What Do Nonprofit Boards Do?

The first questions nonprofit founders often ask are, “Why do I need a board of directors? What does a board do?” In fact, the nonprofit board of directors is a critical element in the success of a new—or any—nonprofit organization.

The next session of the Legal Center for Nonprofits’ Nonprofit Start-up Series, on Tuesday, October 28 at 6:00 pm, will provide an overview of what nonprofit boards of directors do, the key role the board plays in the nonprofit organization as it oversees the nonprofit’s programs and activities, and the board’s fiduciary duties to the nonprofit. We will also consider what happens if boards fail to carry out these duties and responsibilities. Call (508) 264-5996 or email Linnea@LegalCenterforNonprofits.org for more information or to register.

This is the third session in the Nonprofit Start-up Series. Future sessions will consider tax-exempt status—what it means and how to get it. Start-up Series sessions are presented bi-weekly on Tuesdays; future sessions will be held on November 18, and December 2. All series sessions are at 6:00 pm at the Legal Center for Nonprofits office inside the Inter-Church Council house, 412 County Street, New Bedford, MA.

The Legal Center for Nonprofits, Inc., is a Massachusetts nonprofit corporation with a mission to provide educational programming for the nonprofit community. Visit www.LegalCenterforNonprofits.org for more information about our programs.

Learn About Incorporation & Bylaws!

Incorporation is often the first concrete step on the path to creating a nonprofit, tax-exempt organization. But is it the right step for your organization? Do you even need to incorporate? Can you afford to skip this step?

Incorporation is more than just filling out an online form. Nonprofit founders must understand what the answers to the form’s questions mean and how they might affect the nonprofit’s future and its ability to become tax-exempt. And what about bylaws? Find out about these important documents at the next program from the Legal Center for Nonprofits, on Tuesday, October 14, at 6:00 pm, at the Legal Center for Nonprofits, 412 County Street, New Bedford (inside the Inter-Church Council house). Admission for this program is $10, payable at the door. Space is limited. Pre-registration is recommended. To register, contact Attorney Linnea Michel at (508) 264-5996 or email Linnea@LegalCenterforNonprofits.org.

This is the second session in the Nonprofit Start-up Series. Future sessions will cover the role of the board of directors, and how to seek tax-exempt status for your organization. Start-up Series sessions are presented bi-weekly on Tuesdays; future sessions will be held on October 28, November 18, and December 2. All series sessions are at 6:00 pm.

 

Changed Dates for Start-up Series!

The Nonprofit Start-up Series will get underway on Tuesday, September 30!  Please note that we’re returning on Tuesday nights!  This schedule change has been necessitated by a scheduling conflict.

Nonprofit Start-up Series Gets Underway September 17

The imminent arrival of Fall means back to school, and back to learning about nonprofit organizations!

Join us on Wednesday, September 17, for the first in our series, “Before You Begin”.  You’ll learn what it takes to start a nonprofit.

Following sessions will take you through the entire formation process.

Hope to see you in September!

 

Robert’s Rules Not Needed

From time to time when working through bylaws with a client, someone will say, “Shouldn’t we put something in about Robert’s Rules? Don’t we need to use them?”  To which I will usually reply, “No.”

Robert’s Rules of Order was written by Brigadier General Henry Martyn Robert in 1876, right here in New Bedford, at the First Baptist Church on William Street.  Gen. Robert felt compelled to write the Rules allegedly because he had failed miserably in leading a meeting at the church.

A couple of principles underlie Robert’s Rules.

First is the idea of control.  The Rules are intended to allow the Chair to control a meeting, to lead it.  We’ve all been in meetings that have devolved into free-for-alls with everyone talking at once.  The Rules allow the Chair to conduct the meeting much as an orchestra conductor does the orchestra, mellowing the louder strident voices, bringing forward the softer notes.

Another key idea is that of deliberation. The Rules are intended to enable a Board–a “deliberative assembly”– to conduct an efficient meeting; the idea is to allow for evaluation of information and opinion, while ensuring that all pertinent views are heard; the result is that decisions on matters simple to complex can be made efficiently.   The law values this deliberation highly–this is why boards must meet and act together, and why all directors must be able to hear each other in a meeting. The Chair must foster this deliberation through his or her control of the meeting, ensuring that all those who have something to say pertinent to the decision at hand may speak and be heard.

Robert’s Rules are just that–rules.  The book is over 600 pages long.  Robert set out to provide a few rules by which to conduct an efficient meeting, but the project soon took on a life of its own, as questions arose and were answered. Today, a number of shorter versions are available–”cheat sheets” and quick reference sheets, along with the official Robert’s Rules of Order Newly Revised In Brief, which itself runs to about 200 pages.

