Nonprofit Information

Tips To Having a Successful Nonprofit.

How to Get on a Nonprofit Board

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How to Get on a Nonprofit BoardSo you want to join a nonprofit board. Whoa, back up, really? That’s terrific, but can we explore the why before we get to the how? Hopefully you are driven to seek a seat at the table in order to take personal action using your experiences, skills and connections to solve a problem or address a challenge in your community or anywhere else on the planet. Think hunger, homelessness, poverty, a particular health crisis, uneven educational opportunities, unsafe relationships, aftermath of wars, as a start. Let’s begin with the assumption that you are joining others driven by the same degree of passion. If they aren’t . . . that is a topic for another day. You are going to develop an intimate knowledge of how your fellow board members analyze opportunities, how they communicate, what talents they bring to the table, and how you might learn from them, and utilize their connections to expand your own network. These are good things, and you will be bringing your own value adds to share.

Do you know what it means to be a board member for a public charity? Do you understand the fiduciary, fundraising, volunteering and advocacy responsibilities that are expected by law and by the public? Not all boards introduce and onboard with the same degree of clarity, so you need to know what kind of a board and what kind of participant you want to be. There are online resources to learn more and help you answer these questions, and in some communities you will find organizations that offer related workshops for preparing to become a nonprofit board member.

When you join a nonprofit board, you will have motivating ideas of how you can support the organization and even what you might gain by doing so. You may rightfully anticipate the connections you can make to further your ability to put your passions to work with a team of like-minded individuals. Board service can expand your business and community networks, as you learn from others with a variety of experiences that have shaped their attitudes and paths. You may see board participation as a chance to stretch your leadership style in ways that everyday life and work experiences don’t readily offer. You may be hoping for a place to leave legacy footprints, making a purposeful difference where it matters most to you. The right board match can help you achieve these goals.

On some corporate boards members can be compensated for their participation. “Compensation” looks very different and special for nonprofit board members. As a nonprofit board member you are expected to make a financial contribution, beg your friends to donate as well, spend hours (mostly evenings) in meetings, buy tickets and tables to events, and operate often without an exit strategy of when to step away from this “privilege.” If you are not deterred, then thank you! Nonprofit board service can be the most intense, important and satisfying volunteer commitment you can undertake. And quite honestly, there are many, many benefits you should enjoy as a result.

Don’t shy away from the win-win of board service. If you are going to spend that much time, energy and philanthropic dollars, you better get something in return. It can be a warm feeling in your heart, a warm lead to a new customer, or the satisfaction that you actually took action to solve a thorny problem. Go for it.

Now as for how to join a board, please keep in mind that there are a variety of nonprofits just as there are a variety of for-profit businesses. How you proceed to join a “Fortune 500” nonprofit board will be different than the path to joining one that is a startup. The bigger the budget of an organization, the broader its geographic reach, the more “prestigious” the current board, the more likely it is that you will need to be willing to write a big personal check or deliver a sizable donation from your company on a regular basis. You may already be a significant donor. You may already have a large reputation for direct involvement in the organization’s mission or in a related area.  The closer to a Fortune 500 type nonprofit, the more likely it is that you will be head-hunted for the board because nonprofits of this size and scope understand that many others are fishing in the same pond for potential additions. They have determined that it is worth the investment to professionally search for key thought leaders and those who could add cache in some way. If you want to be considered for one of these boards, you likely already know how to go about it.

The path to joining any nonprofit board, but certainly one of a small to mid-sized or startup organization, must start with passion. Ask yourself, “What do I care about; what keeps me up at night?” and then look for organizations working on solutions. If your passion is solving a problem that is halfway around the world, you are honestly less likely to find a board opportunity in your backyard, but you can certainly find ways to donate money or volunteer your time. For example, Google “solving water pollution.” You will find organizations that tell you how to donate, volunteer and advocate to this end. This may never lead to a board position, but you might find your engagement to be equally satisfying.

The closer your interests are to local problem solving, the better the chances of eventual board service.  You want to get to know an organization from the inside as early as possible to confirm that this is a place where you want to invest your time and resources more deeply. Maybe you already have your eye on a local nonprofit. Explore their website and see who is on the board and who is in leadership on staff. You may already have connections so that you can learn more about how the board operates and what the expectations of a member. In the meantime, note any volunteer opportunities posted on the website or reach out to see if there are ways that your skills (marketing, HR, accounting, legal, etc.) could be utilized on a committee or special project. See if there is an event where you could participate in its planning or execution. Ask if there is a need for advocates to speak out or write on behalf of the organization. All these activities will give you a chance to get to know the organization and, equally important, give the board and staff a chance to know you and what you can bring to the table.

If you have the interest but don’t have connections or don’t know where to begin, don’t despair. Read local media with an eye to organizational leadership commenting on issues you care about. Use LinkedIn, Facebook, Instagram and Twitter to see which organizations and people are engaged. See if there is a volunteer connector organization or local affiliate of Points of Light in your area and explore volunteer opportunities. Ask local thought leaders in government, civic organizations, business networking groups, and faith-based institutions for names of nonprofits doing good work and introductions to learn more.

After spending thoughtful time, if you are still interested in joining the organization’s board, let it be known. Usually a conversation with the Executive Director, Board Chair, Governance Committee Chair or a key program officer will get the ball rolling, but it doesn’t guarantee an instant or eventual place at the table. The best boards aren’t just looking for warm bodies with deep pockets, to be crass. The best ones are looking for new additions who are passionate about the mission; can fill particular skills and knowledge gaps around the table; bring diversity of opinions, backgrounds and experiences; understand what their role will be; recognize they will be expected to make financial contributions and introductions to others; anticipate that there will be personal and professional fulfillment; and are ready to roll up their sleeves and make a difference.

Not every date leads to a permanent lasting relationship, but good things will always come from getting to know key nonprofits and the boards that lead them. Enjoy the search for a great board to join. It’s out there, and the benefits are going to be as personally rewarding for you as they will be to the nonprofit.

Employee Retention in Small Nonprofits

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Nonprofit Employee RetentionNonprofits are natural inlets for individuals passionate to serve and make a difference. That is not to say that for-profit organizations do not possess individuals who are passionate about making a difference in the world, but nonprofits at their core are a social construct meant to change policy, culture, or positively impact some entity in order to leave things better then how they were. Unfortunately, many small nonprofits struggle to retain employees. There are some natural barriers toward employee retention for nonprofits. Obviously pay can be discouraging and there is not a lot that can be done to change that for many small nonprofits. So, what can be done? What options do small nonprofits have? There are arguably three things that every small nonprofit can implement to improve employee retention.

