A new accreditation process pioneered by a local organization may eventually become the standard for nonprofit agencies in the post-corporate scandal era.
Plan USA of Warwick, a local nonprofit charity organization, is among the first nonprofits to undergo a formal accreditation review to validate its organization to donors. World Vision, Christian Children’s Fund, Children International and Save the Children have also gone through the process and all five agencies will receive accreditation at the same time. The child sponsorship certification audits were launched in October 2004 and it is anticipated that all five audits will be completed by June 2005.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
There are 1.5 million nonprofit organizations in the United States and none of them have to be accredited by outside, private agencies to operate.
“People take a sort of leap of faith when they give donations, especially to organizations like us that use the money in faraway countries where people can’t see the results,” said Plan USA Director Samuel Worthington.
Plan USA is an international organization that helps children in emerging countries; it was founded in 1937 as Foster Parents Plan. The group’s programs are in place in more than 60 countries around the world.
For the past five years, the five agencies have been using a private, independent accrediting agency to certify their compliance with the Private Voluntary Organization Standards, an organization that set standards for various functions.
The certification audits are a comprehensive process that included site visits, both at the U.S. headquarters and at random field offices in other countries. The external audits have also been accredited by Social Accountability International, known for its SA8000 labor standards audits around the world.
“Accreditation is intimidating for the nonprofit sector because for the first time, nonprofits have this process available,” Worthington said.
The process will likely take about 10 years before it becomes the norm, in part because of the cost, Worthington said.
It cost Plan USA $70,000 to undergo the pilot program, which involved inspectors investigating the Warwick headquarters, inspecting sites where work is being done overseas, interviewing recipients of the donations, financial audits and checking to see if advertisements match what the organization actually does.
