Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1...

72
Essential Elements for Nonprofit Board Members Alicia Schatteman, Associate Professor September 26, 2018 1

Transcript of Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1...

Page 1: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Essential Elements for Nonprofit Board Members

Alicia Schatteman Associate Professor

September 26 2018

1

About Me

wwwnonprofitscholarcom

Facebook Nonprofit News to Use

Twitter aschatteman

Blog ldquoRecovering Executive Directorrdquo

LinkedIn

Follow Me

bull 9-915 Introductionsbull 915-945 Main Roles of a Board Member

1 Mission Keeper2 Fiduciary Responsibility3 Planning Ahead4 Connection to the Community ambassador

advocate activist (fundraising)bull 945-1010 Board Policies and Procedures amp

Ethicsbull 1010-1030 QampA

AGENDA

Sustainability vs Resilience

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 2: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

About Me

wwwnonprofitscholarcom

Facebook Nonprofit News to Use

Twitter aschatteman

Blog ldquoRecovering Executive Directorrdquo

LinkedIn

Follow Me

bull 9-915 Introductionsbull 915-945 Main Roles of a Board Member

1 Mission Keeper2 Fiduciary Responsibility3 Planning Ahead4 Connection to the Community ambassador

advocate activist (fundraising)bull 945-1010 Board Policies and Procedures amp

Ethicsbull 1010-1030 QampA

AGENDA

Sustainability vs Resilience

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 3: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

wwwnonprofitscholarcom

Facebook Nonprofit News to Use

Twitter aschatteman

Blog ldquoRecovering Executive Directorrdquo

LinkedIn

Follow Me

bull 9-915 Introductionsbull 915-945 Main Roles of a Board Member

1 Mission Keeper2 Fiduciary Responsibility3 Planning Ahead4 Connection to the Community ambassador

advocate activist (fundraising)bull 945-1010 Board Policies and Procedures amp

Ethicsbull 1010-1030 QampA

AGENDA

Sustainability vs Resilience

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 4: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull 9-915 Introductionsbull 915-945 Main Roles of a Board Member

1 Mission Keeper2 Fiduciary Responsibility3 Planning Ahead4 Connection to the Community ambassador

advocate activist (fundraising)bull 945-1010 Board Policies and Procedures amp

Ethicsbull 1010-1030 QampA

AGENDA

Sustainability vs Resilience

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 5: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sustainability vs Resilience

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 6: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

US Nonprofit Organizations IRS Classifications

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 7: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

6 Key Competencies of Strong Boardsbull Contextual organizations values commitments and purposes in its

workbull Educational all its members are well informed about the

organization its social environment and its internal roles and processes

bull Interpersonal actively attends to the development of the group nurturing the relationships among its members creating a sense of inclusiveness among them setting goals for the group itself and grooming members for positions of leadership

bull Analytic makes use of a variety of problem-analysis methods to understand the challenges the organization faces and to synthesize creative conclusions

bull Political develops and maintains clear communications with the organizationrsquos constituencies

bull Strategic actively engages in visioning and preparing for the future of the organization

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 8: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Lack of understanding of the role of board members

bull Difficult to recruit board membersbull Matching board members interests and

motivations with needs of the organizationbull Ineffective board processesbull Lack of long term organizational planningbull Relationship to executive directorkey staffbull Apathy towards status quo

Challenges to Board Governance

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 9: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Financial Literacy in the Nonprofit Sectorbull ldquoIt has become increasingly important for

nonprofit organizations to have the knowledge and skills that are necessary to apply and use this data for decision-making and benchmarkingrdquo P 5

bull Study of responses from more than 500 nonprofit professionals

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 10: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull 76 consider themselves knowledgeable in financial principles and concepts

bull 17 novices in terms of their level of financial knowledge

bull 69 consider themselves expertsbull Knowledge of

ndash Cash flow projections 75ndash Reporting internal policies to employees 74ndash Debt restructuring 46ndash Collaboration or merger analysis 41

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 11: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Only 393 had a Board audit committeebull 37 had a goal of maintaining a targeted level of

cash reserves and financial flexibilitybull 237 reported that breaking even financially

was a primary financial objectivebull Nearly 49 had less than three months worth

of operating expenses availablebull 264 had 4-6 months

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 12: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Nonprofit Sustainability = ldquothe double bottom linerdquo