1.) Human Resource Strategy:

The smaller the organization the more human resource strategy seems like a given. It’s an easy temptation to think that human resource strategy is simply a part of the whole business strategy. This is because many nonprofits offer services and human resources are central to the overall strategy of the organization. However, forming a human resource strategy will guide nonprofits in how they utilize the employees they have and thereby further the overall mission while curtailing employee turnover. Having a human resource strategy means having a set plan for how each human element in an organization will be used to further the vision. Such a strategy will allow an organization to comprehensively develop policies to utilize the primary areas of human resources such as compensation, training, and recruiting to avoid being lazy with resources. Some helpful components that could be part of any small nonprofit human resource strategy are:

  • Make a strong effort to boost financial compensation to give fair wage for the work being done by cutting out nonessential budget items or redistributing compensation among employees.
  • Having a fair maternity leave policy that doesn’t burn through an employee’s paid time off or vacation.
  • Add tuition reimbursement to benefits package with restrictions geared towards employee retention such as access to reimbursement after at least one year of employment.
  • Raise tuition reimbursement but require employees to stay on for a contracted amount of time in order to get the amount.
  • Explore or implement the option for employees to cash out paid time off, especially in organizations where there are caps or other restrictions on paid time off. This is a simple way that employees can be compensated if they don’t need all their time off or they could use extra pay instead.
  • Adopt a training policy that is beneficial to the organization and employee by giving the option to have the training budget be used for tuition reimbursement for continuing education.
  • Allow employees who are students in college programs relevant to the organization’s needs to count class hours towards required training hours.
  • Refine job requirements for all positions and strictly stick to them in the recruiting process. If employee turnover is high; it can be tempting to hire anyone willing to work. However, taking the time to find the right match to the exact job description will have more long-term benefits than hiring out of desperation.
  • Make the interview process match the position. If the job requires the person to work with a team; then have them be involved in a group interview with that team. If the position is very unique or more hands on; then have a shadowing session where the interviewee can see what exactly they are potentially getting into. This will help refine the search for trustworthy staff.

Every nonprofit is unique in its own way and the ways to strategize go far beyond the few components that were just mentioned. The main point is that nonprofits find personnel in their organization from their management, board, or other staff and create a human resource strategy to stop losing employees due to poor planning.

2.) Employee Culture:

Working to change employee culture is a difficult task just as shaping any culture is a difficult task. In this context, culture is broadly defined as the culmination of norms and values among a particular social group. Cultures are going to vary drastically given the different types of services provided, different histories, different beliefs, being faith-based or being secular, and any number of other variables when it comes to the culture among nonprofit employees. One of the biggest problems that face nonprofit employee culture and why employee turnover can be so high is organizations not recognizing what their culture is. Whether this is done intentionally or the organization doesn’t know it is happening, the lack of understanding of the culture in the workplace leads to a type of identity crisis. One where the organization will try to head in a different direction than that of its employees. This can cause disagreements over the way things should be done and will deplete morale. Some ways for nonprofits to promote a positive culture and work against issues surrounding misconceptions over workplace culture are:

  • Define the culture that exists among the employees. This can be done using surveys or having a focus group in order to determine what norms and values are most common among the current staff and how that impacts their productivity.
  • Apply the defined culture to aspects of the human resource strategy. This could mean restructuring compensation to match the values of employees, developing training to work with the personalities/learning styles of employees, or developing recruiting practices that bring in candidates who match the culture or enhance the culture.
  • Give employees room to grow into their positions. This means appointing main tasks to staff, but not dictating every detail of how it is done. Employees can then develop their own set of best practices for the tasks assigned and be allowed to show their passions and express values.
  • Reward employees based off the values and norms that exist within the workplace culture. This is perhaps throwing office parties to celebrate a successful quarter, granting special days off, or doing whatever it takes to make sure employees feel like their organization sees their good work. This can build trust and confidence within small organizations.
  • Discipline employees based off the values and norms that exist within the workplace culture. Just as every culture will respond better to certain rewards, they will also respond better to certain disciplinary actions when they make mistakes or step out of line. This could be a three strikes policy for before getting an official write up, this could be mandatory training to prevent repeated mistakes, or it could a disciplinary policy allowing for staff to negotiate what discipline they will receive. The purpose behind this is that when employees are disciplined, they don’t feel betrayed by the organization and feel inclined to leave.
  • Facilitating culture, not micromanaging it. Organizations can facilitate culture by providing employees opportunities to be together in a variety of ways. This can be scheduled staff meeting designed to let employees work together and hear from everyone, this can be having a budget for staff to host lunch meetings to focus on certain aspects of the job, or this can be any attempt at getting staff to be together and express values and norms together.

Employee culture is a tricky component of any business or organization. However, it can quickly become an issue within a small nonprofit. If a nonprofit can’t define its culture; then it will disrupt the well-being of its employees. If employees become disgruntled because they feel like their values aren’t being recognized; then they have a reason to not want to stay. Organizations can improve retention if they focus on the employee culture they currently have and how to best respond to it.

3.) Hype Up Unique Compensation:

When pay is not abundant (the case for most nonprofits) there has to be an enthusiasm generated among other forms of compensation. These other forms of compensation are usually called indirect financial compensation and other non-financial compensation. Indirect financial compensation comes in the form of health insurance, dental coverage, and tuition assistance or reimbursement. Many nonprofits have the benefit of being able to provide decent insurance packages. Nonprofits may also have the ability to provide some form of childcare or special memberships to gyms and clubs. Non-financial compensation are perks of the job that may not have a monetary value. This can be the ability to work from home, flexible hours, or other forms of service that can’t easily be measured for their value. This also includes work space and atmosphere. It can be a benefit to have a nice office or work car to get to use. Perhaps an organization offers a four-day work week, that is an amazing perk that needs to be advertised and packaged as a unique benefit of the organization. Beyond typical work benefits every nonprofit has its areas of benefits specific to its sector. Whatever it is, small nonprofits need to make sure that those benefits are incorporated and verbalized in their human resources strategy and that the culture of the workplace is encouraged by such benefits. Many nonprofits are concerned with very difficult subject matters. When there are employees involved in social work, counseling centers, shelters, and other difficult types of work; then nonprofits need to make sure that every manner of compensation is highlighted. Hyping up other forms of compensation is a way of giving employees a reason to stay on top of the heartfelt reasons they got into the nonprofit sector.

