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nonprofit [2017/07/19 11:37] amycsjnonprofit [2023/06/30 15:16] (current) – external edit 127.0.0.1
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 ====== Establishing and Running A Nonprofit ====== ====== Establishing and Running A Nonprofit ======
   * Nonprofit Law and Consultation   * Nonprofit Law and Consultation
-  * Amy Hereford – JD, PhD+  * Amy Hereford – JD, JCD/PhD
   * 6400 Minnesota Ave – Saint Louis, MO 63111   * 6400 Minnesota Ave – Saint Louis, MO 63111
   * 314-972-4763 – amyhereford@gmail.com   * 314-972-4763 – amyhereford@gmail.com
 +  * (c) [[http://www.ahereford.org]]
  
 ---- ----
  
-Introduction+**Introduction**
   * Research and Planning   * Research and Planning
   * Assemble Resources   * Assemble Resources
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 ---- ----
  
-Business Plan+**Business Plan**
   * The Mission Statement   * The Mission Statement
   * Important dates in beginning the business   * Important dates in beginning the business
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 ----- -----
  
-Business Plan - Needs Analysis+**Business Plan - Needs Analysis**
   * Define Market Segment   * Define Market Segment
     * Clearly define client/customer base     * Clearly define client/customer base
Line 44: Line 45:
 ---- ----
  
-n-2-n Neighbor to Neighbor+**n-2-n Neighbor to Neighbor**
   * Needs: Many of our elderly residents need simple assistance in their homes, cleaning, shopping, yardwork, etc. Some also need simple companionship and primary caregivers need respite assistance. Others with handicaps or temporary medical needs may also benefit.   * Needs: Many of our elderly residents need simple assistance in their homes, cleaning, shopping, yardwork, etc. Some also need simple companionship and primary caregivers need respite assistance. Others with handicaps or temporary medical needs may also benefit.
   * Scope of Need: In our town of 30,000, we estimate 1,500 households would benefit from some sort of assistance.   * Scope of Need: In our town of 30,000, we estimate 1,500 households would benefit from some sort of assistance.
Line 51: Line 52:
 ---- ----
  
-Business Plan – Organization Description+**Business Plan – Organization Description**
   * Overview of organization’s plan to meet the needs identified above   * Overview of organization’s plan to meet the needs identified above
   * Identify goods and services and describe how they will be provided   * Identify goods and services and describe how they will be provided
Line 60: Line 61:
 ---- ----
  
-Business Plan – Communication and Development+**Business Plan – Communication and Development**
   * Communication   * Communication
     * Create communication plan     * Create communication plan
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 ---- ----
  
-Business Plan – Financials+**Business Plan – Financials**
   * Financial Statements to Date   * Financial Statements to Date
   * Budget for start-up   * Budget for start-up
Line 83: Line 84:
  
 ---- ----
-Business Plan – Appendices+**Business Plan – Appendices**
   * Resumes of key managers   * Resumes of key managers
   * List of Services   * List of Services
Line 113: Line 114:
 ---- ----
  
-Assemble Resources+**Assemble Resources**
   * Based on Research and Planning   * Based on Research and Planning
   * Board Members   * Board Members
Line 124: Line 125:
 ---- ----
  
-Crowdfunding+**Crowdfunding**
   * Internet-facilitated fundraising   * Internet-facilitated fundraising
   * Tax Laws still apply   * Tax Laws still apply
   * Charitable Solicitation Laws still apply   * Charitable Solicitation Laws still apply
 +    * [[https://ago.mo.gov/civil-division/consumer/business-registrations/charitable-organizations-professional-fundraisers]]
   * Take account of costs and fees (3-15%)   * Take account of costs and fees (3-15%)
   * Equity, Loan, Gift   * Equity, Loan, Gift
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       * An attorney familiar with nonprofit law is an indispensable help in successfully meeting all these demands       * An attorney familiar with nonprofit law is an indispensable help in successfully meeting all these demands
     * File Articles of Incorporation and draft Bylaws.     * File Articles of Incorporation and draft Bylaws.
-    * Apply for Federal Tax ID number and Federal Tax Exempt status.+    * Apply for Federal Tax ID number and Federal Tax Exempt status. FREE 
 +    * [[https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online]]
  
 |  Articles of Incorporation  |  Bylaws  |  EIN SS-4  |  Tax Exemption Form 1023  | |  Articles of Incorporation  |  Bylaws  |  EIN SS-4  |  Tax Exemption Form 1023  |
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 ---- ----
  