Financial EFFICIENCY Program EFFECTIVENESSMissionbull Are we meeting our program

goals and objectives (inputs outputs outcomes)

bull Are we having an impact on our mission

bull How do we measure this

Moneybull Are we managing our resources for

maximum efficiencybull Are we getting enough financial

returnprofitability to continuebull How do we measure this

+

Money Week 2016

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 13: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Governanceis the set of responsibilities that ensures accountability achieves legitimacy with all key internal and external stakeholders and establishes the mission of the organization

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 14: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Nonprofit Governance

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 15: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Staff vs Board

Executive Director = Management

bull Support organizational culturebull Set annual goals and objectives bull Strategic planning input and

implementationbull Performance management

monitoring and reportingbull Fiscal management monitoring

and reportingbull Board policy compliancebull Legal compliancebull Volunteer managementbull Hire supervise and evaluate staff

who reflect the community you serve

Board = Governancebull Create and manage the mission

and vision for the organizationbull Organizational valuesbull Strategic planning input adoption

and implementationbull Investment decisions

infrastructure technology etcbull Performance management goalsbull Fiscal direction and oversight long

term policybull Legal oversightbull Hire and evaluate executive

directorbull Have a balanced and

representative board to reflect the community you serve

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 16: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Types of Volunteer Opportunities

bull Board members or administrative volunteers community members strategic thinking

bull Fundraising volunteers grant writing special events in the community

bull General support in the background responding to organization needs

bull Direct service volunteers work directly with the clients or members of the organization

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 17: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

18

Volunteer Participation by Gender and Age

Source Hart Survey of Volunteers (N=2316)

Under 18 18-29 30-39 40-54 55+

11

89

11

89

13

87

20

80

34

66

0

10

20

30

40

50

60

70

80

90

Men Women

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 18: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Chart26

Men
Women
011
089
011
089
013
087
02
08
034
066

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 19: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet1