Employees are going to come and go. At the end of the day, employees are going to realize what they like and dislike about an organization and that’s okay. However, the task of giving employees more reason to stay has to be undertaken in order to have mission success within small nonprofits. People who work within the nonprofit world have a passion for what it is they do within that sector. If it is passion that brought a worker to an organization; then passion will cause them to leave if they can’t find fulfillment.

Improve Your Nonprofit’s Leadership: 4 Top Tips

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Nonprofit Leadership TipsLeadership plays a crucial role in the success of any nonprofit. While your board and executive director might not typically be on the very front lines of fundraising, these bodies are the ones that create the strategic plan for that initiative and greenlight any funding put toward it. Both are essential tasks.

However, from tension within nonprofit boards to leadership that is disengaged from their organization’s work, sometimes sub-par nonprofit leadership is an organization’s biggest complication.

Just consider the Survey on Leadership and Management in the Nonprofit Sector conducted by Stanford University’s graduate school of business. When given a list of 11 options, 38% of respondents noted weak or ineffective management as a top challenge in the nonprofit sector as a whole.

If that sounds like your organization, it’s time to make a concentrated effort to improve your nonprofit’s leadership. We’re going to explore the following strategies to help you do so:

  • Outline roles and expectations for each leader clearly.
  • Cultivate a culture of philanthropy.
  • Bring in professional help.
  • Recruit quality leadership from the start.

Strong leadership will have a domino effect on your organization, motivating every team member of your nonprofit to perform at their best. Continue reading to learn how to improve your nonprofit’s leadership today!

Outline roles and expectations for each leader clearly.

Consider how your organization would fare without a nonprofit strategic plan in place. While you might be able to easily navigate short-term fundraising efforts, any longer-term efforts (such as building fundraising capacity or even projecting your annual fund needs) would be significantly more difficult without a 3-5 year plan in place.

It’s a very similar scenario for your leadership! Without clearly outlined operating rules, your leadership’s “strategic plan,” successfully completing their job is significantly more difficult.

This doesn’t just mean copying standard nonprofit bylaws from a digital template and calling it a day. Rather, in addition to bylaws tailored to your organization, you should outline clear roles and expectations for each leader on paper.

What are the expectations of a board member? What are the expectations of executive directors? Answer those questions clearly and concisely and make sure every leader is aware of it.

Just like your bylaws, revisit these documents regularly to make sure they’re still relevant for your organization and leadership.

Cultivate a culture of philanthropy.

When discussing nonprofit leadership, there are generally two facets considered: executive leadership and board members.

While the former (directors and other salaried leaders)  play hands-on roles in your organization by mere definition of their role, the latter (board members) can often be found in distant roles in many organizations.

Think of it like this: your executive directors coordinate the planning of fundraising activities, while board members simply sign off on the funds needed to hold the initiative. Of course, the exact level of board involvement will vary greatly from one organization to another. The main point is that board members typically have their own very separate lives and careers that occupy most of their time.

Whether filling a less-present role or not, it’s crucial that all members of your leadership feel connected to your organization and cause. They need to feel the philanthropic spirit that fuels your cause because that’s what will motivate them to fulfill their role to the highest degree.

There are a few different ways to cultivate this culture of philanthropy in your leadership:

  • Encourage leaders to participate in fundraising efforts. This could be as simple as writing giver thank-yous as a capacity-building task after a major campaign.
  • Set an expectation of board member fundraising. During each fundraiser, your board members should be making gifts and reaching out to their networks to do the same.
  • Hold leadership retreats. Bring your leaders together for a weekend of training on fundraising best practices. Bonus points for adding a volunteer aspect to the retreat and incorporating nonprofit-branded t-shirts into the mix!

Regardless of how you get there, it’s important that each leader in your midst pitches in to your cause.

Bring in professional help.

Sometimes, improving your nonprofit’s leadership is simply too large a task to handle within your team. It makes sense— evaluating where your leadership is failing and instructing your peers on how to improve is a sensitive task.

If that sounds like your organization, consider bringing on a nonprofit consultant to help navigate the improvements. Consulting firms offer a variety of leadership-strengthening services, including conducting leadership learning events and embedding expert staffers in your team to provide in-person, daily training.

An outside perspective will notice issues in your leadership that you might not notice yourself. After all, it’s hard to see all of the details of a picture when you’re standing too close to it! Plus, consultants can help guide critical but necessary conversations with your organization’s leaders.

Learn more about hiring a fundraising consultant, and the associated fees, through this guide by Averill Fundraising Solutions.

Recruit quality leadership from the start.

Improving your nonprofit’s leadership doesn’t always refer to improving those already serving in your nonprofit’s highest ranks. It could also mean hiring new leaders to enhance (or replace) those already in position. Or, it could mean building your leadership from the ground up if you haven’t had much of a formal body before!

Regardless of why you’re hiring new leaders, it’s crucial that you recruit quality team members from the start. Evaluate each board member and director you hire against specific criteria most important to your organization.

For board members, consider the following criteria:

  • Is the candidate considered a thought leader, or a “go-to” expert in their industry or your greater community?
  • Does the candidate have an impressive social following, specifically on social networks?
  • Do they have experience relevant to your nonprofit’s cause, or nonprofits in general?
  • Do their interests align with your organization’s values?

For executive directors, consider:

  • Does the candidate have stellar communication skills?
  • Do they have extensive knowledge of fundraising and the nonprofit sector overall?
  • Do they have technical skills specific to your organization’s fundraising efforts?
  • Are they able to keep a level head under pressure?
  • Do they have a long-term vision for your nonprofit that aligns with yours?

This is another task where it might be helpful to bring in a nonprofit consultant. Some consulting firms offer executive search services, through which they recruit impressive executive leaders that fit your organization’s existing culture. Further, these consultants can help create a strategy for successfully onboarding new leaders! Check out this guide to learn more about nonprofit fundraising consultants and strategy development experts.

Conclusion 

Having strong leaders at the helm of your nonprofit is crucial for future success. Luckily, improving your leadership doesn’t have to be a difficult task!

