In a 2005 comment on the California’s Nonprofit Integrity Act of 2004 (NIA)—which was that state’s version of Sarbanes-Oxley aimed at the nonprofit sector—attorney Thomas Silk noted:
How can the honest director or officer protect herself or himself from becoming engulfed and confused by the “swirl of change” in standards of nonprofit governance? In this unsettled legal environment, charitable organizations and their directors, officers, and staff are likely to reach the safest harbor if they remain mindful of these principles:
- Increasingly, charities are expected by the public to take the high road.
- It is no longer sufficient for a charitable organization merely to comply with the letter of the law or even the spirit of the law. The charity must go beyond the law. The public now looks to charities to act as moral agents.
- Charitable organizations with the greatest likelihood of satisfying emerging public expectations will be those that take all measures necessary to ensure that the conduct of their directors, officers, and employees reflects the highest ethical standards appropriate to the organizations’ structure and mission.
- To settle for less is to run the risks that the charitable organization’s reputation for integrity will be weakened, its respect by the community will be diminished, and its ability to fulfill its mission will be imperiled.
— Thomas Silk, “Rational Exuberance: An Exploration of the Adaptation by California’s Charitable Sector to Changing Governance Standards: Notes from the Field,” Tax Analysts Exempt Organizations Text, June 22, 2005.
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