WHAT DOES THE SARBANES-OXLEY ACT MEAN TO TODAY’S NONPROFI TS?
By Sheryl Nance Nash The Sarbanes-Oxley Act (SOX) may have been chiefly designed for public corporations, but its winds of change have blown over to the nonprofit sector as well. “There has been a ‘trickle down’ impact on nonprofits,” says Kirsten Lescher, a CPA with Plante & Moran in Elgin, Ill. “Because many nonprofits have board members that come from the for-profit arena, as well as large donors—both corporate and individuals with corporate backgrounds—these constituents have played a significant role in imposing some of the principles underlying SOX as ‘best practices’ on the nonprofit community, particularly in the areas of improving governance.” SOX directly impacts nonprofits in two ways: First, in requiring no retaliation against whistleblowers, and second, in prohibiting document destruction in certain circumstances. “As a result, many organizations consider it a best practice to have both a whistleblower policy and a document retention and destruction policy,” says Janice Ro
