Principles of Best Practice
There are many established standards or principles of “best practice” for legal compliance and public disclosure, effective governance, strong financial oversight, and responsible fundraising of charitable, nonprofit organizations. The Independent Sector outlines thirty-three practices that provide a blueprint for organizational accountability and effectiveness in its “Principles for Good Governance and Ethical Practice”.
The Dyson Foundation has identified twelve best practices we believe are core principles. We ask that all applicants for general operating support review this list of principles of best practice. During the application review process, Dyson Foundation program staff will assess the organization’s readiness for a general operating support grant, in part, by comparing the practices of the nonprofit to these principles. We may also request certain materials from applicants, such as copies of specific board meeting minutes or written policies, that relate to these principles.
Legal Compliance and Public Disclosure
- The organization stays informed of and ensures compliance with all relevant federal, state, and regulatory requirements. This includes maintaining a comprehensive conflict of interest policy and meeting state requirements for financial audits and/or reviews.
- The organization provides regularly updated information to the public about the mission, program activities, basic financial data, as well as the current list of names of board members and leadership/management staff, through a website and/or other distribution mechanisms.
Governance
- The organization’s bylaws set forth term limits for the service of the board members and officers, and new members are trained in their roles and responsibilities as board members.
- The nonprofit strives to have a governing board that reflects the diversity of the communities served by the organization.
- The board has no less than five unrelated directors. Seven or more directors are preferable. There are no familial or spousal relationships within or between board members and key staff members.
- The board has a minimum of two officers, president/chairperson and treasurer. The board preferably has four officers, president/chairperson, vice-president/vice-chairperson, treasurer, and secretary.
- Board members receive no compensation for board service other than reimbursement of expenses incurred as a result of board participation.
Finance
- The governing board approves an operating budget prior to the beginning of each fiscal year and receives financial reports at least quarterly.
- A majority of the organization’s annual expenses are for program activity with an appropriate balance for management, general, and fundraising costs.
- The organization does not have persistent or increasing operating deficits.
Program
- The organization periodically reviews its mission to determine whether the mission needs to be modified to reflect community or societal changes, whether programs require revision discontinuation, or if new programs need to be developed to better support the organization’s mission.
- The organization has a written job description for each employee that clearly identifies roles and responsibilities, including for the executive director, whose performance is evaluated routinely by the board of directors through a defined process.