-Articles of Incorporation and Bylaws+**Articles of Incorporation and Bylaws**
   * Articles of Incorporation   * Articles of Incorporation
     * Gives the organization a separate legal existence     * Gives the organization a separate legal existence
     * Filed with Secretary of State     * Filed with Secretary of State
     * Generally a fill in form, but care must be taken in drafting purpose clauses     * Generally a fill in form, but care must be taken in drafting purpose clauses
 +  * [[https://www.sos.mo.gov/business/corporations/forms.asp]] 
 +  * [[https://www.sos.mo.gov/CMSImages/Business/corp52.pdf?v=2]] 
 +  * Purpose and Dissolution - required language: [[https://www.irs.gov/charities-non-profits/suggested-language-for-corporations-and-associations]]
 ---- ----
  
-Bylaws+**Bylaws**
   * Internal regulation of the organization   * Internal regulation of the organization
   * Governance: Members and Directors   * Governance: Members and Directors
Line 172: Line 177:
   * Role and responsibilities of the Board   * Role and responsibilities of the Board
   * Meaningful oversight of staff – purposes, activities, financials   * Meaningful oversight of staff – purposes, activities, financials
-  * Amendment and Dissolution+  * Amendment and Dissolution - repeat required lanuage regarding purpose and dissolution.
  
  
 ---- ----
  
-Tax ID number+**Tax ID number** 
 +  * EIN
   * Form SS-4   * Form SS-4
   * Easy Application   * Easy Application
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     * Tax exempt filing     * Tax exempt filing
     * Employment taxes     * Employment taxes
 +  * [[https://www.irs.gov/site-index-search?search=ein&field_pup_historical_1=1&field_pup_historical=1]]
  
 ===== Federal Tax Exemption Application ===== ===== Federal Tax Exemption Application =====
  
-Form 1023+**Form 1023**
   * Part I Identification of Applicant   * Part I Identification of Applicant
   * Part II Organizational Structure   * Part II Organizational Structure
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   * Part XI User Fee   * Part XI User Fee
   * Supporting Schedules   * Supporting Schedules
 +  * [[https://www.irs.gov/pub/irs-pdf/f1023i.pdf]]
  
  
 ---- ----
  
-Form 1023-EZ +**Form 1023-EZ** 
-  * Brand new form+  * Form introduced 2014
   * Simplified application process for smaller organizations   * Simplified application process for smaller organizations
   * Only 3 pages long!   * Only 3 pages long!
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 ---- ----
- +**Form 1023-EZ**
-Form 1023-EZ+
   * requires organizations to:   * requires organizations to:
-    * Certify that organizing document complies with 501(c)(3)+    * Certify that organizing document complies with 501c3
     * Certify that organization will not engage in prohibited activities     * Certify that organization will not engage in prohibited activities
     * Provide names/addresses of officers/directors     * Provide names/addresses of officers/directors
   * Remember: Approved Forms 1023-EZ are open to public inspection   * Remember: Approved Forms 1023-EZ are open to public inspection
   * Don’t Forget to Pay the User Fee!   * Don’t Forget to Pay the User Fee!
-    Reduced 7/1/2016: $400 to $275+  [[https://www.irs.gov/forms-pubs/about-form-1023-ez]] 
 + 
 +|Application Type |User Fee| 
 +|Form 1023|$600| 
 +|Form 1023-EZ|$275
 +|Group exemption letter|$2,000| 
 + 
     * Must be paid through www.pay.gov     * Must be paid through www.pay.gov
   * Approval of your application is not guaranteed   * Approval of your application is not guaranteed
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 ---- ----
  
-Form 1023-EZ +**Form 1023-EZ** 
-  * for smaller organizations seeking 501(c)(3) status who do not have any of the following characteristics:+  * for smaller organizations seeking 501c3 status who do not have any of the following characteristics:
     * Annual gross receipts >$50k     * Annual gross receipts >$50k
     * Total assets >$250,000     * Total assets >$250,000
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 ---- ----
- +**Reduction in 'Inventory'**
-Reduction in 'Inventory'+
   * Reduced cases more than 270 days old by 91%   * Reduced cases more than 270 days old by 91%
   * From 54,564 (in 4/14) to 4,791 (in 9/14)   * From 54,564 (in 4/14) to 4,791 (in 9/14)
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   * Tax due on Unrelated Business Income – reported on Form 990-T   * Tax due on Unrelated Business Income – reported on Form 990-T
   * Information Return   * Information Return
 +  * 990N [[https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard]]
 +  * 990 & 990-EZ [[https://efile.form990.org/]]
  