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Percent of respondents
13-17 10 12
18-29 34 28
30-44 35 30
45-54 28 21
55-64 26 18
65-74 18 14
75+ 10 8
One of the Most Important Things Very Important Somewhat Important Not Very Important
Under 18 21 42 34 3
18-29 16 50 32 2
30-39 15 54 29 2
40-54 21 52 26 1
55+ 23 52 23 2
Make a difference help others contribute to a cause give back Meet people get involved in community Use my skills Develop skills Fulfill a service requirement
Under 18 65 12 4 15 4
18-29 62 21 6 10 1
30-39 69 18 7 6 0
40-54 70 20 8 2 0
55-64 65 19 13 2 1
65+ 49 21 29 1 0
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Under 18 14 17 31 38
18-29 15 26 24 35
30-39 17 28 27 28
40-54 17 32 24 27
55-64 22 29 23 26
65+ 25 35 14 26
Use career skills Use non-career skills Can be done by most people Learn new skills explore new interests
Women Under 54 15 27 26 32
Women 55+ 15 32 26 27
Men Under 54 23 30 24 23
Men 55+ 36 28 13 23
All Volunteers Volunteers aged 40+
Computers hw and sw 44 51
Operations Project Management 41 48
Medical or Health Services 43 47
Event Planning 40 43
Marketing amp Communications 29 36
Acoounting Finance 27 32
HR Recruiting and Training 26 31
Counseling 24 30
Internet E-Commerce 31 30
Strategic Planning 24 29
Information Technology 22 27
Fundraising Development 26 25
Grant Proposal Writing 11 15
Legal Services 11 13
Staff Management Team Leadership 18 12
Used skill in job Used skill volunteering
Computers hw and sw 51 28
Operations Project Management 48 26
Medical or Health Services 47 34
Event Planning 43 36
Marketing amp Communications 36 18
Acoounting Finance 32 15
HR Recruiting and Training 31 16
Counseling 30 26
Internet E-Commerce 30 16
Strategic Planning 29 16
Information Technology 27 15
Fundraising Development 25 31
Grant Proposal Writing 15 10
Legal Services 13 6
Staff Management Team Leadership 12 27
Computers hw and sw 26 16094 32 11488 27582 02820245399 28
Operations Project Management 29 17951 22 7898 25849 02643047035 26
Medical or Health Services 34 21046 33 11847 32893 03363292434 34
Event Planning 39 24141 31 11129 3527 03606339468 36
Marketing amp Communications 18 11142 18 6462 17604 018 18
Acoounting Finance 14 8666 17 6103 14769 01510122699 15
HR Recruiting and Training 16 9904 16 5744 15648 016 16
Counseling 25 15475 28 10052 25527 02610122699 26
Internet E-Commerce 16 9904 16 5744 15648 016 16
Strategic Planning 16 9904 16 5744 15648 016 16
Information Technology 14 8666 16 5744 1441 01473415133 15
Fundraising Development 34 21046 27 9693 30739 03143047035 31
Grant Proposal Writing 9 5571 11 3949 952 00973415133 10
Legal Services 6 3714 7 2513 6227 00636707566 6
Staff Management Team Leadership 27 16713 28 10052 26765 02736707566 27
VeryFairly Interested Somewhat Interested Not Very Interested
Men 55-64 34 30 34
Men 65-75 27 30 43
Women 55-64 41 25 33
Women 65-75 31 30 37
Data for slide 9 right hand chart
Extrapolated from Table 271 from Hart Non-Volunteer Survey (Multiplied total number in interest level by occupation category)
Professional manager White-collar worker Blue-collar worker Retired Unemployed looking for work Not sure Farmerrancher Student Homemaker
Veryfairly interested 1892 3784 1548 8256 344 172 344 - 86
Somewhat interested 87 29 116 7975 29 435 145 - 725
Not very interested 732 2379 2562 11346 183 183 183 183 549
Total 3494 9063 527 27577 817 79 672 183 2134
VeryFairly Interested Somewhat Interested Not Very Interested
Professional manager 1892 87 732
White-collar worker 3784 29 2379
Blue-collar worker 1548 116 2562
Retired 8256 7975 11346
None 1-3 4-7 8 or more
Less than $50000 26 16 14 34
$50001 to $100000 9 13 13 17
$100001 to $200000 14 13 12 14
$200001 to $500000 15 16 19 17
$500001 to $1 million 16 11 12 8
More than $1 million 20 31 30 10
Great extent Some extent
More information about potential volunteers 39 41
Funding to cover cost of volunteer involvement 42 34
Volunteer coordinator with stipend 45 27
Greater availability of skilled volunteers 29 42
Training in working with volunteers 20 46
Fewer regulatory legal and liability constraints 12 26
55+
Very satisfied 39
Satisfied 43
Neutral 9
Dissatisfied 5
Very dissatisfied 4
More than now 53
Less than now 9
Same 38
Page 20: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet2

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Page 21: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet2

13
53
59
63
69
79
81
82
83
85
90

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Page 22: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet3

