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Good management principles should guide nonprofits


As I prepare to leave the Mississippi Center for Nonprofits in the next month, I want to offer another column addressing “unfinished business” for the nonprofit sector in Mississippi.

Last time, I highlighted the lack of a consistent sales tax exemption for nonprofits in Mississippi. This time, it is a challenge for the nonprofit sector itself that I want to highlight — the ongoing need to establish standards for accountability and excellence in nonprofit management.

By standards I do not mean that expectations should be the same for a small, all-volunteer neighborhood group and a large nonprofit hospital. Nevertheless, there are certain standards that any nonprofit organization should meet, from good bylaws and Board members who know their responsibilities to proper accounting and receipts for donations.

Several states, including Louisiana, have adopted standards for excellence in nonprofit management which originated in Maryland.

The Mississippi Center for Nonprofits is looking at these standards, too, and I think it would be a good idea to adopt them, as long as there is also awareness of the differences among organizations large and small, urban and rural and serving different constituencies.

There is a message in this for donors, as well. When people contribute to charitable organizations, they wants to be sure that their gifts will make a difference and will be well-used. As we have seen in the business world lately, management and accounting practices do matter, and nonprofit organizations are not exempt from some of the same concerns. Standards for excellence in nonprofit management do not tell donors what causes are most worth supporting, but they do help give some assurance that contributions will be used well for whatever cause is supported.

General support donations to organizations that meet basic standards also help promote accountability and transparency in charitable operations without tying organizations up in a maze of restricted contributions. Too many donors and grant sources say, “show me how you spent my dollars,” and put detailed restrictions on how funds can be used by nonprofits, resulting in accounting games and nightmares, decisions that are not best for the organization or those it serves and much wasted time in detailed grant reports that will probably never be read.

A single good annual report with financial information and service statistics would do much more to promote accountability and meet the needs of donors and the public. Too few donors and grant resources look at the effectiveness and management practices of the whole organization and give flexible, general support to organizations that can show they are doing a good job.

The Mississippi Center for Nonprofits and The Clarion-Ledger did give their first Awards for Excellence in Nonprofit Management this year to three nonprofit organizations: Harbor Houses of Jackson, the Lauren Rogers Museum of Art and the Jackson County Children’s Services Coalition.

The criteria for narrowing the applicants down to these organizations were drawn in part from some of the Maryland standards, though not developed with as much detail. These awards are a step in the right direction, but there is room for much more discussion and work to identify and adopt reasonable standards for all nonprofit organizations in Mississippi.

Good management principles will benefit nonprofit organizations and donors alike.

Nathan Woodliff-Stanley is executive director of the Mississippi Center for Nonprofits in Jackson. He is leaving this position to attend seminary.


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