 ---- ----
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 ===== Ethics ===== ===== Ethics =====
-Establish a Conflict of Interest Policy+**Establish a Conflict of Interest Policy**
   * Define Interested Persons   * Define Interested Persons
   * Anyone who stands to benefit from a decision   * Anyone who stands to benefit from a decision
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 ---- ----
  
-Nonprofit Ethics+**Nonprofit Ethics**
   * Provide meaningful financial oversight by board   * Provide meaningful financial oversight by board
   * Financial literacy training for board members   * Financial literacy training for board members
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 ---- ----
  
-Develop a Corporate Record-keeping System+**Develop a Corporate Record-keeping System**
   * Records System   * Records System
     * Board, Management and Staff Records     * Board, Management and Staff Records
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-State and Local Requirements+**State and Local Requirements**
   * Income Tax Exemption (state)   * Income Tax Exemption (state)
   * Sales Tax Exemption (state and local)   * Sales Tax Exemption (state and local)
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 ---- ----
  
-State charitable solicitation requirements+**State charitable solicitation requirements**
     * Soliciting funds from the general public     * Soliciting funds from the general public
     * Fee for service and grant monies generally not covered     * Fee for service and grant monies generally not covered
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 ---- ----
  
-Apply for a nonprofit mailing permit+**Apply for a nonprofit mailing permit**
   * Eligible organizations: Religious, Educational, Scientific, Philanthropic (Charitable), Agricultural, Labor, Veterans, Fraternal   * Eligible organizations: Religious, Educational, Scientific, Philanthropic (Charitable), Agricultural, Labor, Veterans, Fraternal
   * Detailed regulations and qualifications   * Detailed regulations and qualifications
   * http://pe.usps.gov/cpim/ftp/pubs/Pub417/Pub417.pdf   * http://pe.usps.gov/cpim/ftp/pubs/Pub417/Pub417.pdf
 +  * Many organizations use e-mail newsletters instead
 +    * ConstantContact, MailChimp, VerticalResponse
 +    * Email Groups
  
  
 ---- ----
- +**Local Regulatory Issues**
-Local Regulatory Issues+
   * Business licenses and permits   * Business licenses and permits
     * Licensing and insurance of professionals     * Licensing and insurance of professionals
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   * Zoning laws and municipal regulations   * Zoning laws and municipal regulations
     * Check city, county, municipal offices for necessary permits, regulations, zoning issues.     * Check city, county, municipal offices for necessary permits, regulations, zoning issues.
- 
  
 ---- ----
  
-Employment and Payroll+**Employment and Payroll**
   * Federal Employment Laws   * Federal Employment Laws
   * State Employment Laws   * State Employment Laws
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 ---- ----
  
-Intellectual Property+**Intellectual Property**
   * **Offensive and Defensive**   * **Offensive and Defensive**
   * **Trademark** exclusively identifies the source or origin of products or services   * **Trademark** exclusively identifies the source or origin of products or services
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 ---- ----
  
-Checklist for Corporate Legal Compliance+**Checklist for Corporate Legal Compliance**
   * Board Meetings and Minutes   * Board Meetings and Minutes
   * Annual Filings   * Annual Filings
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 ---- ----
  
-Policies and Procedures+**Policies and Procedures**
   * Staff Policies and Procedures   * Staff Policies and Procedures
   * Staff Record Management Policies and Procedures   * Staff Record Management Policies and Procedures
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     * Managerial and organizational     * Managerial and organizational
     * Drafted to anticipate and prevent legal problems.     * Drafted to anticipate and prevent legal problems.
- 
  
 ---- ----
  
-Establish Financial Systems+**Establish Financial Systems**
   * Develop an accounting system and budget.   * Develop an accounting system and budget.
     * Gone are the days of shoe box accounting.     * Gone are the days of shoe box accounting.
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   * Board Financial Management must ensure appropriate   * Board Financial Management must ensure appropriate
     * Oversight, recordkeeping and reporting.     * Oversight, recordkeeping and reporting.
- 
  