Consider incorporating any of the above strategies and watch your leadership become more engaged, more philanthropic, and more helpful participants in your organization.

Conflict on the Board of Directors? Four Tips to Defuse Tension

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Nonprofit Board Conflict ResolutionMembers of a nonprofit board of directors are wonderful people. They are often accomplished professionals, visionary leaders, and passionate supporters of the cause. Interestingly, these characteristics of excellent directors can also set the stage for tension in the boardroom. Let’s look at four tips for defusing any conflicts.

Clearly define roles and rules of conduct.

The most effective boards and meetings have one thing in common: clear expectations. Board conflict prevention starts with everyone knowing who is in charge and what is expected. I encourage boards to actually make a board member commitment “contract” that spells out the roles and responsibilities of being a director. There should be a similar description for each of the board officers, too. That way, no one is confused about who should be reporting on which areas and who is responsible for certain decisions. Make sure there are also procedures spelled out for meeting discussions and votes. If everyone is aware of the rules ahead of time, it is much easier to address conflict later.

Be hard on ideas, not people.

This is a great mantra I learned from our board governance coach, Kim Donahue. It’s all about cultivating a culture that can pick apart ideas as needed without making it personal. This is a fairly intuitive way to behave, but reminding board members about it in a fun informational session can go a long way towards boardroom decorum. Additionally, make sure that your board is building in enough social time to grow real trust and respect between members. It is much easier to express an opposing view if you believe that your fellow board directors all have the organization’s best interest in mind.

Enlist the troublemakers.

I use the word “troublemakers” loosely here to mean the people who might be more inclined to dominate a discussion or always be the first to offer their opinion. Sometimes this happens organically as other directors look to a few strong leaders to see how they feel about an issue before weighing in. If you find your meetings always revolving around the opinions of one person, elist this person to lower tension in the boardroom. Try pulling them aside and saying something like, “Brenda, everyone values your point of view so much. I wonder if we could try an experiment in this meeting. I really want some feedback from the others on this agenda item, so it would be interesting to see what would happen if you withheld your ideas for a minute to see what they come up with.” Win the more opinionated board members over to your side and you might find that the people who were previously a challenge become the peacekeepers.

While some dissent is healthy, everyone needs to come together after a vote.

 Disagreement is a part of discussion, but everyone should understand that the vote on the motion should be the end of that discussion. The board will vote yes or no, and all board members should know that is the time to accept the decision of the board. This can sometimes be difficult for board members who disagree. Consensus means that even though I may disagree, I can support this decision because the majority of board members believe it is the right thing to do. It is not a bad idea to remind board members that the decision of the board should be supported by everyone in the room. Being considerate of dissenting opinions will go a long way toward resolving any differences.

Conflict in the boardroom can take time to resolve.

Don’t be discouraged if it seems like certain disagreements keep flaring up over and over. There will be times that people simply don’t like each other that much, and that’s okay. As long as you have started implementing the four steps above, you will be on the way to reining in any disputes. Don’t be afraid to periodically take a step back and ask board members what is working and what isn’t. With some careful thought, board feedback, and proactive practices, your board will be on the right track.

 

About Boardable:

Boardable is an online board management portal that centralizes communication, document storage, meeting planning, and everything else that goes into running a board of directors. Founded in 2016 by nonprofit leaders and founders, Boardable has a mission to improve board engagement for nonprofits. Boardable is based in Indianapolis, Indiana.

What Every Nonprofit Needs to Know About Technology

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Nonprofit TechnologyReturn address labels. I so rarely mail anything that receiving return address labels with a donation request from a charity I wholeheartedly support was simply a tipping point. In addition to my annual donation, I vowed to volunteer and share what I know about using technology to solve business challenges.

More and more nonprofits are facing challenges that mirror those of for-profit businesses. They need to cut operating costs, reach more stakeholders, move to data-driven decision making, and keep information secure. While businesses invest in technology and transform their operations from end-to-end, too often nonprofits give technology a pass. Tight budgets, lack of knowledge, fear of change—they are all part of the resistance.

Making technology improvements doesn’t necessarily mean a massive undertaking that requires many resources. I recommend starting with an assessment and a plan that helps you focus your goals, understand the technology you have, and learn about standards for technology in other nonprofits of a similar type and size. Then prioritize the improvements that offer the strongest return on investment—big gains for a small amount of dollars and effort—or those that will help you meet your top goals.

To help you get started, I’ve gathered some perspectives on technology that all nonprofits can use.

The right technology can help you save money on operations.

First, focus on efficiencies in your operations to reduce or eliminate redundancies, waste and errors, and in the process save money. Technology can play an important role in creating efficient processes, helping you reduce or eliminate duplications and delays, as well as helping you speed up by automating specific tasks. Technology allows for faster processing of data and easier sharing and retrieval of information. Automation can reduce the time a repetitive task takes and eliminate human error, like sending a welcome email when new members register, or filling out financial forms.

Technology also keeps information up to date. Instead of searching through spreadsheets to gather data on members, anyone in your organization can open a shared database and have the most up-to-date information at their fingertips. Also, integrating systems, like finance or project management systems, can help keep track of how much time staff members spend on various efforts. This will help you determine if it’s a worthwhile task, one that needs to be outsourced, or one that needs more resources.

Invest in data analytics to take advantage of your data.

Examining your data can lead to a deeper understanding of the relationship between your activities and results.

I remember a nonprofit client who found that the same material covered in their 5-day, in-person certification classes could be taught in about 3 days online. Armed with the data, they worked to offer an online class. The move reduced instructor and travel expenses, and delighted participants, all without impacting the integrity of the program.

Another nonprofit examined data from a decade of fundraising efforts and discovered that the two biggest campaigns each year demanded considerable up-front costs and time; however they failed to reach top donors. That insight helped them consider new options and reprioritize efforts for the following year.

Data can also help organizations demonstrate their powerful impact solidifying their case for grant and donor money. Using data to target fundraising appeals by interest and donor capacity has proven to be more effective than hitting the whole list repeatedly.

Security is everyone’s responsibility. Make it a priority.

Nothing can derail a nonprofit’s growth, reach and reputation like data breach exploiting personal and financial information or beneficiary lists. Because you share a passion and a cause with your audiences, every exchange of information or money is a trusted transaction.

It can be powerfully motivating to look at your current vulnerabilities and worse-case scenarios when prioritizing security. It’s also important to think through educating staff on security issues, and closing up endpoint security issues, such as unprotected laptops or websites that connect to your network.

