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The team from Charity Navigator, the nation's largest independent charity evaluator and leading donor advocate, shares their thoughts on emerging nonprofit-sector issues and offers tips to better inform your intelligent giving decisions.

Monday, December 19, 2016

Metric Mondays #9: Whistelblower Policy

Welcome back to Metric Mondays! This week, we're looking at an important measure of Accountability & Transparency: the whistleblower policy.

Whistleblower policies outline the procedures an organization has in place for handling employee complaints. It also provides a confidential way for employees to report financial mismanagement.

Federal law protects employees from retribution if they expose financial or accountability mismanagement at both for-profit and nonprofit companies, and having a set policy in place for handling such situations helps ensure the organization is in compliance with the law in these situations.

Further, the IRS states in its instructions to the 990 that, "A whistleblower policy encourages staff and volunteers to come forward with credible information on illegal practices or violations of adopted policies of the organization, specifies that the organization will protect the individual from retaliation, and identifies those staff or board members or outside parties to whom such information can be reported."

The 990 requires that organizations check "yes" or "no" on Part VI line 13 of the 990, disclosing whether they have a policy in place. Charity Navigator believes it is crucial to an organization's Accountability practices to have such a policy, and as such we rate whether an organization discloses that it does on the 990.

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