 ---- ----
  
-Communications & Development+**Communications & Development**
   * Printed materials, Website, E-mail addresses, Media Relations   * Printed materials, Website, E-mail addresses, Media Relations
   * Database:   * Database:
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 ---- ----
  
-Find a Site and Plan to Begin Operations+**Find a Site and Plan to Begin Operations**
   * All the hard work begins to pay off in services offered to clients.   * All the hard work begins to pay off in services offered to clients.
   * Ensure Policy / Procedures Compliance   * Ensure Policy / Procedures Compliance
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 ---- ----
  
-Further Resources +**Further Resources** 
-  * www.ahereford.org/nonprofit+  * [[www.ahereford.org/nonprofit]]
   * Email amyhereford@gmail.com for more information   * Email amyhereford@gmail.com for more information
-  * www.irs.gov/eo +  * [[www.irs.gov/eo]] 
-  * http://extension.missouri.edu/cd/orgdevcreating_nonprofit.html+  * [[http://extension.missouri.edu/nonprofit/nonprofit.aspx]] 
 +  * [[http://a.co/2Gs3WpJ|Non-Profit Workbook ]]
  
 ===== 6 reasons NOT to set up a Nonprofit ===== ===== 6 reasons NOT to set up a Nonprofit =====
   * 1. There is already an organization filling that need.   * 1. There is already an organization filling that need.
   * 2. You do not have other people “on board” yet.   * 2. You do not have other people “on board” yet.
-  * 3.Your idea is better suited as a for-profit enterprise+  * 3. Your idea is better suited as a for-profit enterprise
   * 4. Starting up takes time.   * 4. Starting up takes time.
   * 5. You’d like to plan a one time fundraiser.   * 5. You’d like to plan a one time fundraiser.
   * 6. Your type of cause makes it difficult to secure long term funding.   * 6. Your type of cause makes it difficult to secure long term funding.
  
 +===== Dissolution =====
 +  * Meet and/or extinguish all outstanding claims against the organization
 +  * Send Articles of Dissolution to Secretary of State
 +    * Required approval: Directors
 +      * Higher standards for approval may be found in the Articles or Bylaws
 +  * Send Notice to Attorney General
 +    * Notice of who received assets of the Nonprofit
 +    * Retain enough to pay any outstanding debts and professional fee
 +  * Send Notices to claimants
 +    * Mail notice to known claimants
 +    * Publish notice for unknown claimants
 +  * Obtain Tax Clearance Letter from Dept of Revenue
 +  * Send Articles of Termination to Secretary of State
 +    * Mail with Tax Clearance Letter
 +    * Once all business is complete
 ====== Part II ====== ====== Part II ======
  
-What is a non-profit?+**What is a non-profit?**
   * An organization is not organized for profit   * An organization is not organized for profit
   * Organized   * Organized
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 ---- ----
  
-Tax-Exempt Organization Reference Chart+**Tax-Exempt Organization Reference Chart**
 {{ ::teochart.png?400 |}} {{ ::teochart.png?400 |}}
  
  
 ---- ----
 +===== Public Charity =====
  
-Public Charity 
   * Inherently public charities: Churches, Schools, Hospitals   * Inherently public charities: Churches, Schools, Hospitals
 {{ ::publicsupport.png?400 |}} {{ ::publicsupport.png?400 |}}
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 ---- ----
  
-Public Charity+**Public Charity**
   * Supporting Organizations:   * Supporting Organizations:
   * 509a3 – Type I: Subsidiary   * 509a3 – Type I: Subsidiary
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 ---- ----
  
-What is a Nonprofit Board?+===== What is a Nonprofit Board? =====
   * Governing body of the organization   * Governing body of the organization
     * Acts as president, congress and supreme court     * Acts as president, congress and supreme court
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 ---- ----
  
-Methods of Appointment+**Methods of Appointment**
 {{ ::boardappt.png?400 |}} {{ ::boardappt.png?400 |}}
  
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 ---- ----
  
-What is a Church Sponsored Organization?+**What is a Church Sponsored Organization?**
   * An organization with a split personality   * An organization with a split personality
     * Organized under church law with church responsibilities     * Organized under church law with church responsibilities
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 ---- ----
  
-Legal Duties+**Legal Duties**
   * __Duty of Care__: Take reasonable care when making decisions for the organization, be competent   * __Duty of Care__: Take reasonable care when making decisions for the organization, be competent
   * __Duty of Loyalty__: Act in the best interest of the organization, confidentiality   * __Duty of Loyalty__: Act in the best interest of the organization, confidentiality
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 ---- ----
  