And that is the problem.  The Rules are complex, and they must be thoroughly understood to be effective.  Unless your organization has someone willing to serve as Parliamentarian and to master the minutiae, the Rules are likely to be more burdensome to your organization than helpful, more time-consuming than time-efficient.

The typical nonprofit board of directors with its 7 to 15 directors does not need Robert’s Rules.  Instead, I propose the following points:

  • Choose a Chair who can maintain firm control of a meeting; that is, someone who is willing and able to ask the long-winded directors to stop speaking so the more reticent can get a word in edgewise, as well as to methodically invite those reticent souls to speak to the issue.
  • Lay down basic values: that participation is required, that all comments on topic are valued, that each director must respect the rights of the other directors to have their opinions and to voice them, that meetings will be civil and courteous. Your board will likely find a few key values of its own.  Put them in writing and adopt them, or ask all board members to sign off on them as part of their orientation to the board.
  • Develop a simple protocol that works for your board: No one speaks unless recognized by the Chair; everyone with a pertinent comment on the issue will be allowed to speak; no one will speak for more than 3 minutes at any one time (or however long is appropriate to your board, depending on its size, time allotted for meetings, and the like); etc.  Again, adopt it and include it in orientation materials.
  • Require that motions be stated as simply and precisely as possible, and that they are repeated as needed, to facilitate discussion and for the Secretary to accurately capture them.
  • Eliminate lengthy reports; provide them instead in writing to directors prior to the meeting.  If everyone has read the reports prior to the meeting, the board can cut to the chase and discuss the issues that need action.
  • Set expectations. That everyone comes to the meeting, and comes prepared –to speak, listen, debate, and decide.

This is not to say that your organization will never need Robert’s Rules–it might.  If your organization finds itself continuing to update, revise, and tweak its self-created protocol because none of its rules covers quite every situation, if meetings still get out of hand such that decision-making suffers, it may be time to try Robert’s Rules.  Study them.  Test them at several meetings.  But don’t add them to your bylaws until your organization is willing and ready to commit to them.

Latest News from IRS on Tax-exempt Status Applications

I just returned from Washington DC where I attended Representing & Managing Tax-exempt Organizations, the annual nonprofit law conference presented by Georgetown University Law School.  This conference is always interesting as it brings together many nonprofit law luminaries, but it is also eagerly looked forward to because the IRS Exempt Organizations Director always presents the first session on the first day, offering news about IRS activities relating to tax-exempt organizations.

Tamera Ripperda was introduced as the new Director of IRS’s Exempt Organizations Division—she has been in the job just since January this year.  She began by acknowledging the lengthy wait time for determination letters, but then offered context for the wait.  On average, IRS receives 60,000 applications per year for exempt status.  This has been compounded by automatic revocation—organizations that have been automatically revoked must reapply for recognition as tax-exempt, and as a result, in the period 2011-2013, applications have been averaging 80,000 per year.  At the moment, IRS has 10,000 applications for reinstatement in hand.  Of the applications “in inventory” right now, 15% are over a year old.  Receipt of applications outpaces closure of cases.

Ripperda, however, brought some good news, stating that IRS is focusing on closing out the old applications ahead of the new, and expects that all of the old applications will receive a determination by this summer.  The goal is to achieve a 9-month turnaround for all applications—a vast improvement from the current 12 to 18-month wait, but still a far cry from the good ole days when the turnaround was 4 months.

Ripperda also discussed the new IRS Form 1023-EZ, that is expected to help ease the determination crunch by providing a much simplified process  for smaller nonprofits meeting specific criteria. Planned to be fully operational this summer, Ripperda said she anticipates 70% of applicants should be able to use it,  and it will significantly reduce the burden on smaller organizations.  At the same time, however, she alluded to a “back-end review process” IRS will use to look at compliance of those organizations using the 1023-EZ.

An eligibility worksheet will help nonprofits determine whether they  can usethe 1023-EZ.  The form itself will include self-attestations as to annual gross receipts, organizational structure, nature of activities, and the like. It can only be filed electronically, and will be automatically rejected if it is incomplete or the user fee is incorrect—this by itself will save IRS an enormous amount of time.

I will have more to say about the rest of the two-day conference, as well as a first take on 1023-EZ.  Stay tuned!

More snow! Program cancelled!

Since we are under a Winter Storm Watch for tomorrow evening into Wednesday, and the snow is expected to start some time between 4:00 and 8:00 pm, our program for tomorrow evening (3/25), “Is it a Charity?” is cancelled.