Want governance and transparency made easy? Invest in technology.

Every nonprofit operates by certain standards and reporting structures. Good governance, according to the National Council of Nonprofits’ Good Governance Practices requires a good mix of board members, leadership and accountability, and a blend of candid discussions, transparent practices, and governance policies. Additionally, your industry may have formalized principles and practices and standards for excellence for nonprofits.

Technology tools make light work of keeping up with these standards. There’s a host of proven technologies for reporting, taxes, audits, policies and more that save headaches, hassles and time.

I notice that nonprofits tend to discount competition in their sector, but every nonprofit is constantly competing for funding, volunteers, and even talented staff. Charity Navigator, GiveWell and annual ranking lists all use standardized data and information categories to evaluate nonprofit organizations, influencing these external audiences. One of the ways to distinguish your nonprofit ranking or score is through transparency and accountability metrics, which often boil down to how technology is used to manage governance.

Connect the community to your future mission in new ways.

Digital communication is a game changer. Your reach, impact, and ability to personalize the connection are now all a reflection of your technology choices. Information-rich websites, tailored appeals, online education, open-source tools, social media updates, and technology have transformed nonprofit tactics, leading to greater awareness and a streamlined donor experience.

Top trends include text messaging for quick updates and news alerts; customer relationship management systems that collect data and engage donors; and social media that helps nonprofits make incredible connections. We now live in a time when someone, inspired by a story they see on social media, can donate by simply telling their home voice assistant, “Give $10.” The long-term impact of today’s communication technologies will shift how all nonprofits tell their stories as well as achieve their missions. The question is, when will yours embrace it?

Technology is the competitive advantage for nonprofits.

Models of commercial organizations, as well as nonprofits, show us that those who choose not to invest in technology will see an ever-widening performance gap between their outcomes and those of organizations that adopt technology effectively. The models emphasize the value of an innovative culture, which is at odds with traditionally risk-adverse and show-to-change nonprofits.

Historically, we know that ignoring technology launches a cycle of ignoring change such as not innovating and benefiting from the value that comes with technology, not to mention a flexible, adaptable organizational culture. Nonprofits who hope to continue the mission for years to come simply cannot ignore the call to technology. And they don’t have to take massive risks to do it.

Basic operational technologies, the baby steps to digital transformation, have been adopted on a large enough scale and for a long enough time to be proven effective. Investing in them makes sense and shows ROI. What’s needed is a deeper understanding of how technology solutions support nonprofit missions and strategies.

While data analytics get nonprofit boards excited and motivated, the real value of technology daydreaming is that it helps organizations understand why they want tech tools, what they hope to accomplish, and why it might be worth using consultants or hiring staff to ensure the transition is timely, effective, and a good experience for stakeholders.

To effectively adopt technology, nonprofits need technical expertise coming from the top management levels and woven through the organization—not secluded in information technology departments. Done right, technology adoption isn’t about new apps or devices, it’s about strategically selecting digital tools that empower staff and members to deliver on the mission. It’s a cultural mindset that embraces innovation.

Start-Up Essentials for Launching a Nonprofit Organization

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Start Up NonprofitsStarting a nonprofit organization can be both personally fulfilling and professionally challenging.  While many nonprofit founders are motivated to do good in the world, forming and operating a successful nonprofit also requires business acumen and attention to complex state and federal laws.  To ensure that your nonprofit starts with the proper legal foundation, it is important to take the right steps at the outset.  Below are some essential legal issues to consider when forming a nonprofit.

Corporate Formation

A nonprofit can function as either an incorporated or an unincorporated organization.  Incorporating may require additional filings, but both can qualify for tax-exempt status.  To form an incorporated nonprofit, it is necessary to file incorporation paperwork with your state’s Secretary of State and pay a fee.  There are legal protections to operating the nonprofit as a corporation, so most nonprofits choose to operate as a corporation.  It is important to consult an attorney to prepare your incorporation documents, especially if you intend to qualify for 501(c)(3) status, as there are certain provisions the IRS requires to be included in the incorporation documents.

By-laws

A nonprofit must create By-laws, which will govern how the organization operates.  State requirements vary, but most By-laws provide for how the nonprofit can elect directors and officers, how many directors it should have, the length of a director’s term, quorum requirements, and how to hold meetings.  Changing By-laws later will usually require approval by two-thirds of the directors.

Board of Directors

In a nonprofit, the board of directors is comprised of uncompensated volunteers who guide the mission, develop a strategy, set policies, oversee finances, and even fundraise.  To the extent that the nonprofit wants to qualify as a 501(c)(3) public charity, having a majority of disinterested directors will be important to establishing tax exempt status.

Establishing a strong board of directors is critical to the success of every nonprofit organization.  The best directors combine a passion for the mission with an ability to think strategically and provide proper oversight.  Board composition will influence and direct the dynamics of the organization, so a team that brings a diversity of skills, perspectives and experiences is highly beneficial.  With the right board members, a nonprofit can be successful in both good times and bad.

Effective Leadership

An executive director’s role is to oversee the nonprofit’s functions, including fundraising, program development, HR management and finances, and provide strategic guidance to board members on setting annual fundraising goals and standards for community outreach, grant-making, and more.  However, a truly impactful executive director is dynamic, engaging and creative.  He or she must embody the enthusiasm, passion, diversity and experience that is the model for all board members to follow.  Particularly in a newly formed nonprofit, it will be up to the executive director to serve as the face and voice of the organization, and motivate board members to work as a team to advance the nonprofit’s mission.  Part manager, part cheerleader, and part visionary, the executive director must be a strong leader who doesn’t mind getting his/her hands dirty in the day-to-day work.

Application for 501(c)(3) Tax Exempt Status

Most nonprofits that solicit funds will seek to qualify as 501(c)(3) tax exempt organizations with the IRS.  To qualify, the nonprofit must fall into one of several IRS categories, including religious, charitable, scientific, educational or literary purposes.  You should be sure to consult with an experienced attorney or accountant to assist in preparing the IRS forms.  This is your opportunity to tell your story of why you should be granted tax exempt status with the IRS, and it is important to do it right to avoid delays or rejection with the IRS.  An attorney can also help you best apposition the nonprofit to qualify for 501(c)(3) status.

