We are delighted to share with you these principles for good governance and ethical practice, which are designed to guide board members and staff leaders of every charitable organization as they work to improve their own operations. The Panel on the Nonprofit Sector has been dedicated to finding ways to strengthen governance, transparency, and ethical standards within the charitable community since its creation in October 2004 at the encouragement of the U.S. Senate Finance Committee.
Over the last three years, we have brought together thousands of people involved with charities and foundations to develop and refine recommendations to Congress, the Internal Revenue Service, and our own community that would achieve those goals. The Panel issued its first report to Congress and the nonprofit sector in June 2005, and a supplement to that report in April 2006. Together, those reports offered over 150 recommendations for actions that Congress and the Internal Revenue Service should take to improve the laws, as well as education and enforcement efforts to prevent unscrupulous individuals from abusing charitable resources for personal gain. It also outlined actions that we in the charitable community needed to take to improve our own practices. Many of those recommendations have been enacted into law through the Pension Protection Act of 2006, and we continue to work with Congress and the IRS to make improvements in the regulatory framework under which charitable organizations operate.
We know that government action cannot—and should not—replace strong, effective governance of
individual organizations and constant vigilance by our own community. The Panel has spent the past
eighteen months working with an outstanding advisory committee led by Rebecca Rimel, President,
Pew Charitable Trusts, and Joel Fleishman, Director, Philanthropic Foundations Research Program,
Terry Sanford Institute of Public Policy, Duke University, to examine how we might advance the state of governance and self-regulation throughout our community. It further invited public comment from the charitable community. The result is the 33 principles presented here.
We encourage the board and staff leaders of every charitable organization to examine these principles carefully and determine how best they should be applied to their own operations. Many organizations will find that they already follow—or go beyond—these principles. Others may wish to make changes in their current practices over time, and some may conclude that certain practices do not apply to their operations. We hope these principles will help our organizations as we continue to reach for the highest standards of governance and ethical practice that the communities we serve expect and deserve.