Mangement and Governance for Non-Profit- Organizations
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1 Mangement and Governance for Non-Profit- Organizations Best-Practices Guide for Managers and Members of their Supervisory Bodies published by Fachverlag Moderne Wirtschaft Fachverlag Moderne Wirtschaft
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3 Mangement and Governance for Non-Profit- Organizations Best-Practices Guide for Managers and Members of their Supervisory Bodies published by Fachverlag Moderne Wirtschaft Fachverlag Moderne Wirtschaft
4 November 2012 PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, which is a member firm of PricewaterhouseCoopers International Limited (PwCIL). Each member firm of PwCIL is a separate and independent legal entity.
5 Introduction Introduction Charitable and similar non-profit organizations form the backbone of German civil society. At present, there are some 18,000 legal foundations under civil law and some 25,000 charities and other similar non-profit organizations in Germany. Taken together, these bodies make up the so-called third sector and represent a wide range of societal interests and ideals. Despite the diverse nature of their objectives and activities, they have one common characteristic: they are organised under private law and have the objective of being beneficial to society. Nevertheless, such charitable and similar organizations are in competition to receive state funding, financial donations, benefits-in-kind, and support as provided by their members or voluntary helpers. The success of such organizations in competing for these resources is dependent on how carefully, efficiently and transparently such resources are deployed. When charitable and similar non-profit organizations reach a certain size, then it becomes imperative that they are professionally managed and are structured accordingly. Our attached best practice guidelines are designed to support the decision-makers of such organizations in adopting this more professional approach. Based on a definition of objectives and a related strategy, this guideline provides practical information for the successful management of projects and efficient impact analyses, it explains the opportunities and risks associated with various financing models and discusses governance aspects in great detail. In a compact form, the guideline contains the knowledge and experience gained over many years by its authors, who deal intensively with many different issues relating to the management of charitable and similar non-profit organizations. Our special thanks in this respect go to the Stifterverband für die Deutsche Wissenschaft (Donors Association for the Promotion of Humanities and Sciences in Germany), the Centrum für Soziale Investitionen (Centre for Social Investment or CSI ) of Heidelberg University and Phineo gag, who have all made contributions which have enriched our own expertise in this field. We trust that this guideline will contribute to the longstanding success of charitable and similar non-profit organizations and will thus provide a benefit to society, from which we will all ultimately profit. I hope that you find the guideline to be a stimulating read. Prof. Dr. Norbert Winkeljohann Chairman of the Executive Board of PwC in Germany Mangement and Governance for Non-Profit-Organizations 5
6 Table of contents Table of contents Table of illustrations...7 A Introduction...9 B Objectives and strategies The objectives and values associated with the organization Strategic leadership and management Impact model...22 C Realisation, management and impact Business plan/action plan Program management and project management Instruments to analyse success and impact...36 D Financing and privileged charitable or similar status Financing model Raising funds Allocation of funds Asset management...52 E Organization of management and supervisory bodies Governance framework Risk management System of compliance Reporting und transparency...68 F G Glossary...73 Bibliography...77 Your contact person Mangement and Governance for Non-Profit-Organizations
7 Contact Contact Nicole Susann Roschker Tel.: About us Our clients face diverse challenges, strive to put new ideas into practice and seek expert advice. They turn to us for comprehensive support and practical solutions that deliver maximum value. Whether for a global player, a family business or a public institution, we leverage all of our assets: experience, industry knowledge, high standards of quality, commitment to innovation and the resources of our expert network in 158 countries. Building a trusting and cooperative relationship with our clients is particularly important to us the better we know and understand our clients needs, the more effectively we can support them. PwC. 9,300 dedicated people at 28 locations billion in turnover. The leading auditing and consulting firm in Germany. Mangement and Governance for Non-Profit-Organizations 81
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