Compliance with State Regulations

Most states require nonprofit charities that are organized in the state and/or solicit funds in their state to register with the charities division of the Attorney General’s office.  Charities division registration is important, as many states require registration before you can solicit funds in that state.  Depending on the nature of your fundraising and other activities, charities may have to register with the charities division in multiple states.

Operations – Special Rules for Charities

A nonprofit charitable organization must not only operate as a regular business (dealing with issues related to contracts, employees, leasing of space and the like), but must also deal with a series of special rules for charities.  Generally, these can be broken into two categories – no self-dealing and following the donor’s intentions.  These are the two most common areas where charities can get into trouble.

  • No Self-Dealing. Generally this means that the charity must handle all business dealings with its officers, directors, donors and founders on an “arms-length” or for fair value, and any transactions with such parties must be disclosed to and approved by a majority of the disinterested directors (those not involved in this transaction).  For example, if a charity leases space from a founder or director, the rent must be at no more than a fair market value rate.  The IRS imposes penalties (known as “intermediate sanctions”) on the charity and its directors for above-market related party transactions, so it’s important to follow these rules closely.
  • Following the Donor’s Intentions. This may sound obvious, but this is often where issues arise.  For example, if you hold a fundraiser and your marketing materials provide that “all proceeds from the event will go to cancer research”, this means that the charity cannot later decide that some of the funds raised can be used for hiring a fundraiser, or for other programs not related to cancer research.

In addition, charities need to comply with all IRS laws regarding notices to donors for tax purposes.

Intellectual Property

The nonprofit leaders should not overlook their intellectual property (IP), which can be a valuable asset.  If the organization generates ideas, images, marks, products, and reputations, it is important to protect these valuable assets.  Trademarks, copyrights and patents can enhance the brand, generate support and drive growth.  In addition to safeguarding the nonprofit’s own IP, nonprofit leaders should take care not to infringe upon another organization’s rights, as this can have costly consequences.  The virtual world has added new twists on IP concerns and questions, so it is important to consult a lawyer to ensure proper procedures.

Employment Law

Nonprofits are not exempt from state and federal employment laws, so it is vitally important that the nonprofit leadership stays abreast of the employment laws that apply to employees in states where the nonprofit operates to ensure it is compliant.  At a minimum, nonprofits need to:

  • Formalize employment terms through formal employment contract, especially for senior management
  • Understand the employee vs. independent contractor issues
  • Develop an employee handbook
  • Have written policies covering sexual harassment, social media and computer/internet use

Because employment laws are complex and ever-changing, it is advisable to have a professional resource available to consult when questions arise about employment issues.  Relying on employment laws and HR management experts is much more prudent than trying to go it alone in this highly regulated area.

Legal Agreements

Like any business, a nonprofit needs to use a range of legal agreements to reduce its liability and avoid legal disputes.  Some common agreements include:

  • Confidentiality agreements to be used for suppliers, contract manufacturers, distributors, joint venture partners, prospective customers and other parties to whom confidential information may be disclosed
  • General business contracts, such as office and equipment leases and contracts with major suppliers, distributor, contract manufacturers, brokers, joint venture partners, equipment vendors]

If you plan to form a nonprofit organization, being mindful of the above essentials will help put you on the path to success.  Since the start-up process and ongoing compliance requirements can be complicated, you should be sure to consult an experienced nonprofit attorney and accountant.

Manager and Board Member Social Media Policies for Compliance with “Lobbying” Rules

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Nonprofit Manager Board Member Social Media Policies for Compliance with “Lobbying” RulesBefore the ubiquitous use of social media, managers and board members of 501c3 organizations would have had a hard time unintentionally “lobbying.” Communicating a political position used to require big spends like radio or TV ad buys, press release circulation, or printing posters and leaflets for distribution. Now, however, a post(s) by a nonprofit manager or board member on Facebook, Instagram, Twitter, or YouTube could expose a 501c3 organization to risk of noncompliance with IRS lobbying rules. Therefore, organizations should learn some of the IRS’s “lobbying” rules of the road. Note, other entities, like the FEC and various state agencies, also regulate political speech, but this article limits its analysis to those rules found in the Internal Revenue Code.

All nonprofits should learn the definition of “lobbying” before adopting social media policies for any of its affiliates, including its board members and managers. An organization may engage in “direct lobbying” or “grassroots lobbying.” Organizations directly lobby when they both communicate their viewpoint and request an action from those who draft and/or enact the relevant laws. Organizations engage in “grassroots lobbying” when they both encourage others to communicate a viewpoint and request action from those who draft and/or enact laws.  For example, stating, “Citizens of State X, vote for Ballot Initiative 10 in the next election,” is direct lobbying (because every citizen voting for/against the ballot initiative is a “legislator”); and stating, “Citizens of State X, call Sen. Doe at [phone number] to get them to vote for Bill 10 in the next legislative session,” is grassroots lobbying.

Note, “lobbying” does not include non-partisan, education, and research activities relating to matters of public policy (e.g. a whitepaper on climate change without reference to a specific law or candidate).

If a board member or manager  “lobbies,” as defined above, even on  their personal social media pages (or elsewhere), the charity should consider whether the IRS could interpret that activity to be a “substantial part” of the nonprofit’s overall activities, thereby risking revocation of its 501c3 status. The policies articulated below contemplate a nonprofit subject to the “no substantial part” test referenced above.

No Substantial Part Test

Unfortunately, the IRS and much of the relevant caselaw has not clearly defined when lobbying constitutes a “substantial part” of a nonprofit’s activities. The analysis does include, among other things, time spent by the organization’s board and managers. Thus, organizations should consider:

  1. how managers and board members communicate in social media (both on their own pages and others);
  2. the organization should maintain disclaimers across its social media accounts;
  3. track the time and publicity of political statements made by charity leadership; and
  4. if all this seems confusing, consider the “expenditure test” as an alternative to the “no substantial part” test.

First, organizations should adopt clear policies about how managers and board members interact with others’ posts. This policy should cover leadership interaction on their own pages and on others’ pages.

On their own pages, charity leadership should include, in their bio or other permanent location, a statement that the opinions and statements of the individual manager or board member does not reflect the views of the organization. While the IRS does not automatically attribute every statement made by a manager or board member to an organization, an abundance of caution, in this context, makes sense. Note, even if a board member or manager does not make affirmative political statements, selectively promoting, removing, or commenting upon others’ posts on their own pages may be considered a form of “lobbying.” So, it is advisable to maintain a disclaimer whether that manager or board member plans on commenting upon elections or legislation.

