Confirmation Reconfirmation About us What’s new? Resources

Tab 17: Human Resources Documentation

The community foundation submits the Chief Executive Officer (CEO) job description; evidence of regular CEO reviews, including that nature and extent of the review; and the process for determining the CEO’s compensation. Additionally, the foundation submits evidence of a board resolution that the foundation’s personnel policies shall comply with federal, state, and local requirements.

For more information, review Core materials, FAQs and a glossary of important terms

Related Standards

I. Definition of a U.S. Community Foundation
I.A  A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported, nonsectarian philanthropic institution with a long-term goal of building permanent, named component funds established by many separate donors to carry out their charitable interests and for the broad-based charitable interest of and for the benefit of residents of a defined geographic area.

II. Mission, Structure and Governance
II.D    A community foundation has an independent governing body broadly representative of the community it serves.
II.E    A community foundation's governing body retains variance power by which it may modify any restriction or condition on the distribution of assets, if circumstances warrant. Further, with respect to assets held in trust, the governing body must have the power to replace any participating trustee for breach of fiduciary duty under state law or for failure to produce a reasonable return of net income.
II.F.7    A community foundation's governing body oversees a clearly articulated process for board governance.

III. Resource Development
III.C    A community foundation has a long-term goal of securing discretionary resources to address the changing needs of the community it serves.

View all National Standards

Key Elements

CEO job description, including a description of the CEO’s duties, responsibilities, expectations and authority.

Evidence that the board regularly evaluates the CEO and has done so within the past two years.

Nature and extent of the CEO’s review.

Process used for determining CEO compensation.

Board resolution indicating that, to the best of the community foundation’s knowledge, the foundation’s written personnel policies comply with federal, state and local requirements. In addition, the board resolution should indicate that the board will review the personnel policies periodically and will consult with legal counsel as necessary to evaluate the policies and will take reasonable steps to keep the policies current with applicable laws.

Core Materials
FAQs
Glossary

Required Documents

CEO job description
Evidence of CEO performance evaluation

Process used for determining CEO compensation

Board resolution on written personnel policies compliant with federal, state, and local requirements

What should be included in the CEO performance review and process for determining compensation?

The board should periodically review the job description of the CEO and evaluate the CEO's performance on a regular basis. There is no one way to determine compensation. However, IRS guidance suggests a preferred method. Compensation of the CEO should be set by either the full board or the executive or audit committee in a process that takes into account potential conflicts of interest. The responsible committee should report fully to the entire board and this should be reflected in the board minutes. The excess benefit transaction rules (i.e., basing the decision on comparable data readily available to the board or committee and recording the process and decision in the minutes), which create a legal presumption of reasonableness for the compensation of disqualified persons of public charities, should be followed in this process.

Evidence of the evaluation could include a signed board member statement confirming the date of the last evaluation or board minutes with a clearly marked section indicating that the CEO performance evaluation has taken place within the past two years. In addition, you should submit documentation outlining the nature and extent of the CEO performance evaluation. Such evidence could include a sample of the forms used to conduct the evaluation, which might include how the review is conducted, who participates in the review, the frequency of review, and the criteria by which performance is evaluated.

Do we have to submit written personnel policies along with the board resolution?

No. To be compliant with National Standards, only the specifically identified written personnel policies, such as the conflict of interest or whistleblower policies, are required. The board resolution should indicate that your foundation has examined all written personnel policies and determined them to be in compliance with federal, state and local laws.

Excess benefit transaction

A prohibited transaction in which an economic benefit is provided by an applicable tax-exempt organization, directly or indirectly, to or for the use of a disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration received by the organization. An excess benefit may result from overcompensation for services or from other transactions such as charging excessive rent on property rented to the charity. In the case of donor advised fund donors and donor advisors and disqualified persons of supporting organizations, stricter rules sometimes apply.

Reconfirming?

Review all key elements and consider if your organization has made changes to your policies, powers or practices.

Pay special attention to key elements and core materials marked with and a . These represent minimum requirements for reconfirmation as well as Pension Protection Act requirements. Items marked with a are particularly critical for those who submitted record books prior to January 2007.