11
26
20
27
15
1
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Under 18
18-29
30-39
40-54
55+
Prefer not to state
Page 23: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
23
30
42
53
54
44
47
40
31
32
23
44
30
47
42
40
53
31
54
32
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Allows the organization to free up valuable resources Allows the organization to free up valuable resources
Helps find volunteers who have the needed skills and abilities Helps find volunteers who have the needed skills and abilities
Makes it easier to find the right volunteers Makes it easier to find the right volunteers
Helps reach out and recruit more volunteers Helps reach out and recruit more volunteers
Provides valuable service to the organization Provides valuable service to the organization
Page 24: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
61
55
38
21
061
055
038
021
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Under 40
40-54
55-64
65+
Page 25: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
5
19
25
26
28
31
32
40
42
50
54
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Volunteer with friends
Matches my career skills
Has orientationtraining
Uses my skillsexperience
Intellectually stimulating
Understand expectations
I can make a difference
Nearbyconvenient
Interestingchallenging
Fits my schedule
Cause I care about
Page 26: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Age Groups
10
34
35
28
26
18
10
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
13-17 12
18-29 28
30-44 30
45-54 21
55-64 18
65-74 14
75+ 8
Page 27: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
21
42
34
3
16
50
32
2
15
54
29
2
21
52
26
1
23
52
23
2
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55+ 55+ 55+ 55+
Page 28: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Make a difference help others contribute to a cause give back
Meet people get involved in community
Use my skills
Develop skills
Fulfill a service requirement
65
12
4
15
4
62
21
6
10
1
69
18
7
6
0
70
20
8
2
0
65
19
13
2
1
49
21
29
1
0
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Under 18 Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+ 65+
Page 29: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
14
17
31
38
15
26
24
35
17
28
27
28
17
32
24
27
22
29
23
26
25
35
14
26
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Under 18 Under 18 Under 18 Under 18
18-29 18-29 18-29 18-29
30-39 30-39 30-39 30-39
40-54 40-54 40-54 40-54
55-64 55-64 55-64 55-64
65+ 65+ 65+ 65+
Page 30: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Use career skills
Use non-career skills
Can be done by most people
Learn new skills explore new interests
15
27
26
32
15
32
26
27
23
30
24
23
36
28
13
23
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Women Under 54 Women Under 54 Women Under 54 Women Under 54
Women 55+ Women 55+ Women 55+ Women 55+
Men Under 54 Men Under 54 Men Under 54 Men Under 54
Men 55+ Men 55+ Men 55+ Men 55+
Page 31: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
51
48
466329243354
425316973415
36
32
311646216769
30
302658486708
29
268987730061
25
154683026585
13
12
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Computers hw and sw
Operations Project Management
Medical or Health Services
Event Planning
Marketing amp Communications
Acoounting Finance
HR Recruiting and Training
Counseling
Internet E-Commerce
Strategic Planning
Information Technology
Fundraising Development
Grant Proposal Writing
Legal Services
Staff Management Team Leadership
Page 32: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
282024539877
264304703476
336329243354
36063394683
18
151012269939
16
261012269939
16
16
147341513292
314304703476
97341513292
63670756646
273670756646
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Computers hw and sw 51
Operations Project Management 48
Medical or Health Services 466329243354
Event Planning 425316973415
Marketing amp Communications 36
Acoounting Finance 32
HR Recruiting and Training 311646216769
Counseling 30
Internet E-Commerce 302658486708
Strategic Planning 29
Information Technology 268987730061
Fundraising Development 25
Grant Proposal Writing 154683026585
Legal Services 13
Staff Management Team Leadership 12
Page 33: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Used skill in job
Used skill volunteering
51
282024539877
48
264304703476
466329243354
336329243354
425316973415
36063394683
36
18
32
151012269939
311646216769
16
30
261012269939
302658486708
16
29
16
268987730061
147341513292
25
314304703476
154683026585
97341513292
13
63670756646
12
273670756646
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Computers hw and sw Computers hw and sw
Operations Project Management Operations Project Management
Medical or Health Services Medical or Health Services
Event Planning Event Planning
Marketing amp Communications Marketing amp Communications
Acoounting Finance Acoounting Finance
HR Recruiting and Training HR Recruiting and Training
Counseling Counseling
Internet E-Commerce Internet E-Commerce
Strategic Planning Strategic Planning
Information Technology Information Technology
Fundraising Development Fundraising Development
Grant Proposal Writing Grant Proposal Writing
Legal Services Legal Services
Staff Management Team Leadership Staff Management Team Leadership
Page 34: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
34
30
34
27
30
43
41
25
33
31
30
37
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Men 55-64 Men 55-64 Men 55-64
Men 65-75 Men 65-75 Men 65-75
Women 55-64 Women 55-64 Women 55-64
Women 65-75 Women 65-75 Women 65-75
Page 35: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
VeryFairly Interested
Somewhat Interested
Not Very Interested
VeryFairly Interested
Somewhat Interested
Not Very Interested
1892
87
732
3784
29
2379
1548
116
2562
8256
7975
11346
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Professional manager Professional manager Professional manager
White-collar worker White-collar worker White-collar worker
Blue-collar worker Blue-collar worker Blue-collar worker
Retired Retired Retired
Page 36: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
None
1-3
4-7
8 or more
None
26
16
14
34
9
13
13
17
14
13
12
14
15
16
19
17
16
11
12
8
20
31
30
10
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Less than $50000 Less than $50000 Less than $50000 Less than $50000
$50001 to $100000 $50001 to $100000 $50001 to $100000 $50001 to $100000
$100001 to $200000 $100001 to $200000 $100001 to $200000 $100001 to $200000
$200001 to $500000 $200001 to $500000 $200001 to $500000 $200001 to $500000
$500001 to $1 million $500001 to $1 million $500001 to $1 million $500001 to $1 million
More than $1 million More than $1 million More than $1 million More than $1 million
Page 37: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Great extent
Some extent
39
41
42
34
45
27
29
42
20
46
12
26
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
More information about potential volunteers More information about potential volunteers
Funding to cover cost of volunteer involvement Funding to cover cost of volunteer involvement
Volunteer coordinator with stipend Volunteer coordinator with stipend
Greater availability of skilled volunteers Greater availability of skilled volunteers
Training in working with volunteers Training in working with volunteers
Fewer regulatory legal and liability constraints Fewer regulatory legal and liability constraints
Page 38: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
55+
039
043
009
005
004
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
Page 39: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
53
9
38
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
More than now
Less than now
Same
Page 40: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
Men
Women
011
089
011
089
013
087
02
08
034
066