On others’ pages,  a nonprofit’s social media policy should caution or prohibit “liking,” “retweeting,” or supporting political posts or posts with website links, even if they are non-political. Websites are dynamic. So, an apolitical “like” or “retweet” may become political when the owner of the linked site changes the “liked” or “retweeted” page. If a board member or manager feels compelled to engage in political discussions on social media, they should ensure that, in addition to their bio disclaimer, each post has a disclaimer that their statements do not express the views of the nonprofit.

In short, when adopting social media policies for charity leadership, organizations should ensure that board members and managers clearly articulate when they speak for themselves and when they speak for the organization.

Second, because board member and manager statements will be viewed in the context of the organization as a whole under the “no substantial part” test, the organization should also maintain disclaimers across its social media accounts. The disclaimer should state that the opinions or statements made by all charity affiliates (but especially pointing out the leadership) belong to those individuals personally and that no one should attribute them to the nonprofit. If board members and managers make political comments on their own social media pages, the organization should take care when mentioning them on social media to ensure that the organization is not incorporating personal, political views into their organization’s social media.

Third, track all time spent by board members and managers on political issues. If a board member or manager spends a considerable amount of time on social media making political statements, and those statements are attributable to the nonprofit, the organization may come closer to having “lobbying activities” construed as a “substantial part” of their operation.

Fourth, if these policies would be difficult to adopt and/or enforce, consider electing the “expenditure test,” analyzed under IRC § 501h, a viable alternative that has clear cut rules based on a scale directly related to a nonprofit’s total expenditures.

Conclusion

To the extent board members and managers get excited about participating in certain campaigns (electoral or regarding a specific issue), they must have clear boundaries around their personal statements and those made on behalf of the organization.

 

About Culhane Meadows
With nearly 70 partners in ten offices across the country, uniquely structured and cloud-based Culhane Meadows’ (www.culhanemeadows.com), Disruptive Law® business model delivers outstanding, partner-level legal services to major corporations and emerging companies across industry sectors more efficiently and cost-effectively than conventional law firms. Clients enjoy exceptional and highly-efficient legal services provided exclusively by partner-level attorneys with significant experience and training from large law firms or in-house legal departments of respected corporations. Culhane Meadows is a proud member of NAMWOLF.

 

Nonprofit Bylaws Best Practices for Your Group

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Nonprofit Bylaws Best PracticesWhether you’re starting a charity, or reviewing your current nonprofit bylaws, making sure your bylaws address key operating topics is critical. Nonprofit bylaws are documents that help your charity operate with rules and policies. According to the IRS, “Bylaws are an organization’s internal operating rules.” But, while federal law doesn’t ask that nonprofits use special language or topics within their bylaws, that might not be true for the state. Therefore, this article will guide you through the best practices for nonprofit bylaws.

What are nonprofit bylaws?

The first place to begin for nonprofit bylaws best practices is to understand what bylaws are best for your group. As noted, think of bylaws as your operating rules. The best rules do not leave things to chance. In other words, they address essential nonprofit operating issues. Strong nonprofit bylaws detail the number of people who will serve on the board. And, they also speak to the roles and responsibilities of the officers and board members. Other topics included in nonprofit bylaws are the rules for nominating and electing new board members, voting, and how meetings are conducted. Finally, other elements include rules for conflicts of interest and how the bylaws can be changed.

Nonprofit bylaws best practices

Let’s take a look at a few tips to make the process easier for your group.

1. Research sample nonprofit bylaws

When you’re seeking to understand how to write charitable rules, one of the best places to begin is by reviewing sample nonprofit bylaws. Thankfully, there are many great examples of nonprofit bylaws that you can find on the internet. By studying them, you’ll start to know the language and the elements of nonprofit bylaws. For example, one of the critical language issues is understanding when and how to use the words “shall” and “may.”

2. Understand what your state requires

Even though the IRS does not need specific language, your state might. So, it’s a good idea to be familiar with your state’s charity laws. Every state has a nonprofit corporation act, and it provides you with what you’ll need to know about the bylaws. If you don’t feel confident enough to review these state laws, then consider speaking to a lawyer. Alternately, you can also use a service that is expert in nonprofit regulations.

3. Be realistic with your nonprofit

Nonprofit bylaws best practices include realism. For example, one national group changed its bylaws after a financial scandal to ensure all motions had 100 percent board member approvals to pass. While this was a noble effort, it created chaos for the charity after a few years. A better approach is to ensure that you get a reasonable number of board members to approve motions. Remember, you want to have rules, but you don’t want to place your nonprofit into a straight jacket.

4. Nonprofit bylaws and transparency

Because nonprofits are not generally taxed, they hold a special status. As you know, the function of most nonprofits is to improve the lives of people. Thus, the public expects transparency from nonprofit groups, and people donate more when charities are clear in how they work. One of the best ways to be transparent is to make your nonprofit bylaws public. To achieve this, you can ensure your bylaws are published on GuideStar and your website.

5. Review your bylaws regularly

Provided that you develop strong rules, get in the habit of making sure to review them every so often. Keep in mind that your nonprofit is a living and breathing group. And, because of it, it changes—and should. In a couple of years, the chances are that you will have new board members, and technology may even change how you operate. Therefore, make it a point to review your nonprofit bylaws every year at the annual meeting, or bi-annually.

Finally, concerning your nonprofit bylaws, it’s important to know that the IRS requires that you include in your 990 any “structural and operational changes.”

Screening Employees and Volunteers for Child Sexual Abuse Risk: 5 Facts Every Nonprofit Should Know

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Pre Screen Employees and Volunteers“Coach Arrested for Molesting 10 Boys at Soccer Clinic”  screamed a recent media headline in a heavily populated metropolitan area. Unfortunately, this headline is not an anomaly, as headlines detailing child sexual abuse in a nonprofit context occur almost daily. Parents entrust their children to camps, youth sports, after-school care and other non-profit programs across the US, desiring growth and development opportunities for their child. Clearly, an otherwise positive experience is shattered if a child is sexually abused while participating in the program.

