BBBS Standards of Practice for Independent Affiliate Agencies ( Agencies )

BBBS Standards of Practice for Independent Affiliate Agencies (“Agencies”)

Effective 1/1/2014

This is a final draft of the proposed updated standards that all independent 501(c)3 Agency Agencies ("Agencies") will be required to follow (the “Standards”). The Standards represent greater specificity and are more performance-oriented than the current standards of practice. Moreover, they are specific to Agencies (and not BBBS Programs under Sponsoring Organizations).

BOARD/GOVERNANCE STANDARDS 1-7

The Standards focus on the key components of the responsibilities of each of the Agency’s Board of Directors (each the “Board”): Governance, Board Development, Fund Development, Fiscal Oversight, Risk Management and Personnel. The Board is legally responsible for assuring that the required policies are in place, current, and accurate. Agency staff (“Agency Staff”), in partnership with the Board, assures that procedures and process are written clearly, accurately and are kept current to comply with Agency operations.

Standards 1 & 2 Overview: Exceptional Boards take a lead role in developing the agency’s strategic/business plan in partnership with Agency Staff. The Board monitors progress against the goals of the strategic/business plan.

1) Vision, Mission and Accountability

Each Agency must have the same vision, mission and accountability statement as that written in the NLC and BBBS Board-approved Nationwide Strategic Direction (link to current plan).

2) Strategic Planning

Each Agency must have a Board-approved, multi-year, written Strategic Business Plan (sample will be provided) that is reviewed annually by the Board; and an annual, written Operating Plan (sample will be provided); both of which are implemented by the Board and designated Agency Staff; and address, at a minimum:

a) Clarity of roles and responsibilities relative to execution and accountability of Strategic Business Plan implementation;

b) Alignment with the strategic initiatives from the current BBBS Nationwide Strategic Direction (link to current plan);

c) Statement of commitment and associated performance goals related to serving children who reflect the diversity of community;

d) Multi-year and annual measurable agency goals (sample will be provided of Core Business Scorecard) in the areas of;

i) Program, including quality metrics; and

ii) Finance, pertaining to, at a minimum, revenue by source and sustainable unrestricted net assets.

Standard 3 Overview: Financial sustainability is critical to being able to serve children/youth in local communities with the necessary Agency Staff, quality programming, and safety. Boards lead the resource development efforts of the agency ensuring that the agency has the resources needed to execute the strategic/business plan. Exceptional Boards commit to and hold themselves accountable for resource development through personal giving and providing access to other donors. This is a demonstration of a culture of philanthropy and the Board’s personal commitment, which is often asked about by funders: What percent of the Board financially supports the agency?

The Board works with the CEO/Executive Director and the fund development staff to develop and implement a fundraising plan that supports/addresses current operation needs, contingencies and planned growth.

3) Fund Development

Each Agency shall have a Board-approved, multi-year, written Fund Development

Plan (sample will be provided) that is reviewed annually by the Board; implemented by the Board and designated Agency Staff; and addresses, at a minimum:

a) Clarity of Board and Agency Staff roles and responsibilities relative to implementation of the Fund Development Plan;

b) Identification of Board members’ and designated Agency Staff's measurable goals in fundraising / fund development; and

c) Measurable goals applied to multiple revenue sources in order to sustain a diversified funding base.

Standard 4 Overview: The bylaws can address the issues of membership and recruitment, training and evaluation. Setting a time frame for review helps assure that Boards review with some regularity. Three years is a best practice cited from BoardSource.

4) Legal Compliance

a) Each Big Brothers Big Sisters ("BBBS") independent Agency must have a Board which is charged with governance of the Agency and, as such, fulfilling the legal responsibilities of the Agency. Each Board must certify (link to template), in writing, to BBBSA on an annual basis that the Agency is:

i) Incorporated and in good standing as a not-for-profit entity in the State in which its corporate office is located and (if applicable) qualified to do business as a foreign corporation in any other state(s) within its Service Community Area (“SCA”);

ii) Operating in compliance with applicable federal, state and local laws, including those of the municipalities/counties/states in which the Agency’s BBBS operations exist;

iii) Retaining its not-for-profit tax exempt status with the IRS, as a 501( c) (3) entity; and

iv) Developing, reviewing annually, and updating, as necessary, all written plans, policies and procedures that require Board approval, including, but not limited to, those described below.

b) Bylaws

Each Board must operate in accordance with written, Board-approved bylaws, in accordance with State Law, including, at a minimum, the following:

i) General:

(1) BBBSA-approved name of Agency;

(2) BBBSA-approved SCA;

(3) Procedure for dissolving Agency and disposition of physical and financial assets upon dissolution.

ii) Board Membership;

iii) Officers;

iv) Committee Structure;

v) Board Meetings;

vi) Fiduciary, including

(1) Identification of corporate fiscal year;

(2) Authorization to enter into contracts; and

(3) Indemnification of Board members and officers

vii) Chief Executive Officer/Executive Director, including

(1) Vesting in the Board the responsibility for hiring, training, supervising, evaluating and terminating CEO/ED; and

(2) Role and voting rights, if any, of CEO/ED on the Board.

