Now,
corporate world happenings could again influence the
nonprofit sector. Some reform advocates, like
California Attorney General Bill Lockyer, are
studying whether elements of last year's
Sarbanes-Oxley corporate reform law, such as
financial reporting and board independence rules,
should also apply to nonprofits. "The key is to
maintain or enhance donor confidence in the same way
that investor confidence in the private sector
depends on transparency," Lockyer says. But New
York Attorney General Eliot Spitzer, whose office
has brought several high-profile cases against
nonprofits, thinks that greater vigilance by
nonprofit boards is more important than any legal
change. "Good boards root out problems before
they become too extreme," Spitzer says.
advertisement
Some nonprofit advocacy groups are taking action to
improve governance. The Land Trust Alliance, which
is the nation's largest coalition of land
preservationists, announced this fall that it would
rewrite its ethical standards to prevent future
conflicts of interest in land deals like those that
have raised questions at the Nature Conservancy. The
Independent Sector has drafted a model code of
ethics for nonprofit and philanthropic organizations
now being circulated for comment among the
organization's more than 1 million members. The
organization will decide in January whether to treat
it as guidance or a requirement for membership.
"We have a collective responsibility to take
action," says Independent Sector President
Diana Aviv. Even though she says she believes the
problem organizations number only a few, "when
donors read a story about program x, they wonder if
program y just hasn't been caught yet. It
contaminates the whole sector."
