Guiding Principle: Nonprofits are founded for the public good and operate to accomplish a stated purpose through specific program activities. A nonprofit should have a well-defined mission, and its programs should effectively and efficiently work toward achieving that mission.Nonprofits have an obligation to ensure program effectiveness and to devote the resources of the organization to achieving its stated purpose.
A. MISSION AND IMPACT
(1) A nonprofit should have a mission statement that is a clear and formal statement of the organization’s purpose as defined and approved by the board of directors. The organization’s activities should be consistent with its stated purpose.
(2) A nonprofit should be able to articulate how its mission is supported by a statement of the organization’s vision and strategic goals.
B. PLANNING STRATEGICALLY
(1) Nonprofits should engage in ongoing long and short-term strategic planning activities as necessary to determine the mission of the organization, to define specific goals and objectives related to the mission, and to evaluate the success of the organization’s programs toward achieving the mission.
(2) A nonprofit should periodically revisit its mission (i.e., at a minimum every 5 years) to determine whether the need for its programs or services continues to exist. In light of societal changes and critical strategic issues, the organization should evaluate whether its programs should be modified, expanded, or discontinued to meet the mission.
C. ORGANIZATIONAL EVALUATION
(1) A nonprofit should engage in organizational evaluation to ensure that all financial resources and human capital are being used toward fulfilling its mission.
D. PROGRAM EVALUATION
(1) A nonprofit should have defined, cost-effective procedures for evaluating, both qualitatively and quantitatively, its programs and projects in relation to its mission. These procedures should address programmatic efficiency and effectiveness, outcomes for program participants, and the relationship of these outcomes to the cost of achieving them. Evaluations should include input from program participants, and should monitor the satisfaction of participants.
(2) Evaluations should be candid, and should be used by leadership to strengthen the organization’s effectiveness, and, when necessary, be used to make programmatic changes.
E. STRATEGIC PARTNERSHIPS
(1) Nonprofits engaging in strategic partnerships and formal alliances with other organizations should do so within the context of a board-approved policy outlining the goals and parameters of such partnerships. Depending on the type of strategic partnership, nonprofits should ensure that proper due diligence has been followed and that agreements, memorandum of understanding, or similar documentation have been thoughtfully reviewed and considered.