Nonprofit, NGO & Public Funding Accountability
NONPROFIT, NGO & PUBLIC FUNDING ACCOUNTABILITY
POSITION
A nonprofit label does not place an organization above accountability. Any nonprofit, nongovernmental organization, charity, foundation, fiscal sponsor, association, religious organization, foreign aid organization, or other private entity that accepts taxpayer money must prove that the money was used for the exact public purpose for which it was awarded.
Public money may support legitimate public service. It may not become an unmonitored stream for personal enrichment, political favoritism, inflated executive compensation, related-party contracts, phantom services, or activity materially different from the approved purpose.
ONE RULE FOR EVERY PUBLIC RECIPIENT
The same accountability rules should follow federal money through every prime recipient, pass-through entity, affiliate, fiscal sponsor, subrecipient, subcontractor, and foreign partner. Moving money through another organization does not erase the obligation to account for it.
Before receiving funds, each covered recipient must disclose its legal identity, controlling officers, board members, related entities, material conflicts, bank account used for the award, responsible program officials, and the beneficial owners of material vendors.
PURPOSE, BUDGET & MEASURABLE RESULTS
Every award must state:
the exact public purpose and population to be served;
the approved budget by category;
specific deliverables, deadlines, service levels, and outcome measures;
the permitted administrative and fundraising costs;
the documentation required before payment;
the conditions for suspension, repayment, termination, and appeal.
Awards should use staged payments tied to verified work where practical. The government must confirm actual delivery and outcomes, not merely accept a recipient's statement that money was spent.
TRANSACTION RECORDS & PROOF
Every covered recipient must maintain a linked transaction record showing the award, approved purpose, invoice, payee, payment, proof of delivery, service record, responsible official, and final acceptance. Payroll charged to an award must identify the position, actual time or allocation, compensation, and work performed.
Recipient and subrecipient spending should be published in a standardized electronic format on the federal spending portal within 30 calendar days, subject to narrow protections for client privacy, victims, minors, medical information, legitimate national security, and active investigations. Protected details remain available to authorized auditors. Government should provide a secure, no-cost reporting system for smaller recipients so compliance does not require expensive custom software.
RISK-BASED AUDITS
Every recipient, regardless of amount, must submit an annual certified use-of-funds statement and retain complete supporting records.
A recipient receiving or spending at least $100,000 in public funds during a year must file quarterly spending, performance, payroll-by-position, and subrecipient reports and obtain an annual independent financial and compliance audit.
At $500,000 in annual public spending, the independent audit must also test program performance, payroll allocation, related-party transactions, material vendors, subrecipients, and a risk-based sample of proof-of-delivery records.
A recipient spending at least $1 million in federal awards during a fiscal year must complete the applicable federal Single Audit and a performance review testing whether promised services were actually delivered.
Any recipient may receive a random, risk-based, complaint-triggered, or forensic audit regardless of funding amount.
An auditor may not be selected, controlled, or removed solely by the executive whose compensation, spending, or conduct is under review. Repeated use of the same audit firm must be reviewed for independence.
EXECUTIVE PAY, RAISES & PAYROLL TRANSPARENCY
Recipients must publish compensation for officers, directors, key employees, the ten highest-paid employees, and the five highest-paid independent contractors, including salary, bonus, deferred compensation, benefits, allowances, severance, and payments from related organizations.
The remainder of payroll should be published by position, showing headcount, pay range, median pay, total compensation, and the share charged to public awards.
Executive compensation must be approved by independent board members using documented comparisons to substantially similar work. The executive benefiting from the decision may not participate.
Federal award money should not fund an executive's total annual compensation above the salary of the President of the United States unless the awarding agency grants a written, public, and narrowly justified waiver for exceptional specialized need.
An executive raise exceeding 10 percent in one year, or 20 percent cumulatively over two years, while the organization receives public money must receive a new independent compensation review, a recorded board vote, a public written justification, and awarding-agency approval before public funds pay the increase.
No bonus may be based merely on obtaining a larger grant, spending the entire award, or moving money to a related entity.
Compensation audits must look both ways. Frontline employees should not be underpaid while executives and contractors receive excessive compensation. Findings should compare responsibilities, qualifications, local labor markets, turnover, vacancies, and program results.
RELATED PARTIES & CONFLICTS
Transactions involving an officer, board member, executive, family member, major donor, controlled business, landlord, consultant, or affiliated organization must be disclosed before approval. Material related-party purchases require independent approval, price comparison, and a written finding that the transaction serves the public award and is fair to taxpayers.
No organization may create affiliates, change names, move funds through a fiscal sponsor, or use a new legal entity to evade an audit, repayment order, or debarment. Common control and beneficial ownership must be considered.
QUICK REVIEW, STOP-PAYMENT & APPEAL
A credible allegation supported by specific evidence should receive an initial eligibility and payment-risk review within five business days.
The agency should complete the initial administrative determination within 30 calendar days. Any extension must identify the unresolved evidence and a firm completion date.
The government may temporarily pause disputed or high-risk payments, but should preserve lawful services for innocent beneficiaries through monitored payments or transfer to a qualified provider when practical.
The recipient must receive written allegations, the material evidence, and an opportunity to respond. An independent appeal should be decided within 15 business days after the complete appeal record is submitted.
RECOVERY & REAL CONSEQUENCES
Money spent outside the authorized purpose must be repaid. Unspent funds must be returned at the end of the award unless a lawful extension is approved.
Knowing false claims, fabricated services, personal use, kickbacks, concealed related-party transactions, or intentional diversion should require restitution, forfeiture of gains, recovery of at least three times the government's proven loss where authorized by law, and applicable civil penalties.
The organization and culpable individuals should face a minimum 10-year debarment from federal awards. Repeat intentional fraud or an intentional scheme involving $1 million or more should permit permanent debarment.
Continued eligibility should require the removal of executives, financial officers, or board members found after due process to have knowingly directed, concealed, or personally benefited from the misuse.
Evidence of a defined crime must be referred for prosecution. Organizational status, political relationships, charitable branding, and promised future cooperation should not create immunity.
Board members and employees are not personally or criminally liable merely because wrongdoing occurred somewhere in the organization. Individual punishment requires proof that the person committed, directed, knowingly participated in, deliberately ignored, or criminally concealed the misconduct under the applicable legal standard.
WHISTLEBLOWERS & PUBLIC REPORTING
Employees, clients, vendors, auditors, and volunteers must have protected reporting channels and remedies for retaliation. Final audit findings, repayment orders, executive compensation, debarments, corrective plans, and verified program outcomes should be searchable by organization and controlling individual.
WHAT WE WILL MEASURE
Public reporting should track money awarded, money reaching intended services, administrative and executive costs, payroll distribution, promised and completed work, audit findings, related-party transactions, questioned costs, recoveries, debarments, referrals, prosecutions, beneficiary outcomes, and repeat violations.
Core MPA standard: If an organization takes public money, it must prove where the money went, what the public received, and who was responsible. Charity is not a shield for fraud. Public service is not permission for private enrichment.
Related policies: Public Money, Audits & Proof of Spending; Government Integrity & Equal Justice; Federal Spending & National Debt; Investigations, Enforcement Deadlines & Due Process; Workers' Rights.
Status: Proposed / Draft, not yet formally adopted.
Originally published: September 27, 2026.
Last updated: September 27, 2026.
Version: Draft 0.2.