Standard 5a Overview: Exceptional Boards establish mechanisms for active oversight in the following areas: agency effectiveness, financial management, risk management, ethical and legal compliance, and compliance with BBBS Standards of Practice. The Board is providing effective ethical and legal oversight. This includes communicating and implementing a whistleblower policy and conflict of interest policy for Board and Agency Staff.

5) Board Policies and Procedures

Each Agency must have Board-approved, written policies that are reviewed annually by the Board; and procedures that are implemented by the Board and designated Agency Staff and enforced by the Board.

a) A Policies and Procedures Manual (sample will be provided) that addresses, at a minimum, the following, as they apply to the Board, Agency Staff, volunteers, parent/guardians, donors and vendors:

i) Confidentiality of personnel, donor and program participant data;

ii) Privacy and security of sensitive data;

iii) Code of ethics;

iv) Whistleblowers;

v) Conflicts of interest;

vi) Lobbying and political activity;

vii) Nepotism;

viii) Nondiscrimination;

ix) Statement of commitment to diversity and inclusion;

x) Sexual harassment;

xi) Disposition of complaints;

xii) Record retention and destruction;

xiii) American Disabilities Act (ADA) compliance;

xiv) Electronic (social) media policy;

xv) Environmentally safe and secure workplace;

xvi) Criminal background screening of potential Board members and Agency Staff, including a policy for updating screenings; and

xvii) Board members and Agency Staff serving as volunteer mentors (“Volunteer Bigs”).

Standard 5b Overview: Financial sustainability and the ability to absorb negative cash flow for a short period are critical to being able to serve children/youth in local communities with the necessary Agency Staff, quality programming, and safety. Sustainability depends upon cash reserves. In addition, the confidence of funders is affected by the capital health of an organization. A strong cash position signals financial health.

The Board monitors the agency's financial health through regular reviews of financials in order to facilitate early identification of financial problems.

An audit of financial statements ordinarily covers the statement of financial position and related statements of activities and changes in net assets and cash flows. The CPA’s responsibility is to determine whether these statements conform with generally accepted accounting principles (GAAP).

b) Financial Management Policies and Practices (sample will be provided) that include, at a minimum:

i) Roles and responsibilities of the CEO/ED, designated Agency Staff, Board Treasurer, Board Finance Committee and any ad hoc Committee relative to development and enforcement of financial management practices;

ii) Practice(s) for annual completion of IRS Form 990 (link to IRS);

iii) Practice(s) for maintaining compliance with Generally Accepted Accounting Practices (“GAAP”) (link to reference site);

iv) A Board-approved policy about cash reserves;

v) Policy for securing and sustaining unrestricted net assets;

vi) Endowment policy, if applicable;

vii) Corporate bonding policy;

viii) Corporate investment policy;

ix) Capital expenditure policy;

x) Corporate loan policy, including securing and using a Line of Credit;

xi) Corporate credit card policy;

xii) Practice(s) for annual operating budget development, approval and monthly monitoring of variances in expenditures;

xiii) Monthly review by Finance Committee, or designated Board member(s), of agency profit and loss statement, balance sheet/statement of activities, twelve-month rolling cash flow report (sample will be provided) and the review of complete financials, at least quarterly, at Board meetings;

xiv) Practice(s) related to separation of duties for fiscal control, including, at least, bank deposits, investments, bank statement reconciliation, opening mail, employee reimbursements, cash advances, and petty cash;

xv) Reimbursement policy for agency-related expenses incurred by Board members;

xvi) Check authorization levels and binding signatory practices;

xvii) System for financial document retention and disposal, in accordance with state and federal law;

xviii) Process for competitively selecting an independent accounting firm;

xix) Process for conducting an independent annual financial audit within six months of close of corporate fiscal year; and

xx) Notification of BBBSA in the event that it appears reasonably likely that the Agency will experience insolvency; inability to pay debts as they become due; intention to file for bankruptcy; voluntary or involuntary bankruptcy; and/ or adjudication as bankrupt.

