The Evangelical Council for Financial Accountability® (ECFA) is a comprehensive resource for ministries and para-church organizations (www.ecfa.org). One of their standards regards compensation-setting and related-party transactions, and it takes effect January 1, 2014. Planning ahead helps you be proactive, and understand how the standard applies to your organization. Members that adhere to the standard will demonstrate integrity and propriety in conformity with ECFA’s Policy for Excellence. But, why follow a standard and not just set your own policies? When you implement standards set by a recognized outside resource, you provide donors and others who watch or support your ministry with a level of assurance and financial accountability. There is no guarantee that you are acting in the best interests of your constituents, but your implied intent is to have integrity with objectivity.
Compensation-Setting and Related-Party Transaction Standards make good sense from a business point of view for internal controls.
More about ECFA
ECFA is an accreditation agency dedicated to helping Christian ministries earn the public’s trust through adherence to Seven Standards of Responsible Stewardship™. They focus on board governance, financial transparency, integrity in fundraising, and proper use of charity resources.