Standard 1: Oversight of Operations and Staff - Organizations shall have a board of directors that provides adequate oversight of the charity's operations and its staff. Indication of adequate oversight includes, but is not limited to, regularly scheduled appraisals of the CEO's performance, evidence of disbursement controls such as board approval of the budget, fund raising practices, establishment of a conflict of interest policy, and establishment of accounting procedures sufficient to safeguard charity finances.
- LOI does not meet this Standard because the board of directors does not review the performance of the chief executive officer (CEO) at least once every two years. In addition, LOI does not meet this Standard because the organization reports that no member of the board is assigned the responsibility of serving as the treasurer of the board of directors. In general, the board's treasurer helps provide independent oversight of the organization's finances.
Standard 3: Frequency and Attendance of Board Meetings - An organization shall have a minimum of three evenly spaced meetings per year of the full governing body with a majority in attendance, with face-to-face participation. A conference call of the full board can substitute for one of the three meetings of the governing body. For all meetings, alternative modes of participation are acceptable for those with physical disabilities.
- LOI does not meet this Standard because although the organization held three board meetings during 2007, two of the board meetings were held less than thirty days apart.
Standard 4: Compensated Board Members - Not more than one or 10% (whichever is greater) directly or indirectly compensated person(s) serving as voting member(s) of the board. Compensated members shall not serve as the board's chair or treasurer.
- LOI does not meet this Standard because two (2) members out of the six (6) member board of directors (33%) are paid staff, including the chair of the board.
Standard 5: Conflict of Interest - No transaction(s) in which any board or staff members have material conflicting interests with the charity resulting from any relationship or business affiliation. Factors that will be considered when concluding whether or not a related party transaction constitutes a conflict of interest and if such a conflict is material, include, but are not limited to: any arm's length procedures established by the charity; the size of the transaction relative to like expenses of the charity; whether the interested party participated in the board vote on the transaction; if competitive bids were sought and whether the transaction is one-time, recurring or ongoing.
- LOI does not meet this Standard because according to the organization's most recent audited financial statements: “LOI utilizes marketing entities operated by a former LOI executive, who is related to a current director. The services provided relate to strategy, ministry marketing, and direct mail services. Annual marketing representation fees paid by LOI in 2006. . . were $1,367,000. . . Reimbursed costs for products, printing, call center, and mailing expenses incurred for the year ended December 31, 2006. . .approximated $5,249,000. . .“
The combined total of $6,616,000 represents 54% of LOI's fund raising expenses for 2006.
Standard 6: Board Policy on Effectiveness - Have a board policy of assessing, no less than every two years, the organization's performance and effectiveness and of determining future actions required to achieve its mission.
- LOI does not meet this Standard because the board of directors does not have a written policy stating that, at least every two years, an appraisal be done assessing the organization’s performance and effectiveness and determining future actions required to achieve its mission.
Standard 12: Detailed Functional Breakdown of Expenses - Include in the financial statements a breakdown of expenses (e.g., salaries, travel, postage, etc.) that shows what portion of these expenses was allocated to program, fund raising, and administrative activities. If the charity has more than one major program category, the schedule should provide a breakdown for each category.
- LOI does not meet this Standard because the detailed functional breakdown of expenses within the organization's financial statements only included one program service category. It did not include a detailed breakdown of expenses for each of its major program activities (media ministries, missions outreach and project ministries, and literature and tape distribution ministries).
Standard 14: Budget - Have a board-approved annual budget for its current fiscal year, outlining projected expenses for major program activities, fund raising, and administration.
- LOI does not meet this Standard because the organization states that it does not have a budget for the current fiscal year.
Standard 16: Annual Report - Have an annual report available to all, on request, that includes: (a) the organization's mission statement, (b) a summary of the past year's program service accomplishments, (c) a roster of the officers and members of the board of directors, (d) financial information that includes (i) total income in the past fiscal year, (ii) expenses in the same program, fund raising and administrative categories as in the financial statements, and (iii) ending net assets.
- LOI does not meet provision (d) of this Standard because its annual report does not include the recommended financial information.
LOI meets the remaining provisions of this Standard.