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Under 18 Under 18
18-29 18-29
30-39 30-39
40-54 40-54
55+ 55+
Page 41: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Page 42: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

19

Important Factors in a Volunteer Experience

Volunteers 55+Volunteers Under 55

users rating each as very importantimportant

0 20 40 60 80 100

Volunteer with friends

Matches my career skills

Has orientationtraining

Intellectually stimulating

Nearbyconvenient

Uses my skillsexperience

Fits my schedule

I can make a difference

Interestingchallenging

Understand expectations

Cause I care about

Source Hart Survey of Volunteers (N=2316)

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Page 43: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Chart3

13
53
59
63
69
79
81
82
83
85
90

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Volunteer with friends
Matches my career skills
Has orientationtraining
Intellectually stimulating
Nearbyconvenient
Uses my skillsexperience
Fits my schedule
I can make a difference
Interestingchallenging
Understand expectations
Cause I care about
Page 44: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet1

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
55+ Under 55 All
Volunteer with friends 13 27 25
Matches my career skills 53 45 47
Has orientationtraining 59 47 49
Intellectually stimulating 63 52 54
Nearbyconvenient 69 75 74
Uses my skillsexperience 79 68 70
Fits my schedule 81 91 89
I can make a difference 82 80 80
Interestingchallenging 83 74 76
Understand expectations 85 78 80
Cause I care about 90 91 91
Under 18 11
18-29 26
30-39 20
40-54 27
55+ 15
Prefer not to state 1
Allows the organization to free up valuable resources 23 44
Helps find volunteers who have the needed skills and abilities 30 47
Makes it easier to find the right volunteers 42 40
Helps reach out and recruit more volunteers 53 31
Provides valuable service to the organization 54 32
Under 18 18-29 30-39 40-54 55+
Men 11 11 13 20 34
Women 89 89 87 80 66
Under 40 61
40-54 55
55-64 38
65+ 21
13 10 11
7 5 4
12 10 10
13 14 13
11 13 8
8 10 13
64 62 59 616666666667
55+ Under 55
Volunteer with friends 5 6
Matches my career skills 19 10
Has orientationtraining 25 11
Uses my skillsexperience 26 11
Intellectually stimulating 28 13
Understand expectations 31 18
I can make a difference 32 24
Nearbyconvenient 40 40
Interestingchallenging 42 21
Fits my schedule 50 64
Cause I care about 54 48
Page 45: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet1

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 46: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet2

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 47: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Sheet3

Men
Women
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 48: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
61
55
38
21
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 49: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering
23
30
42
53
54
44
47
40
31
32

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 50: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 51: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 52: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 53: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

StrengthrsquosAssessment

bull What are the current strengths of the your board

20

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 54: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Weaknesses Assessment

bull What are the weaknesses related to your board

21

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 55: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Board of TrusteesDirectors