The reality is daunting: one in four girls and one in six boys will be sexually abused before reaching the age of 18. Two out of three children don’t disclose abuse until adulthood, if ever. These statistics don’t skip any socioeconomic status, geographic location, type of programming or ethnic or spiritual paradigm. In one large study, the average convicted male abuser who preferred female victims had an average of 52 victims. In the same study, the convicted male abuser who preferred male victims had an average of 150 victims. Where children are gathered for any purpose, the risk of child sexual abuse exists.

To effectively protect children from sexual abuse, child-serving nonprofits must learn to recognize the offender’s grooming process and undertake effective screening processes to weed out offenders, thereby keeping the wolf out of the sheep pen.

Effective screening requires more than a criminal background check.

While background checks have become a standard of care for child-serving nonprofits, they cannot be relied upon as a standalone screening tool. Why? Because less than 10% of sexual abusers will encounter the criminal justice system, ever. More than 90% of abusers have no record to find; and they know it. To top it off, basic background check packages are not nearly as comprehensive as most imagine them to be. The basic background check utilized by many nonprofits has significant limitations and largely incomplete data. Not all records are available, some record sources are not computerized, and some rural counties do not sell records. A criminal background check must be included in the screening process, but it cannot be relied upon to identify the majority of abusers.

Effective screening is rooted in an understanding of the offender’s grooming process.

Sexual offenders come from all segments of society. Sadly, some gain access to children through programming offered by child-serving nonprofits. Abusers groom both children and gatekeepers – trusted adults in a child’s life – to convince them that they are helpful, trustworthy, responsible people. Validated by decades of academic studies, the grooming process of the abuser is known and recognizable. Child-serving nonprofits should evaluate each element of the screening process with a thorough understanding of the abuser’s grooming process, common grooming behaviors and known offender characteristics. As an example, offenders often engage in kid-magnet activities and hobbies which are attractive to children within the offender’s age and gender of preference. If an applicant demonstrates an unusually exclusive interest in activities involving children when asked about interests or hobbies, dig a little deeper into the applicant’s past interaction with children, whether as an employee or volunteer.

Effective screening creates OPT OUT opportunities for applicants with the wrong motive.

Skillful screening incorporates opt out opportunities in the course of the screening process, before the applicant has access to children. When a child-serving organization consistently communicates current child protection practices and protocols, from the beginning, it communicates to the applicant with the wrong motive that ‘it might be easier somewhere else’.  Written policy should clearly state that all suspicions and allegations of child abuse are immediately reported to civil authorities. Applicants should review and sign child protection policies describing inappropriate forms of communication and physical touch. Training should occur before an applicant is interacting with children. Staff members and volunteers should diligently adhere to the Two Adult Rule. These clear expressions provide offenders with an opportunity to self-select out of the screening process.

Effective screening gathers information about the applicant from third party sources.

Many employers ask for references, but don’t check them. Others check references, but fail to ask questions meant to elicit a high risk response. The failure to speak with references about a prospective staff member or volunteer is one of the most common yet detrimental mistakes made by child-serving nonprofits. References represent the only third party source of information commonly available to employers or volunteer supervisors. Beyond the initial consequence of missing helpful information about an applicant, untapped references can ultimately prove to be harmful to the organization, as employers are commonly responsible for information that would have been communicated by a reference, if the reference had been contacted.

Effective screening serves as one element in an effective Safety System.

Preventative protocols to protect children from sexual abuse do not end when an applicant has been thoroughly screened and approved to participate in child-serving programs. Training volunteers, staff members and program leaders to understand the grooming process of the abuser and common grooming behaviors is key, because your organization can’t address a risk that workers don’t understand. Once training has occurred, other Safety System components come into play, including tailored policies and procedures, comprehensive reporting policies, adequate supervision and a system to facilitate and monitor safety practices.

Need help understanding how to get started? Learn how to implement an effective safety system with overlapping layers of protection at AbusePreventionSystems.com.

Planning Your Nonprofit Organization: A Primer on Writing a Nonprofit Business Plan

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Nonprofit Business Plan TemplateIn the corporate jungle, the nonprofit is a very different animal. From its purpose and goals to its bottom line, a nonprofit organization operates in a unique manner, one that is essential to understanding, for successful entry into that specific market niche. Much of the nonprofit business plan is focused on tax issues and compliance (rather than sales and profitability), with such nuances requiring thoughtful and careful planning.

If you are contemplating the formation of a nonprofit entity, research is your best friend, followed by the crafting of a careful business plan — one that clearly states organizational direction. Is forming a nonprofit in your future? Consider the following when writing your nonprofit business plan.

Who

Various types of companies and businesses usually form nonprofits, from educational organizations to religious entities to charities.

What

Many potential Nonprofits apply for, and qualify for, 501c3 status.

Why

The primary benefits to nonprofit classification are, 1) limited liability for certain management team members, and 2) assorted tax breaks.

Additional Benefits

Qualifying 501c3 nonprofit corporations can take advantage of various benefits afforded them. These include, but are not limited to:

  • Federal income tax exemption
  • Public and private grant eligibility
  • Tax-deductible donations
  • Reduced rate postage

Points to Consider

The most obvious difference in designing a nonprofit business plan over a traditional business plan is that the focus is not profit-centric. From Business 101 onward, every business plan was designed to elucidate the path to profitability as the beginning and ending goal. Not so with a nonprofit, which centers almost exclusively on organizational purpose.

A nonprofit’s business plan also has a significantly different target audience — the IRS — with equally different concerns and prerequisites. In order to satisfy the parameters for nonprofit incorporation, it is vital to work with a knowledgeable partner/team in creating a realistic business plan that will provide the best chance for nonprofit acceptance.

As forming a nonprofit is such a specialized undertaking, deferring to a seasoned guide on the developmental steps is imperative to one’s success. A wealth of topics on nonprofit activities, strategies, etc. can be found here: www.incorporate.com/nonprofit_corporation.html

In researching the nonprofit model, it is essential to design a concise business plan. The internet provides a wealth of valuable resources to offer a number of nonprofit business plan templates to use as reference points. Several good examples can be found here: www.bplans.com

Conclusion

The fundamental differences in nonprofit business plans over traditional business plans are numerous, and require careful consideration and review. When dealing with the Federal Government, every “i” must be dotted and “t” must be crossed, then checked and rechecked for conformity to governmental guidelines. Though the prospect of forming a nonprofit may seem initially daunting, the process is not nearly as intimidating as it appears. Armed with the right information, operational strategy, and keen attention to administrative detail, you can establish a nonprofit with minimal problems.

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