-Articles of Incorporation+**Articles of Incorporation**
   * Agreement with the state to establish and maintain the corporation: name, duration, location, registered agent, purpose, nonprofit status, amendment & dissolution   * Agreement with the state to establish and maintain the corporation: name, duration, location, registered agent, purpose, nonprofit status, amendment & dissolution
   * Regular filing responsibilities, often overseen by secretary or treasurer   * Regular filing responsibilities, often overseen by secretary or treasurer
Line 520: Line 550:
 ---- ----
  
-Bylaws+**Bylaws**
   * Law for the Corporation   * Law for the Corporation
   * Board Governance   * Board Governance
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 ---- ----
  
-Types of Boards+**Types of Boards**
   * Two – Tiered Board: Member / Director   * Two – Tiered Board: Member / Director
   * Governing Board   * Governing Board
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       * Working Committees       * Working Committees
   * Expectations   * Expectations
- 
  
 ---- ----
  
-Boards and Management+**Boards and Management**
 {{ ::board_mgt.png?400 |}} {{ ::board_mgt.png?400 |}}
- 
  
 ---- ----
  
-Traditional Nonprofit Organization Structure+**Traditional Nonprofit Organization Structure**
 {{ ::traditionalboard.png?400 |}} {{ ::traditionalboard.png?400 |}}
- 
-  * Other: Ad Hoc or Program Committees 
-  * Budget and Finance Committee 
-  * Board of Directors 
-  * Fundraising Committee 
-  * Nominating Committee 
-  * -CEO- Executive Director (or President) 
-  * Asst. Director Development (or Vice President) 
-  * -CFO- Asst. Director Finance (or Vice President) 
-  * -COO- Asst. Director Operations (or Vice President) 
-  * Asst. Director Planning/ Marketing (or Vice President) 
-  * -COO- Asst. Director PR/Community Affairs (or Vice President) 
-  * Asst. Director Human Resources (or Vice President) 
  
 ---- ----
  
-Honorary and Adjunct Boards +**Honorary and Adjunct Boards** 
-  Fundraising: +{{ ::honorary.png?300 |}}
-  Board of Governors +
-  * Board of Advisors +
-  * Friends Groups +
-  * Supporting Organizations +
-  * Community, Citizen Board +
-  * Steering Committees +
-  * Board of Directors or Trustees +
-  * Fundraising Committee +
-  * Budget and Finance Committee +
-  * OtherAd Hoc or Program Committees +
-  * Nominating Committee +
-  * Executive Director +
-  * Advisory:+
  
 ----- -----
  
-Board Responsibilities+**Key Board Responsibilities**
   * To make sure that critical systems are functioning the way they should   * To make sure that critical systems are functioning the way they should
   * To make sure that effective systems of checks and balances are in place   * To make sure that effective systems of checks and balances are in place
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 ----- -----
  
-Board Requirements+**Board Requirements**
   * File and publish Form 990 and State filings   * File and publish Form 990 and State filings
   * Audit / review – file if necessary   * Audit / review – file if necessary
Line 623: Line 625:
 ----- -----
  
-Liability +===== Liability ===== 
-  * Wrongful Action+ 
 +**Wrongful Action**
   * Of corporation – corporation responds for actions of the corporation   * Of corporation – corporation responds for actions of the corporation
   * Of employee   * Of employee
-  * Corporation responds under respondeat superior doctrine +    * Corporation responds under respondeat superior doctrine 
-  * Employee responds if outside scope of work+    * Employee responds if outside scope of work
   * Of board member   * Of board member
-  * Corporation responds if director was reasonably prudent +    * Corporation responds if director was reasonably prudent 
-  * Board member responds if there is a failure of duty of care, loyalty or obedience+    * Board member responds if there is a failure of duty of care, loyalty or obedience
  
 ----- -----
  
-Fiscal Sponsorship and Partnerships +===== Fiscal Sponsorship and Partnerships ===== 
-  * What is Fiscal Sponsorship? + 
-    * An arrangement between a 501(c)(3) public charity and a project in which, typically, the charity receives and expends funds to advance the project while retaining discretion and control over the funds. +**What is Fiscal Sponsorship?** 
-    * Not Fiscal Agency – Wrong Term +  * An arrangement between a 501c3 public charity and a project in which, typically, the charity receives and expends funds to advance the project while retaining discretion and control over the funds. 
-    * charity is not agent to receive project $+  * Not Fiscal Agency – Wrong Term 
 +  * charity is not agent to receive project $
   * Fiscal Sponsorship – Preferred Term   * Fiscal Sponsorship – Preferred Term
-    * charity directs, controls project $+  * charity directs, controls project $
  
