The Independent Sector (www.independentsector.org), a coalition of nonprofits, foundations and corporate giving programs, has issued its revised Principles for Good Governance and Ethical Practices. Importantly, Principle 13 calls for “the full board to evaluate and thoroughly understand (beyond just approving) the compensation of the CEO annually.” A recent article at Give.org notes the importance of adequate pay for talent, while at the same time noting the adverse press coverage that can be generated by compensation for those involved in nonprofit work and the utility of compensation surveys for supporting decisions on compensation. The Give.org articles notes the TED talk by Dan Pallotta about the need for adequate compensation which has generated millions of views.
For continuing updates on this and other important nonprofit compensation news, see our news feed at our web site at http://www.lawrenceassociates.com/NewsFeed.html.
Today’s Boston Globe carried a front page article about the impending retirement of a number of leaders of prominent local non-profits, and pointed out that finding new leadership will be a critical issue in the near future as baby boomers with long years of service in nonprofits retire. In this connection, a recent article in the Non-Profit Quarterly (here) notes the recurring problem of organizations that have to deal with retirement pay for a CEO very close to the retirement date, or even after, where large lump sums can generate resentment on the part of other employees, and run up against IRS limits on pay for services not currently being performed.
For continuing updates on this and other important nonprofit compensation news, see our news feed at our web site at http://www.lawrenceassociates.com/NewsFeed.html.
The Financial Accounting Standards Board (FASB) has issued proposed updates to its standards for financial reports by not-for-profit organizations. These updates have the potential for extensively revising the presentation – and usefulness for stakeholders – of financial reports by NFPs. The revisions are open for comment until August 20, 2015 and a link to the proposed updates is here.
The Government Accountability Office has released a report (linked here) recommending that Congress take action to require more extensive e-filing of tax returns by charities. The report noted that in 2013, an extensive review of tax-exempt organization returns was conducted by the Exempt Organizations division of the IRS, covering, among others, about 1/2 of 501(c)(3) charities. While the IRS can only examine a small portion of such organizations, apparently due to staffing limitations, the GAO noted that increased e-filing, coupled with the additional data provided by the Form 990 as revised in 2008, enables the EO to take advantage of data-mining to more effectively spot issues on returns, thus, at least to some degree, offsetting the decrease in EO staff.
