need for greater accountability and transparency of nonprofit organizations at an event hosted by Bridgestar, a nonprofit organization building a peer network of senior nonprofit leaders. The event, entitled "Nonprofit Accountability: Inside and Out," discussed public accountability, private responsibility, and the challenges in establishing a set of standards for the nonprofit sector.

Highlights
Saying that nonprofit organizations reflect civilized society's needs and aspirations, Aviv noted that nonprofits need the public trust to achieve their goals. Public trust in nonprofits is an important issue at a time when allegations of misconduct have generated more than 225 stories recently – enough that Congress has recently convened hearings on the matter.

"Many of the allegations of misconduct include excessive executive compensation, inappropriate board compensation, self-dealing, questionable fund-raising practices, and other governance improprieties that have allowed the public to have a perception that the sector is corrupt, that the abuse is widespread, and that we have serious problems even though it's a very small section of our sector that is engaged in these kinds of practices," Aviv noted. "These kinds of problems have a domino effect on our ability to do our work because the bad actors will sully our reputations. We have a responsibility to be each other's keepers, to set the tone throughout the sector, to establish a code of ethics, and to educate boards and staffs to ensure that organizations meet the highest possible standards of ethical practice. We need greater transparency so that donors, members of the public and lawmakers understand how we operate and how our moneys are being spent to achieve our missions. We have a responsibility to think about what practices we want to change ourselves and what makes sense for the public sector to do."

Aviv listed several ways nonprofit leaders could improve accountability.
•    Use clearer, more detailed language on 990 and 990PF information returns.
•    Post information returns and annual reports on publicly available websites.
•    Improve self-regulation by establishing and posting a code of ethics.
•    Educate board members and staff members alike of their responsibilities and on good governance.
•    Enlist the public's support to fully fund Federal and state oversight functions.
•    Raise awareness of the sector's good works and serve as advocates for the sector.

Aviv also noted that establishing a single standard of ethics and compliance for nonprofit organizations will be difficult due to the diversity in terms of mission, size and budgets of a sector comprised of more than 1.4 million nonprofit organizations that file tax returns and probably double that number when all are taken into account. This number represents a 100 percent increase over the 739,000 organizations just 25 years ago, with 90,000 new organizations registering each year.

Independent Sector has released a model code of ethics, along with information and resources, available at www.independentsector.org/issues/accountability.html.

Bridgestar community events
Aviv's talk was part of a key Bridgestar initiative to generate and share knowledge with others in the sector.

"Our events are designed to address timely and important issues for nonprofit leaders," said David Simms, Managing Partner, Bridgestar. "Diana's insightful presentation was followed by breakout sessions in which attendees further discussed the implications of greater accountability for their organizations and the sector as a whole. This sharing of perspective and concerns is an important part of Bridgestar's mission."

Bridgestar believes that to achieve their full potential, nonprofit organizations must nurture and retain effective senior leadership. This leadership – the building of an organization's capability to meet its goals – can typically spell the difference between ultimate success and failure. At its essence, this challenge is about people, the commitment and capability of individual leaders.

About Bridgestar
Bridgestar (www.bridgestar.org), an initiative of the Bridgespan Group, is a nonprofit organization building a member-driven community of individuals and organizations working to strengthen their careers, their institutions, and the nonprofit sector. Established in 2003, Bridgestar's goal is help nonprofits attract, assemble and nurture strong leadership teams to increase the overall performance of the sector, leading to greater effectiveness and social impact.

About Independent Sector
Independent Sector (www.independentsector.org) is a nonprofit, nonpartisan coalition of approximately 600 national organizations, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation. Its mission is to promote, strengthen, and advance the nonprofit and philanthropic community to foster private initiative for the public good.





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