 ----- -----
  
-Two Main Ways to Do It Right+**Two Main Ways to Do It Right**
   * Direct Project Model (A)   * Direct Project Model (A)
-  * * Independent Contractor is Model B+    * Independent Contractor is Model B
   * Pre-Approved Grant Model (C)   * Pre-Approved Grant Model (C)
  
 ----- -----
  
-Model A – Direct Project+**Model A – Direct Project**
 {{ ::modela.png?300 |}} {{ ::modela.png?300 |}}
  
 ----- -----
  
-Model C – Pre-Approved Grant+**Model C – Pre-Approved Grant**
 {{ ::modelc.png?300 |}} {{ ::modelc.png?300 |}}
  
 ----- -----
  
-Direct Project, Model A+**Direct Project, Model A**
   * Project belongs to sponsor   * Project belongs to sponsor
   * Project is not a separate legal entity   * Project is not a separate legal entity
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 ----- -----
  
-Direct Project, Model A+**Direct Project, Model A**
   * Sponsor is liable for everything   * Sponsor is liable for everything
   * Sponsor reports revenue and expenses   * Sponsor reports revenue and expenses
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 ----- -----
  
-Legal Steps+**Legal Steps**
   * Project director or advisory committee establishes a contract with sponsor.   * Project director or advisory committee establishes a contract with sponsor.
   * Sponsor’s board has already approved a sponsorship program or approves now.   * Sponsor’s board has already approved a sponsorship program or approves now.
Line 686: Line 690:
 ----- -----
  
-Pre-Approved Grant, Model C+**Model C – Pre-Approved Grant** 
 +{{ ::modelc.png?300 |}} 
 + 
 +----- 
 + 
 +**Pre-Approved Grant, Model C**
   * Project belongs to grantee   * Project belongs to grantee
   * Project is in a separate legal entity   * Project is in a separate legal entity
Line 694: Line 703:
 ----- -----
  
-Pre-Approved Grant, Model C +**Pre-Approved Grant, Model C** 
-  * 1) Grantee is liable for project +  * Grantee is liable for project 
-  * 2) Sponsor reports contributions in and grants out +  * Sponsor reports contributions in and grants out 
-  * 3) Grantee reports grant in and expenses out +  * Grantee reports grant in and expenses out 
-  * 4) Sponsor retains “variance power” (discretion and control) over funds+  * Sponsor retains “variance power” (discretion and control) over funds
  
 ----- -----
  
-Pre-Approved Grant – 7 Steps+**Pre-Approved Grant – 7 Steps**
   * Written grant proposal from project   * Written grant proposal from project
   * Sponsor evaluation of proposal   * Sponsor evaluation of proposal
Line 717: Line 726:
 ----- -----
  
-Problems Common to Both Models +**Problems Common to Both Models** 
-  * Sponsor is “absent,” or “We are just using their 501(c)(3)+  * Sponsor is “absent,” or “We are just using their 501c3
   * No written agreement   * No written agreement
   * Confusion with DAF or other programs   * Confusion with DAF or other programs
Line 726: Line 735:
 ----- -----
  
-Pre-Approved Grant Problems+**Pre-Approved Grant Problems**
   * Failure to pre-approve the grant relationship   * Failure to pre-approve the grant relationship
   * Grantee fails to report income   * Grantee fails to report income
Line 736: Line 745:
 ----- -----
  
-Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition+**Resources** 
 +  * Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition
   * Resources   * Resources
   * Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition   * Fiscal Sponsorship: 6 Ways To Do It Right, 2005 edition
Line 746: Line 756:
 ----- -----
  
-Basic Nonprofit Board Responsibilities +===== Basic Nonprofit Board Responsibilities ===== 
-1. Mission and Purpose+ 
 +**1. Mission and Purpose**
   * Ensure the organization’s mission and purpose.   * Ensure the organization’s mission and purpose.
   * Create and review a statement of mission and purpose   * Create and review a statement of mission and purpose
Line 754: Line 765:
 ----- -----
  
