ECFA issues new standard for compensation-setting practicesLatest News Monday, December 10th, 2012
WINCHESTER, VA — ECFA has announced the addition of new policies for setting compensation for top leaders of its member organizations. These practices become effective Jan. 1, 2014, allowing ECFA-accredited churches and Christian nonprofit organizations time to implement the changes.
The compensation-setting policies are included in newly written Standard 6, one of ECFA’s Seven Standards of Responsible Stewardship™ by which ECFA- member organizations agree to operate. Standard 6 now also includes revisions to its guidelines on related-party transactions to ensure utmost integrity in all agreements.
Beginning Jan. 1, 2014, Standard 6 will state: “Every organization shall set compensation of its top leader and address related-party transactions in a manner that demonstrates integrity and propriety in conformity with ECFA’s Policy for Excellence in Compensation-Setting and Related-Party Transactions.”
Organizations with higher paid leaders will be required to perform minimum due diligence to ensure reasonable total compensation, while all organizations are encouraged to adopt the practices. “The new standard takes compensation-setting practices for ECFA-member organizations to a higher level,” said Dan Busby, ECFA president.
Under the revised standard, related-party transactions must be conducted in a manner that demonstrates integrity and propriety according to ECFA’s high standards.
Specific guidelines are detailed in ECFA’s Policy for Excellence in Compensation-Setting and Related-Party Transactions, a new section at the end of Standard 6.
ECFA’s Seven Standards of Responsible Stewardship™ are drawn from Scripture. They are considered simple but not simplistic and have significant implication for ECFA accredited churches and Christian nonprofits, which pledge to follow all of these standards, all of the time.
The additions and revisions to Standard 6 are intended to bring even further integrity and accountability to organizations that are approved to bear the ECFA seal.
ECFA, founded in 1979, provides accreditation to leading Christian nonprofit organizations that faithfully demonstrate compliance with the ECFA standards pertaining to financial accountability, fundraising and board governance. To learn more about ECFA, including information about accreditation and a listing of ECFA-accredited members, visit www.ecfa.org or call 1-800-323-9473.