Colorado Nonprofit Standards Program
Revised to Further Promote Excellence Among the State’s Nonprofits
Sharon Knight, Vice President & Chief Operating Officer, Colorado Nonprofit Association

Changes in Principles and Practices for Nonprofit Excellence in Colorado: Second Edition
There are now 11 principle areas with 194 practices to consider for adoption. The following is a sampling of important changes.

Overall Changes
  • Added new principle areas on communications and information technology in order to give guidance in areas that have grown in complexity and importance.
  • Added references to Form 990 practices throughout.
  • Ensured that all legal citations throughout are relevant and up-to-date.
Governance & Leadership
Nonprofits should:
  • Annually review and approve the organization’s budget to ensure that expenditures are in alignment with the mission.
  • Actively participate in and approve the strategic planning efforts of the organization.
  • Engage in succession planning for the chief executive, board members and key staff, to ensure strong leadership and accountability for the organization during planned – and unplanned – times of transition.
  • Establish an effective, systematic process for educating board members to ensure that each member is equipped with the information needed to carry out oversight functions.
Financial Management
Nonprofits should:
  • Devise and implement control procedures to ensure accurate information and prevent fraud.
  • Work towards diversifying its funding sources.
  • Monitor and make adjustments when necessary to ensure appropriate cash flow, to facilitate smooth fiscal operations.
  • Not allow personal use of its funds or business credit cards.
Nonprofits should:
  • Be aware of and comply with requirements for gaming auctioneering, and raffles.
  • Work towards diversifying its funding sources.
  • Pursue and accept funding that is unrestricted or restricted to a use that is in alignment with the organization’s strategic direction and mission.
  • Ensure that compensation for fundraising personnel and contractors is not based on a percentage of funds raised or other commission-based formulas.
Human Resources
  • Should endeavor to provide compensation in accordance with industry standards in order to obtain qualified employees needed to fulfill the mission of the organization.
  • Must be aware of and in compliance with the rules regarding exempt versus non-exempt employment status, as well as when an individual may be categorized as an independent contractor.
Nonprofits should:
  • Have a thorough understanding of the communities in which they operate, including the needs of constituents, services provided by the government and other nonprofits, and trends.
  • Obtain necessary insurance products such as general liability, property, and directors and officers liability insurance to protect the organization and its employees, volunteers and board members.
Nonprofits should:
  • Share accomplishments, demonstrate use of funds and provide reasoning behind program changes developed as a result of relevant findings.
  • Assess the usefulness and accuracy of current evaluation practices and modify them as needed in order to establish more successful processes to improve program effectiveness.
Advocacy, Public Policy and Civic Engagement
Nonprofits should:
  • Build relationships with elected officials, community leaders and other nonprofits in order to strengthen their ability to affect community change and impact public policy.
  • Ensure that board and staff distinguish between personal opinion and organizational positions.
  • A nonprofit must not engage in more than insubstantial lobbying activities.
Nonprofits should:
  • Ensure communications adhere to the highest ethical and professional standards, as well as any applicable industry-specific standards and should exhibit transparency, fairness and honesty.
  • Have a clearly defined, written communications plan that supports the organization’s strategic plan.
  • Establish and implement clear policies regarding confidentiality.
  • Ensure that board and staff distinguish between personal opinion and organizational positions.
Information Technology
Nonprofits should:
  • Have reliable information systems in place that provide timely, accurate, and relevant information to facilitate workflow.
  • Have a policy that addresses personal use of the organization’s information and technology.
  • Implement a policy that prescribes how all organizational information is gathered and stored, how accuracy is maintained, how and what information is backed up, and who is authorized to view or manipulate that data.
  • Have a catastrophic recovery plan and should utilize at least minimal security measures.
Strategic Alliances
This section underwent substantial revision. We broke the practices into two subsections.
  • Assessment
  • Relationship Building and Strategies
Transparency & Accountability
This section was not significantly altered.
  • Thanks to sponsorship by BBVA Compass Bank, EKS&H and Polsinelli Shugart, the Colorado Nonprofit Association is sending to all member organizations the new edition of Principles &
  • Practices for Nonprofit Excellence in Colorado, and will distribute the guidebook at training sessions and events throughout the year. Anyone may download a copy of the document, the Basic Checklist and the Assessment and Planning Tool for personal or organizational use. Please look to the Resources Page of Colorado
  • Nonprofit Association’s website to find additional information, related samples and templates for use in implementing Principles & Practices for Nonprofit Excellence in your organization
Step by Step Guide for Using P&P
  • Step One. Complete the Basic Infrastructure Checklist to make sure your records, filings and policies are up-to-date and in order.
  • Step Two. Review Principles & Practices for Nonprofit Excellence in Colorado with your board and staff. If appropriate, make an organizational commitment to adopt and institute principles and practices that make sense for your organization. It may take some time to get to where you would like to be.
  • Step Three: Determine your organization’s stage of development in the nonprofit lifecycle and become familiar with the strengths and challenges you face in the areas of management, governance and programming.
  • Step Four: Complete the Organizational Assessment and Planning Tool.
  • Step Five: Review the Organizational Assessment and Planning Tool results and your action plan with key staff and board leaders. Determine what resources you have internally and where you may need outside assistance.
  • Step Six: Walk the talk. Implement changes and improvements. The online FAQs & Resources by P&P Topic Area will help you identify how you can strengthen your policies and procedures.
  • Step Seven: Remember that excellence is a journey, not a destination. Establish a plan for ongoing evaluation and reflection to ensure your organization continues