-2. Select Executive+**2. Select Executive**
   * Hire the chief executive   * Hire the chief executive
   * Outline executive's responsibilities   * Outline executive's responsibilities
Line 761: Line 772:
 ----- -----
  
-3. Financial Oversight+**3. Financial Oversight**
   * Meaningful financial oversight.   * Meaningful financial oversight.
   * Annual Budget and Audit / review   * Annual Budget and Audit / review
Line 768: Line 779:
 ----- -----
  
-4. Resources+**4. Resources**
   * Ensure adequate resources   * Ensure adequate resources
   * Enable the organization to fulfill its mission.   * Enable the organization to fulfill its mission.
Line 774: Line 785:
 ----- -----
  
-5. Legal and Ethical Integrity+**5. Legal and Ethical Integrity**
   * Ensure legal compliance and ethical integrity   * Ensure legal compliance and ethical integrity
   * Maintain accountability   * Maintain accountability
Line 782: Line 793:
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-6. Planning+**6. Planning**
   * Ensure effective organizational planning.   * Ensure effective organizational planning.
   * Actively participate in an overall planning process   * Actively participate in an overall planning process
Line 790: Line 801:
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-7. Board Development+**7. Board Development**
   * Recruit and orient new board members   * Recruit and orient new board members
   * Assess board performance   * Assess board performance
Line 799: Line 810:
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-8. Public Image+**8. Public Image**
   * Enhance the organization’s public standing   * Enhance the organization’s public standing
   * Clearly articulate the organization’s mission, accomplishments, and goals to the public   * Clearly articulate the organization’s mission, accomplishments, and goals to the public
Line 806: Line 817:
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-9. Programs+**9. Programs**
   * Determine, monitor, and strengthen the organization’s programs and services   * Determine, monitor, and strengthen the organization’s programs and services
   * Evaluate programs for consistency with the organization’s mission   * Evaluate programs for consistency with the organization’s mission
Line 813: Line 824:
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-10. Support Operations+**10. Support Operations**
   * Support the chief executive and assess his or her performance   * Support the chief executive and assess his or her performance
   * Ensure that the chief executive has the support needed to further the goals of the organization   * Ensure that the chief executive has the support needed to further the goals of the organization
Line 822: Line 833:
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-IRS Priorities+**IRS Priorities**
   * Nonexempt purpose – organizational / operational >>Revocation   * Nonexempt purpose – organizational / operational >>Revocation
   * Exempt asset protection – self-dealing, excess benefit transactions, loans to disqualified persons >>Fines   * Exempt asset protection – self-dealing, excess benefit transactions, loans to disqualified persons >>Fines
Line 831: Line 842:
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-NonProfit Governance+===== NonProfit Governance ===== 
 {{ ::npogovernance.png?400 |}} {{ ::npogovernance.png?400 |}}
  
Line 838: Line 850:
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-Common Mistakes +===== Common Mistakes ===== 
-1. Failing to Understand Fiduciary Duties+ 
 +**1. Failing to Understand Fiduciary Duties**
   * Duties of obedience, due care and loyalty.   * Duties of obedience, due care and loyalty.
   * Potential liability   * Potential liability
Line 847: Line 860:
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-2. Failing to Provide Effective Oversight+**2. Failing to Provide Effective Oversight**
   * Boards can delegate   * Boards can delegate
   * Must exercise oversight   * Must exercise oversight
Line 859: Line 872:
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-3. Deference to the Executive, Chair or Founder+**3. Deference to the Executive, Chair or Founder**
   * No one can replace board supervision   * No one can replace board supervision
   * Executive Committee   * Executive Committee
Line 867: Line 880:
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-4. Micro-managing Staff+**4. Micro-managing Staff**
   * Keys, staff reports   * Keys, staff reports
   * Strategy and direction   * Strategy and direction
Line 875: Line 888:
 ----- -----
  
-5. Avoiding The Hard Questions+**5. Avoiding The Hard Questions**
   * Ask the tough questions   * Ask the tough questions
   * Air differences   * Air differences
Line 884: Line 897:
 ----- -----
  