Plan to join us for one of our upcoming programs:

April 8 – Getting Tax-exempt, 6:00 pm here; all about the Form 1023. ($5 pp)

April 10–Nonprofit Board Roles & Responsibilities, with the Community Foundation of Southeastern MA;  go here for details.

April 16–Nonprofit Start-up Group, 6:00 pm here; our free drop-in networking & info-sharing group. ($5 pp)

April 17–Nonprofit Annual Filings: What to File & When; 8:30 am. ($5 pp)

 

Getting the Right People for the First Board of Directors

When you begin to think about forming a nonprofit organization, one of the first things to consider is the people you will need to help you, and most importantly, the people who will work with you from the beginning, who most likely will evolve into your board of directors.

Nonprofit organizations are required by law to have boards of directors, who are charged with fiduciary duties of care and loyalty to the organization, and who have oversight over the entire operation of the nonprofit.

For most small start-ups, the first board of directors may not meet the textbook ideal.  Your first board may consist of you and a couple of friends and maybe a work colleague or two, if you’re lucky enough to have that many people at the outset.  Many boards start off with a husband and wife and a friend or another couple.  And while this initial group may be passionate and committed to the work of the organization, board development must not stop here.  More minds and hands will be needed, analytical thinkers, able—and willing—to ask the hard questions as the nonprofit grows and develops.

As you think about your nonprofit, you might begin by thinking, “Who do I know with deep pockets?”  But that isn’t the best place to start. Instead, think about the skills and abilities the nonprofit’s formation and operation will demand.  For example (and this is certainly not an exhaustive list):

  • Persistence, detail-orientation, zeal
  • “People skills”, entrepreneurship
  • Math skills, financial, bookkeeping, Excel
  • Time management, project management, organizational, planning
  • Persuasion, fundraising, sales
  • Supervisory, personnel/human resource management
  • Verbal, writing, communication
  • Technical, computers, email, word processing, spreadsheets, social media
  • Subject matter expertise

Do you have all these skills, personally?  Probably not; none of us have all of them.  But the Board of Directors—as a whole— needs to have all of them.

The question I am asked most often (after “Do you do grant-writing?”) is “How do I get board members?”  How do you find people with the skills you need?

Talk to people.  Board recruitment, at its most basic, starts with talking to everyone you know.  Notice those for whom your idea seems to click.  Don’t invite these people onto your board immediately.  Instead, start a list, noting the skills you believe they would bring to your organization.  Then follow up with them, invite them to coffee “for an update” or “to tell you more about what I’m thinking”.

Of course, much more must be done to recruit—and keep on recruiting—good board members, and indeed, entire books have been written on the topic.

One way to find both board members and volunteers is through posting your organization’s needs online.  For example, here in SouthCoast, through the region’s United Way agencies, you can post both your organizations volunteer needs and your activities.  Check out Volunteer SouthCoast here.

Once you’ve connected with people who might be good board members, you—or your present board, if it exists yet—should develop a process, rather like a job recruitment process, to get to know prospective board members better; this is especially important if neither you nor your current board members know the person well.  This might include a formal meeting, asking for a resume, maybe a questionnaire; it also might include having the prospective board member join a committee or help with a project, both good ways to assess a person’s fit with your organization. Only when you’re satisfied that the person will be a good addition to your board should you (or your board) invite him or her to join you.

While the need for board members may be critical, it’s important to move slowly, to ensure good fit and commitment—after all, this is someone you hope to be working with for a long time!

If you would like to learn more about boards of directors, I will be talking about nonprofit board governance at following upcoming programs :

  • Tuesday, March 18, at the Fall River Boys & Girls Club, 6:00 pm
  • Thursday, April 10, at the Waypoint Event Center, New Bedford, with Craig Dutra of the Community Foundation of Southeastern Massachusetts, 5:30 pm. Click here for more info.
  • Tuesday, April 22, at the Legal Center for Nonprofits, New Bedford, part of the Nonprofit Start-up Series, 6:00 pm. Click here for more info.

Amazing Energy at “Weaving Community” Networking Event

On the last Tuesday evening in January, I braved the bitter cold and threatened snow to wander over to what proved to be the most amazing event I’ve been to in a long time.  Informed the day before that it would be “speed networking”, and being a little old for the “speed dating” scene, I had no idea what it would be like, and indeed, I went with some trepidation.

