Principle 19: Mission Critical

Keeping it Ethical is our weekly blog series highlighting the 33 Principles for Good Governance and Ethical Practice. Throughout the series, we hope to highlight the importance of each Principle, the helpful resources associated with it, and learn more from you about how you’ve incorporated these Principles into your charitable organization.

A nonprofit organization encapsulates its purpose and direction with one golden nugget, its mission statement. Your mission is the north star in guiding purpose, dictating goals, and ultimately impacting where your organization is allocating resources. Clear articulation and evaluation of this north star allows your organization to assess which activities remain mission critical.

Nonprofit organizations are unique in that we’re not in service to generate profit or gain for individuals or companies. We’re accountable to the public thus it’s vital our mission and goals remain relevant. Your board is responsible for reviewing the organization’s mission and goals frequently and should evaluate the progress of the organization against these components consistently.

We are not talking about the run of the mill board meetings and discussions of activities and updates. The guidance here is more distinct. The board should undertake a thorough evaluation of progress on goals, activities, and outcomes to ensure they are in service of the board approved mission.

Per usual, due to the vast differences between organizational size and purpose,  each organization needs to find the right frequency of evaluation. Not all organizations have goals that are readily measurable, in fact, many nonprofits undertake challenges without an exact solution. These organizations should put into place other benchmarks for tracking related indicators allowing them to track if their work is or is not servicing their intended mission. There are other guiding principles that will support the review of your mission such as evaluation of governing documents, annual evaluations, and information you readily disclose.

There are some fabulous technical tools out there to help you think through the efficacy of your current mission statement and goals.

Finally, there is one topic we’d be remiss not to mention. Principle 19 provides a timely reminder to consistently weigh the benefits of a new business or earned income opportunity against your organization’s mission and goals. When you take on an activity that is not related to your organization’s mission it may be subject to an unrelated business income tax (UBIT). Depending on the scale of a new business opportunity the financial activity could even have consequences tied to your tax-exempt status. So hopefully, you’re staying abreast of the ongoing UBIT developments.

Learn more about Principle 19 and the associated resources.

Tell us about them in the comments section below, along with other thoughts that might benefit our readers. You can also use #npethics on social media.

Types: Blog
Global Topics: Ethics and Accountability
Focus Areas: Principles for Good Governance and Ethical Practice