An independent boardhellipbull Determines the missionbull Establishes policiesbull Develops program and long term planningbull Sets budgetsbull Provide direct financial contributionsbull Select evaluate and terminate the CEOEDbull Develop links to the community

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 56: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Board Roles

-attend meetings of the board and board committees on which you serve-have general knowledge and understanding of how the organization is functioning and you must have particular knowledge and understanding about the purpose of the organization and the specific responsibilities assigned to you -Absence from meetings and inactivity do not excuse you from legal responsibility

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 57: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Who is responsible for managing riskbull The Board is responsible for understanding

ndash the rules in the organizationndash The risk management processndash How the organizational policies are

communicated and implementedndash Issues such as law litigation compliance

ethics and disclosure

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 58: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Managing Organizational Riskbull Risk areas with Directors and Officers Liability Insurance

doesnrsquot protect you from everything because you still need to ndash Exercise due diligencendash Enforce term limitsndash Properly record board actions in minutesndash Give comprehensive new board member orientationndash Require or enforce board member performance

expectationsndash Provide board members with the requisite data and

background information for informed decisions

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 59: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Board Assessment

bull Assessment is the most effective way to ensure your board members understand their duties and utilize effective good governance practices

bull Assessments move your board and board leaders to the next level of performance

bull Board Source resourcesbull Worksheet Board Self-Assessment

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 60: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

What makes a leader

bull Open honest and forthright in their responses to crises

bull Reflect the values that most stakeholders admirebull Communicate lessons learned

28

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 61: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Hand outbull httpsaskingmatterscombull 3 minute asking style quiz

What type of fundraiser are you

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 62: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Art listening feeling connected to the donors empathy sincerity thanking donors respecting donors

bull Science donor prospect analyzing who to approach (prospect research) keeping careful notes and records (database management) donor recognition

Fundraising An Art AND a Science

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 63: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull William Aramonywas President of United Way of American from 1970-1992

bull He was jailed in 1995 for defrauding the organization of more than $1million

bull Convicted in 1995 on 23 counts of felony charges including conspiracy fraud and filing false tax returns

Scandal for United Way and the Nonprofit Sector

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 64: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Why Confidence in the Nonprofit Sector Has Decreased

Factor Scandals in the sector 73People donrsquot understand the complexity of the sector

48

Nonprofit executivesrsquo salaries 45Low program ratios 12Its much easier to get information on nonprofits today

9

Source Coffman (2006)Money Week 2016

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 65: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Where is the bar

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 66: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Definition of Ethics

Ethics are applying values to a process rather than a rigid determination of right and

wrong

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 67: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Ethics as a Process

bull Ethics is a process by which a decision is made and that process not only uncovers values but also allows you to prioritize them

bull Distinguish between ethical and legal

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 68: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Duty of care board members act like any reasonable person in similar circumstances (diligent attending meetings understanding the issue before decisions)

bull Duty of loyalty act primarily in the interest of the organization not themselves

bull Duty of obedience act according to the law and in accordance of their mission

Board Standards of Conduct

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 69: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Government Regulation

Federal

bull IRS determination and annual filing

bull Employment tax

bull Funding requirements

State

bull Statutes income tax sales tax solicitation

bull Funding requirements

Local

bull Ordinances bull Property taxbull Utility chargesbull Funding

requirements

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 70: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Federal Law Considerations

bull IRS charitable contribution deductions unrelated business income tax noncash gifts donor advised funds

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 71: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Tax-Exempt Status Benefitsbull The benefits of having 501(c)(3) status include

exemption from federal income tax and eligibility to receive tax-deductible charitable contributions

bull Another benefit is that some organizations may be exempt from certain employment taxes

bull An IRS determination of 501(c)(3) status is recognized and accepted for other purposes For example state officials may grant exemption from state income sales and property taxes and the US Postal Service offers reduced postal rates to certain organizations

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 72: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull IRS 990 Information Return self-reported financial data available to the public through Guidestarorg and to researchers through the National Center for Charitable Statistics

