Why Every Executive Director Needs a Compliance Expert

Part of an executive director’s role is managing the many moving pieces that go into operating a successful non-profit. But no single person can be expected to be an expert on everything. When some of an executive director’s duties fall outside of their skill-set or experience, the risk of error increases. And, when your non-profit depends on funding, the last thing you want to do is expose your organization to unnecessary risk.

This is where compliance experts come in. Think of these professionals as advisors who can step in and fill the gap between your expertise and the task at hand, allowing you and your organization to mitigate risks, save money, and maintain your peace of mind.

What does a compliance expert do?

Compliance experts are professionals who help non-profit organizations meet the high standards set by the government with regard to financial compliance. These are people who are well-versed with non-profit contracts, taxes, and insurance. They come to the table with technical experience that your executive director and board may not have at their disposal.

Take contracts, for example. These legal documents are vital and, unfortunately, often inundated with complicated jargon. It’s important that you understand what contracts stipulate before signing them, but sometimes that can feel like reading a document that’s been written in a language you don’t know. A compliance expert can act as a contract manager, helping you decipher your contracts and avoid the expense of seeking out a lawyer. They do this by:

  • Reviewing the terms, conditions, and phrasing of contractual language
  • Providing your organization with a recommendation of whether the contract (or other legal documents) is likely to pass
  • Acting as your organization’s liaison if further action is required (e.g. if a lawyer needs to get involved)

The same can be said for dealing with insurance. If a contract or grant has any insurance provisions associated with it, a compliance expert can review them to make sure your organization is covered. And, just like with contracts, a compliance expert can review your insurance coverage and help you understand it. Don’t forget: just because you have insurance, it doesn’t always mean you’re covered. A compliance expert who understands the language of your coverage will help you avoid learning this the hard way.

What kind of skills should compliance experts have?

Compliance experts are often tasked with translating complicated legal jargon into a language their clients can easily understand. For this reason, it’s important that they be strong communicators who can explain things to you clearly and concisely. Because of the work they do, compliance experts should have experience working in the legal environment, especially contract law, and a strong understanding of insurance as well. The more detail-oriented they are, the better. 

Why should your organization use a compliance expert?

Working with compliance experts is a matter of protection. Many non-profit organizations—especially smaller ones—don’t have the resources to have lawyers on hand to review contracts or insurance documents. A compliance expert will work with you to keep you informed of the risks your organization may be taking on, giving you the power to decide if they are risks you’re willing to accept or not.

Without the aid of a compliance expert, you may end up entering into contracts that expose your organization to a level of risk that could come back to haunt you. When non-profits sign contracts without knowing what the terms mean, it can cause a significant financial impact. We see this a lot when organizations contract with government entities, such as a city or state, or even federal government agencies. These agencies carry a lot of clout and come with unique red tape that can make it difficult to get contract language changed. But many non-profits think they have to sign the contract anyway if they want to get the money they need, which opens them up to risk. This is where a compliance expert can help.

Compliance experts will be on the lookout for things like indemnification clauses, which state that your organization is liable for not only your own acts of negligence but the negligence of the organization you’re contracting with as well. They can also make sure you don’t end up accepting funding or grants that have requirements that your organization can’t meet, which will prevent you from having to either pay those funds back or prevent you from being able to reapply the following year.

What kind of compliance services does Trestle provide?

One thing we do is help non-profit organizations like your develop an initial contract, which can then be presented to various funders. This will define how a relationship between your organization and another will work.

In the past, we’ve helped an organization create a memorandum of understanding with several school districts to provide a new funding source for them. We’ve also helped another organization move from one data provider to another by reviewing the associated contracts, identifying risks, and negotiating the contracts to a point where the organization felt comfortable signing.

If your non-profit organization could benefit from the skills and experience of compliance experts, get in touch with us. We’re here to help!