-6. Insufficient Conflict of Interest Management+**6. Insufficient Conflict of Interest Management**
   * Have a policy   * Have a policy
   * Discuss it periodically, when might it arise   * Discuss it periodically, when might it arise
Line 893: Line 906:
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-7. Lack of Awareness of Governing Law+**7. Lack of Awareness of Governing Law**
   * For profit directors must adjust   * For profit directors must adjust
   * Understand requirements and penalties for non-compliance   * Understand requirements and penalties for non-compliance
Line 901: Line 914:
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-8. Outdated, Inconsistent Governing Documents+**8. Outdated, Inconsistent Governing Documents**
   * Know the documents   * Know the documents
   * Read and apply the documents   * Read and apply the documents
Line 911: Line 924:
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-9. Airing Disagreements Outside the Boardroom+**9. Airing Disagreements Outside the Boardroom**
   * “What happens in the boardroom stays in the boardroom.”   * “What happens in the boardroom stays in the boardroom.”
   * Duty of loyalty   * Duty of loyalty
Line 921: Line 934:
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-10. Failure to Cultivate Board Diversity+**10. Failure to Cultivate Board Diversity**
   * Family and friends of the organization   * Family and friends of the organization
   * Volunteers and clients, alum   * Volunteers and clients, alum
Line 930: Line 943:
  
 ===== Top 10 Nonprofit Risks ===== ===== Top 10 Nonprofit Risks =====
-Risk 1: Financial loss+**Risk 1: Financial loss**
   * To prevent this, it helps to have a well-trained, well-informed board.   * To prevent this, it helps to have a well-trained, well-informed board.
  
Line 936: Line 949:
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-Risk 2: Social Media +**Risk 2: Social Media** 
-  * Exposures from social media use, misuse and naivete. Risk-management strategies include written guidelines for employees, volunteers and members and a point person to monitor social media.+  * Exposures from social media use, misuse and naivete.  
 +  * Risk-management strategies include written guidelines for employees, volunteers and members and a point person to monitor social media.
  
  
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-Risk 3: Incivility.+**Risk 3: Incivility**
   * Investigate complaints without delay and hold staff and volunteers accountable.   * Investigate complaints without delay and hold staff and volunteers accountable.
  
Line 948: Line 962:
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-Risk 4: Form 990 +**Risk 4: Form 990** 
-  * IRS Form 990 and federal tax-exempt status. Losing that status is really easy. +  * IRS Form 990 and federal tax-exempt status.  
 +  * Losing that status is really easy.
  
 ----- -----
  
-Risk 5: Copyrights +**Risk 5: Copyrights** 
-  * Copyrights and trademarks. Use the copyright symbol. Use work-for-hire agreements with contractors. Respect the work of others. +  * Copyrights and trademarks. Use the copyright symbol.  
 +  * Use work-for-hire agreements with contractors.  
 +  * Respect the work of others.
  
 ----- -----
  
-Risk 6: Contracts +**Risk 6: Contracts** 
-  * Failure to limit a contracting authority and other common mistakes in contracting. Develop a simple policy, clarify who has authority to enter one and obtain legal review, before signing.+  * Failure to limit a contracting authority and other common mistakes in contracting.  
 +  * Develop a simple policy, clarify who has authority to enter one and obtain legal review, before signing.
  
  
 ----- -----
  
-Risk 7: Lack of Consistency +**Risk 7: Lack of Consistency** 
-  * Lack of synchronicity in board policy and practice. Look at policies. Do they need changing?+  * Lack of synchronicity in board policy and practice.  
 +  * Look at policies. Do they need changing?
  
  
 ----- -----
  
-Risk 8: Conflicts of Interest +**Risk 8: Conflicts of Interest** 
-  * Failure to understand and manage conflicts of interest. Make sure the policy is easily understood.+  * Failure to understand and manage conflicts of interest.  
 +  * Failure to have a policy 
 +  * Make sure the policy is easily understood.
  
  
 ----- -----
  
-Risk 9: Fraud+**Risk 9: Fraud**
   * Understand the inherent risks and fraud schemes.   * Understand the inherent risks and fraud schemes.
  
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-Risk 10: Reputation+**Risk 10: Reputation**
   * Remember humility (admit mistakes) and speed (without delay).   * Remember humility (admit mistakes) and speed (without delay).
  
Line 993: Line 1012:
  
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 +==Parting Words===
   * Board composition and numbers matter; guard against founder's syndrome   * Board composition and numbers matter; guard against founder's syndrome
   * Policies are important but must be understood, implemented and enforced   * Policies are important but must be understood, implemented and enforced
/users/ahereford.org/htdocs/canonlaw/data/attic/nonprofit.1500489445.txt.gz · Last modified: 2023/06/30 15:17 (external edit)