Standard 5c Overview: The Board has a comprehensive risk management system and plan ensuring that agency operational risks are identified and appropriately managed through insurance (including directors' and officers' liability insurance), policies, and procedures.

c) A Risk Management Plan (sample will be provided and link to resources) that addresses, at a minimum, as applicable to the Board, Agency Staff, volunteers, parent/guardians, children served, donors and vendors:

i) Roles and responsibilities of the Board and designated Agency Staff relative to implementation and enforcement of Risk Management Plan;

ii) Insurance Plan that specifies all insurance coverage secured, including Accident, Agency Auto, Directors and Officers, Errors and Omissions, General Liability, Property and Worker’s Compensation;

iii) Crisis management practices, specifically tailored to BBBS operations and programs (sample will be provided);

iv) Crisis communication plan, specifically tailored to BBBS operations and programs (sample will be provided);

v) Child safety policies and procedures, including immediate reporting of any allegation to BBBSA (link to report);

vi) Practices for handling property loss, theft or damage;

vii) Safe environment policies/workplace practices;

viii) Office and employee security protocols;

ix) Technology security policies and workplace practices;

x) Fundraising risks, including, at a minimum, Board/Agency Staff gift acceptance policy, restricted gifts, sponsorships and endorsements, charitable registration, insurance coverage, and guidelines concerning solicitations;

xi) Procedures for competitive selection of vendors; and

xii) Procedures for maintaining confidentiality, security of program files and security of sensitive data.

Standard 6 Overview: Exceptional Boards energize themselves through planned turnover, thoughtful recruitment and inclusiveness. They have a Governance Committee in place whose charge is to ensure the Board has and follows best practices for recruiting, orienting, educating and evaluating Board members.

The Board has the ideal composition, the right Board members with the right skills, diversity and spheres of influence. Diversity enriches discussions, adds perspectives and fresh approaches. It also helps bring in new, untapped resources from other communities and spheres of influence to enable the Agency to be more relevant and impactful. When an Agency has a diverse Board committed to inclusion, there is a better chance of recruiting and keeping a diverse workforce. A diverse Board sends a positive message to the communities agencies are serving.

6) Board Development

Each Agency shall have a Board-approved, multi-year, written Board Development Plan (sample will be provided) that is reviewed annually by the Board; implemented by the Board and designated Agency Staff; and addresses, at a minimum:

a) Clarity of roles and responsibilities relative to implementation of the Board Development Plan;

b) Practices for identification and recruitment of potential new Board members that includes using sources and strategies that yield qualified, diverse Board candidates in the selection pool;

c) Procedures for filling vacancies and/or replacing outgoing Board members;

d) Orientation process for new Board members;

e) Succession Plan for rotation of or resignation of officers; and

f) Annual written evaluation of individual and collective Board performance with summary results presented to the Board (sample will be provided) in these areas, at a minimum:

i. Fund Development (Board give and get; total agency revenues from individuals, corporations and events);

ii. Board Development; and

iii. Diversity / Inclusion of the Board and engagement with the communities the agency is striving to serve, as defined by the Agency.

Standard 7 Overview: Exceptional Boards ensure that CEO/Executive Director performance is regularly reviewed and that both a leadership succession plan and an emergency succession plan are in place.

Accountability is critical to organizational success. The areas of evaluation tie to the BBBS Strategic Direction. Each Agency would set their own specific goals and assess in these areas, at a minimum.

7) CEO/ ED Oversight

The Board shall have the responsibility for CEO/ED oversight and executive leadership succession, as specified in the Agency bylaws. In the execution of those responsibilities, the following policies and practices must be Board- approved, reviewed annually by the Board, and enforced by the Board:

a) Board support and oversight of the agency CEO/ED includes, at a minimum:

i) Written job description for CEO/ED that clearly defines the authority of CEO/ED, and identifies roles and responsibilities of CEO/ED (sample will be provided);

ii) The CEO/ED is evaluated through a regularly scheduled, annual written performance review process against agreed upon performance goals (sample will be provided) that include, at a minimum:

(1) Financial results

(2) Number of children served

(3) Program Quality results

(4) Diversity and Inclusion

iii) CEO/ED must have, at least, a Bachelor’s degree from an accredited college/university;

iv) CEO/ED must be a full-time employee of the Agency, based on the number of hours identified by the Agency as constituting full-time status; may not be a contract employee;

v) Written Succession Plan in the event of CEO/ED resignation, termination or leave of absence; and

vi) Budgeted travel and associated expenses which ensure CEO/ED annual attendance at the BBBS national conference/meeting.

b) In the event of a change in executive leadership, the Board is responsible for the following:

i) Process whereby Board notifies BBBSA representative in writing within ten (10) business days of any of the following events: vacancy in executive leadership; the naming of an interim CEO/ED; and the hiring of a new CEO/ED;