Nonprofit Connectors

Sarbanes-Oxley Act 2002

The Sarbanes-Oxley Act was enacted in 2002 in response to scandals involving several public corporations such as: Enron, Tyco International, and WorldCom just to name a few. The reason why this is important to your nonprofit is that it is a public company, and is therefore subjected to the regulations within the Sarbanes-Oxley Act.

Now, I’m neither a lawyer nor accountant, so this blog post is in no way giving you advice. However, my intention is to expose you to websites that will assist you in increasing your understanding of this Act. Thus, I think it is always best to start at the beginning, and here is the full Act. Then next I would just visit a few blogs to see what people are saying.

Happy reading!

Directors & Officers Insurance

Directors & Officers Insurance (commonly referred to as D&O insurance), is often overlooked by nonprofits for the simple reason they are uncertain whether or not they really need D&O coverage. Read this article noting compelling reasons to protect your organization. This should reassure you that D&O insurance has significant value to even the smallest nonprofit organization.

When a person becomes a board member, she assumes a level of responsibility for the organization and thus exposes herself to claims for not managing the organization properly. Even if the case brought against a board is thrown out, the organization still bears the brunt of having to pay the legal fees. Legal expenses could be brutal for a small organization and could even put them right out of business.
In general, D&O insurance includes coverage of an officer or director in the discharge of his/her duties. This includes but is not limited to:

• Any actual or alleged act
• Misstatement or misleading statement,
• Neglect or breach of duty
• Omission and/or error

As with all insurance policies, read the policy carefully to ensure it includes all the necessary components for your organization. Here is a checklist of issues to review when looking to purchase D&O insurance.

Key strategies for implementing new ideas

Brainstorming new ideas may be your passion; implementing new ideas on the other hand may be where projects breakdown. When bringing your key leaders together your organization can gain passion and purpose in utilizing true collaboration.

Here are a few key strategies to assist you in seeing those well-dreamt projects through to fruition.

• Include your entire team in gathering ideas. You never know where a great idea may come from, and it could very well be the part-time volunteer that comes up with the next best thing.
• Check with the community that you serve to see if anyone has a suggestion for how your organization can improve its current services, or implement something new. A suggestion box is a great way to gather ideas from community members.
• Surveys are effective in helping organizations gauge the successfulness of a program. We recommend surveys that also gauge the interest of the community and staff members. This sort of questionnaire will assist your organization in not only considering what new ideas to try, but will also tell you what current programs are working well.

Remember to include everyone; it helps to grow a stronger organization if you get the buy-in from as many people as possible. In addition, it is very important to make sure that whatever new ideas you implement fit with the organization’s mission statement and strategic plan.

Check out the organizational assessment tool offered free through The Hartford Foundation’s Nonprofit Support Program.