View 990 Data

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 73: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Legal name versus ldquodoing business asrdquobull Very public documentbull Board review processbull Current mission statementbull Estimated volunteersbull Accuracy of all numbers from front page to

schedulesbull Allocation of expenses problem

Know your 990

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 74: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull httpswwwirsgovcharities-non-profits

bull Free E-Newsletter The EO (exempt organizations) Update is a periodic newsletter with information for tax-exempt organizations and tax practitioners who represent them

Internal Revenue Service

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 75: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Legal Requirements of the Board

As a board member you have the basic legal and policy responsibility for your not-for-profit organization Even though you are an unpaid volunteer you must1 Be active2 Receive no material profit3 Avoid conflicts of interest4 Exercise judgment in overseeing the organizationrsquos

affairs5 Comply with applicable governmental regulations

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 76: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

State Law Considerations

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 77: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Illinois Requirements

bull Initial registration with Attorney Generalrsquos office (fee)

bull Need to file articles of incorporation (filed with Secretary of State) and bylaws

bull Annual financial report due within six months of fiscal year CPA opinion must accompany report if revenues exceed $300000 (as of January 2010)

bull Fees for late registration or annual report

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 78: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Charitable Organization Laws

1 The Illinois Charitable Trust Act2 Solicitation for Charity Act3 Illinois Criminal Code

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 79: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull State employment lawbull Federal employment lawbull Staff benefitsbull Employment tax collection and submissionbull Payroll managementbull Volunteer managementbull Job descriptions for staff and volunteersbull Liability for staff and volunteers

Need to Know

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 80: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Reasonable Compensation based on size of budget number of employees education and training required market area (cost of living)

Staff Compensation

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 81: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Morris VFW pot at $16 million with the winter taking home 70

bull Game was temporarily shut down after state regulators told VFW and the city they needed a local raffle license

bull No more tickets were sold but the raffle was allowed to conclude

bull Winner announced Kevin Repselsaid he bought 30 tickets $10 for each number

Charity Gaming Law

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 82: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 83: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull The larger the organization the higher the risk for fraud or other ethical violations

bull Policies prevent fraud and ethical violationsbull The staff makes sure the organization is

protected

Myths

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 84: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

When a Nonprofit Chooses to Close

bull Indicate on final IRS 990bull The state must be notified that the organization

plans to dissolvebull All charitable assets have to be given to another

nonprofit organization (or returned to the donor if alive)

bull The board has the responsibility for all finances during their tenure on the Board and in the case of dissolving that nonprofit

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 85: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Code of ethicsbull Conflict of interest policybull Document retention policiesbull Ethical fundraising practicesbull Ethical leadershipbull Financial transparencybull Internal controlsbull Public disclosure policy- State laws may

independently require nonprofits to disclose various documents to the public

bull Whistleblower protection policies

In Practice

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 86: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Know your risksbull Have a communications plan to address a crisisbull Review and update any policies concerning privacy

of clients employees etcbull Have open and frequent discussions about ethics

what your organization stands forbull Model high ethical standards for staff board

members and staffbull Be transparent in all you dobull Admit when something goes wrong and work openly

to fix it

What you can do

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 87: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Types of Reporting

Mandatory Voluntary

External

Internal

Audited Financial Statements

Annual Report

IRS 990Audited Financial Statements

Budgets

Strategic Plans

Strategic Plans

Board Minutes

Performance Data Reports

WebsiteAds

Meetings

61

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 88: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

The Nonprofit Accountability Climate

bull Government more regulationbull Self-regulation accountability clubs standards

and codes within the sector and within sub-sectors

bull Public call for transparency accountability effectiveness

bull ldquoFuzzyrdquo definitions of nonprofits partnerships contractual relationships social-entrepreneurs quasi-public quasi-nonprofits

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 89: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Charity Watchdogs

bull Guidestarwwwguidestarorgbull BBB Wise Giving Alliance Standards for Charitable

Accountabilitybull Charity Navigator Charity Navigator Ratingsbull Standards for Excellence Institute Standards for

Excellence An Ethics and Accountability Code for the Nonprofit Sector

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 90: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull BoardSourceoffers Downloadable Policy Samplers in 10 different topic areas to help you create specific policies

bull Publication Date 2013$ 1325- Member Price$ 1950- Nonmember Price

bull The Ethics and Accountability Sampler includes 46 samples on the followingndash Mission and Visionndash Valuesndash Code of Ethicsndash Diversity Statementndash Conflicts of Interestndash Confidentialityndash Whistleblower Protectionndash Record Retention and Document Destruction

