Wise Giving Wednesday: Guidelines for Good Governance

Hero image for Wise Giving Wednesday: Guidelines for Good Governance
calendar icon Feb 28, 2024

There are four pillars or themes within the 20 BBB Standards for Charity Accountability: charity governance, results reporting, finances, and fundraising/informational materials. There is a reason that the governance standards are listed first. In many ways, they address the most fundamental and influential aspects of accountability. A charity with a well-run board of directors will have the best chance to succeed and ensure that the organization’s operations are carried out with great integrity and efficiency.

About two years ago, Wise Giving Wednesday featured a series of posts, linked below, that outlined the three essential elements of good governance that are often featured in guidebooks produced by state government regulatory agencies such as the board responsibility book, Right from the Start: Responsibilities of Directors of Not-for-Profit Corporations, produced by the Charities Bureau of the Office of the New York State Attorney General.

  • Duty of loyalty – act in the nonprofit's best interest and disclosing related party transactions that could result in a potential conflict of interest
  • Duty of care – be familiar with the organization's finances and activities and participate regularly in its governance, in "good faith" 
  • Duty of obedience – ensure that the organization complies with applicable laws and regulations, its mission, and its internal governance documents and policies

These are more than just theoretical concepts; they are objectives that all governing board members should take seriously in their deliberations and decision making. The BBB Charity Standards cover these issues within the five standards, which address, among other things, adequate board oversight over the charity’s operations and staff, having at least three meetings with a majority in attendance on average, no more than 10% of the Board being compensated directly or indirectly, and no transactions resulting in material conflicts-of-interest with board or staff member related firms.

From time to time, BBB Wise Giving Alliance unfortunately finds a certain circumstance that can thwart the ability of a charity to have good governance. This is when a charity’s head of staff (whether it be titled CEO, executive director, president, or other name) also serves as the chair of the charity’s governing board. If someone is serving as CEO while simultaneously serving as board chair, that person is essentially in charge of their own oversight. This is a recipe, even with the best of intentions, that can lead to disaster. Also, as these two leadership roles have specific responsibilities that are separate from each other, it is not practical for one person to do them both.

Additional guidance and recommendations on the BBB Charity Standards can be found in the implementation descriptions of the BBB Standards for Charity Accountability.

Heart of Giving Podcast

This week’s Heart of Giving Podcast features Omari Maynard, an artist, activist, educator, and founder of ARIAH Foundation. This organization seeks to support individuals, families, and communities that experience the devastating aftershock associated with maternal/infant morbidity and mortality.

Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

Finally, remember to let us know by going to give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.

Stay Informed. Join Our Mailing List
This site is protected by reCAPTHA and the Google Privacy Policy and Terms of Service apply