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Abstract

Governance risk refers to the potential for non-compliance with applicable laws and regulations in any jurisdiction where Endaoment operates. This includes risks associated with charitable and tax laws, particularly pertaining to activities outside Endaoment.org’s charitable purpose, which could jeopardize our compliance status and potentially impact our 501(c)(3) designation. Effective governance risk management is essential to maintain regulatory compliance, uphold our charitable status, and ensure the integrity of our operations.

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Policy Statement

Endaoment is committed to providing regulatory-compliant accounts for users and preventing non-compliant activities. This includes strict adherence to charitable and tax laws critical to maintaining our 501(c)(3) status. We manage governance risks through regular compliance analysis, legal reviews, detailed transaction monitoring, and adherence to practices that prevent self-dealing, private inurement, and other prohibited activities. Compliance with this policy is mandatory for all employees, contractors, board members, and representatives acting on behalf of Endaoment.

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Risk Management Strategy

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Risk Assessment

  1. Compliance Risk Inventory and Classification

    • Maintain a comprehensive inventory of all governance-related risks, categorizing them based on their likelihood and potential impact on the organization.

  2. Regulatory and Legal Analysis

    • Conduct regular reviews of applicable laws and regulations to identify and evaluate potential compliance risks associated with charitable and tax laws.

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Risk Mitigation

  1. Regular Compliance Analysis

    • Perform ongoing compliance assessments to ensure adherence to charitable and tax laws, identifying areas of potential risk and implementing corrective actions as needed.

  2. Legal Review Processes

    • Engage legal experts to review policies, procedures, and transactions to ensure compliance with all relevant laws and regulations.

  3. Transaction Monitoring

    • Implement detailed monitoring of all transactions to detect and prevent self-dealing, private inurement, and other prohibited activities.

  4. Preventative Practices

    • Establish and enforce practices that prevent non-compliant activities, ensuring all operations align with our charitable purpose and regulatory requirements.

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Monitoring and Reporting

  1. Continuous Governance Monitoring

    • Utilize continuous monitoring systems to oversee governance practices and detect any irregularities or compliance issues.

  2. Incident Reporting Mechanism

    • Provide a secure and anonymous system for reporting suspected governance breaches or compliance violations.

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Operational Controls

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Policies and Procedures

  • Documentation
    • All governance-related policies and procedures are thoroughly documented, with both internal and external-facing components where relevant.
  • Annual Review
    • Conduct an annual review of governance policies, updating them as necessary to reflect current best practices and regulatory changes.

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Specific Governance Risk Controls

  1. 3Rs Review Process

    • Ensure monthly financials are confirmed through segregation of duties involving one third party, one staff member, and one board member.

  2. Yearly Third-Party Financial Audit

    • Conduct comprehensive financial audits annually by a third-party AICPA-certified auditor. Updated audit documents must be publicly available on the Endaoment Docs page following management and Board of Directors approval.

  3. License and Taxes Filing Procedure

    • Ensure completion of RRF-1 and any other state/federally required 501(c)(3) documents, along with the annual Form 990, while based in California.

  4. Admin Review Access and Monitoring

    • Ensure that administrators have access to all governance materials as overseers, maintaining oversight and control over compliance activities.

  5. Advertising and Marketing Review

    • Implement a documented and auditable process for submitting advertising and marketing materials for approval prior to first use, ensuring compliance with regulatory standards.

  6. Complaints Process and Communications Monitoring

    • Establish documented procedures for responding to all expressions of dissatisfaction from any source, including timely escalation of complaints, inclusion of contact details, and ensuring responses are made within two weeks.

  7. Codeowner Review Controls

    • Maintain control of the Control Owners Module to oversee governance-related code and ensure compliance with internal standards.

  8. ADA Compliance

    • Ensure all policies are created with ADA compliance in mind and follow WCAG 2.1 guidelines, ensuring proper accommodations are made as required.

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Vendor Management

  • Compliance Standards
    • Implement stringent controls and regular reviews of vendor relationships to ensure compliance with Endaoment’s governance and financial integrity standards.

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Segregation of Roles

  • Segregation of Duties
    • Ensure that critical governance procedures and systems have segregated duties to prevent any single individual from having full control over any process without oversight.
  • Approval Processes
    • Maintain segregated claim diligence and approval processes to uphold checks and balances.
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