Board Source

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 91: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

AFP Code of Ethical Standards

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 92: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

The Donor Bill of Rightsbull To be informed of the mission and how funds will

be usedbull To be informed of who the board is and expect the

board to be responsiblebull To have access to financial statementsbull Assurance that gifts are used for the purposes for

which they are givenbull To receive appropriate acknowledgement and

recognition

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 93: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull To be assured of confidentiality and respectbull To expect professional relationshipsbull To be informed whether solicitors are volunteers

staff or hired solicitorsbull To have the opportunity of anonymity and to be

deleted from ldquolistsrdquobull Ability to ask questions and receive prompt and

truthful answers

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 94: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

Ethical Fundraising and Financial Accountability Code

Elements of the CodeDonorrsquos rightsFundraising practicesFinancial accountability

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 95: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

My Book Recommendations

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 96: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Doing Good Podcastbull Social Good Instigatorsbull Nonprofits are Messy Joan Garrybull Nonprofit Hub Radio

Podcast Recommendations

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 97: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

bull Mission Drift and Strategic Planning for Nonprofits October 10

bull Fundraising Strategies for Nonprofit Staff and Board Members November 28

Upcoming Workshops

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom
Page 98: Alicia Schatteman, Associate Professor...Alicia Schatteman, Associate Professor September 26, 2018 1 About Me Facebook: Nonprofit News to Use Twitter: @aschatteman Blog: “Recovering

wwwnonprofitscholarcom

Alicia SchattemanAssociate Professor

Center for Nonprofit and NGO StudiesDepartment of Public Administration

Northern Illinois UniversityDeKalb Illinois815-753-0942

aschattemanniuedu

  • Essential Elements for Nonprofit Board Members
  • About Me
  • Follow Me
  • AGENDA
  • Sustainability vs Resilience
  • Slide Number 6
  • Slide Number 7
  • 6 Key Competencies of Strong Boards
  • Challenges to Board Governance
  • Financial Literacy in the Nonprofit Sector
  • Slide Number 11
  • Slide Number 12
  • Nonprofit Sustainability = ldquothe double bottom linerdquo
  • Slide Number 14
  • Nonprofit Governance
  • Staff vs Board
  • Types of Volunteer Opportunities
  • Slide Number 18
  • Important Factors in a Volunteer Experience
  • Strengthrsquos
  • Weaknesses
  • Board of TrusteesDirectors
  • Board Roles
  • Who is responsible for managing risk
  • Slide Number 25
  • Managing Organizational Risk
  • Board Assessment
  • What makes a leader
  • What type of fundraiser are you
  • Fundraising An Art AND a Science
  • Scandal for United Way and the Nonprofit Sector
  • Slide Number 32
  • Slide Number 33
  • Slide Number 34
  • Why Confidence in the Nonprofit Sector Has Decreased
  • Where is the bar
  • Definition of Ethics
  • Ethics as a Process
  • Slide Number 39
  • Slide Number 40
  • Board Standards of Conduct
  • Government Regulation
  • Federal Law Considerations
  • Tax-Exempt Status Benefits
  • View 990 Data
  • Know your 990
  • Internal Revenue Service
  • Legal Requirements of the Board
  • State Law Considerations
  • Illinois Requirements
  • Charitable Organization Laws
  • Need to Know
  • Staff Compensation
  • Charity Gaming Law
  • The Nonprofit Accountability Climate
  • Myths
  • When a Nonprofit Chooses to Close
  • Slide Number 58
  • In Practice
  • What you can do
  • Slide Number 61
  • The Nonprofit Accountability Climate
  • Charity Watchdogs
  • Board Source
  • AFP Code of Ethical Standards
  • The Donor Bill of Rights
  • Slide Number 67
  • Ethical Fundraising and Financial Accountability Code
  • My Book Recommendations
  • Podcast Recommendations
  • Upcoming Workshops
  • wwwnonprofitscholarcom