The event, called “Weaving Community: A Sharing, Connecting and Networking Event”, was sponsored by the United Way of Greater New Bedford’s Community Building Mini-Grants Program as an opportunity for current and past Mini Grant recipients to come together and learn about each other’s programs, with a hope of sparking a few collaborations as well.  I was invited, though not a Mini Grants recipient, because of the Legal Center for Nonprofits’ work helping birth new nonprofits.  Claudia Kirk, the Mini Grants program director, told me that many of her grant recipients were on the cusp, considering whether to formalize their organizations.

I wasn’t the only one braving the cold that night!  Claudia welcomed a roomful of us to the Parish Hall of Grace Episcopal Church.  (Grace Church’s Sunday Breakfast for the Homeless is a Mini Grants recipient.)  After a few words of welcome and some announcements, Claudia turned us over to Brian Pastori, a staffmember with a Mini Grants program founding partner, the Community Economic Development Center of Southeastern Massachusetts. He quickly laid out the ground rules—those of us seated on the outside of the U-shaped table arrangement would stay seated, while those on the inside would move to the next chair every 5 minutes; each facing pair would take turns—2 minutes each to explain to each other what our organizations do, with a minute to talk together about possible collaboration.

Quite a clamor erupted with these instructions, but Brian didn’t give us time to fuss and worry.  We just got right down to it.  Nonprofit people are passionate about their missions and organizations, and I can’t remember ever meeting one who was speechless when asked, “What do you do?”  This night was no exception.

At Brian’s signal, the room quickly erupted once we got past that awkward first second or two—“Who talks first?”  Our nonprofit energy simply took over.  A strange kind of Zen sensation emerged, perhaps because we were so deeply in the moment, focused on what the other person was saying, shutting out the noise around us. It felt as though time expanded, allowing us plenty of time to give our little spiels.  But when the timer sounded the signal to move, time abruptly collapsed, and I thought, “Already?”

I met 7 new people I’d never met before, and learned about some fascinating grassroots efforts happening right now in New Bedford—for example, Bus Riders United is working on improving bus transportation in the Greater New Bedford region; the Coalition for Clean Air is working on helping the town of Somerset cope with the closure of its power plants; and Voices for a Healthy SouthCoast is working on making SouthCoast more amenable to bicycling.

All of the programs represented at the Weaving Community event are involved in the Mini Grants program, as either past or current recipients. Mini Grants recipients are all-volunteer organizations  with budgets less than $25,000, and their projects are small-scale, with a goal to improve the local community.  Projects can be continuing year-long, or they can be one-time special events. Claudia explained that proposals for 2014 grants will be due later this spring.

“The Community Building Mini-Grants Program strives to build a vibrant and stronger community by working together one project at a time,” Claudia says. “We continue to be the only local comprehensive program to administer, promote and support the capacity of the grassroots all-volunteer community.”  Her statistics tell the story:   Since 1995, 587 mini-grants have been awarded to 343 all-volunteer groups for projects that raise the quality of life, increase civic engagement and develop people who are making a difference in our community. In 2013, 37 groups received a total of $33,000.

And to be sure, they brought their vibrancy to that room on Tuesday night.

By the way, visit here to see how other nonprofits are creatively using speed networking.

For more about United Way of Greater New Bedford’s Mini Grants program, visit here.

 

New Drop-in Program for Nonprofit Start-ups

Starting a nonprofit organization can be daunting, with so many legal requirements and forms and filings, in addition to just getting the organization’s activities up and running.  It can leave a founder feeling isolated and uncertain which way to jump next.

But founders don’t have to go it alone any longer.  Join the Nonprofit Start-up Group, a new free monthly program from the Legal Center for Nonprofits, starting Wednesday, February 12, at 6:00 pm.  Get started networking with other nonprofit founders, share information and experience, and support each other.  Whether you’ve already formed a nonprofit, joined the board of a newly formed nonprofit, or simply want to find out more about what’s involved, the Nonprofit Start-up Group is the place to meet others who have been through the experience of starting a nonprofit organization.

At this first meeting, attendees will plan the schedule for future meetings.  This is an information and networking event; no legal advice specific to attendees’ situations will be given.

The group’s facilitator is Elizabeth Pollin, Esq., an attorney, BCC instructor, and small business woman who is also a founding board member of the Youth Investment Foundation, Inc.

The Nonprofit Start-up Group will meet at the Legal Center for Nonprofits office inside the Inter-Church Council house at 412 County Street, New Bedford.  Preregistration is recommended.  Contact Linnea Michel, Esq., at (508) 264-5996 or by email to Linnea@LegalCenterforNonprofits.org, for information or to preregister.