Monday, April 11, 2005

Does Your Board Go To Aruba?

I mean, like, all of us take our boards to places like London and Aruba for strategic planning sessions, right?

Well, according to Minnesota Attorney General, Mike Hatch, the not-for-profit organization Allina paid for employee travel to such destinations. You can read the gruesome details in his report to the Senate Finance Committee here http://finance.senate.gov/hearings/testimony/2005test/mhtest040505.pdf

This whole issue shines a light on the concept of organizational culture. What is acceptible at yours? Does the executive director include wine with the meal at the holiday celebration? Or is your group so frugal that the board meets at Old Country Buffet paid by the volunteer? Or, do you meet at an Old Portland home and share brie, hummus and McTarnahans?

Each organization comes up with its own code, but I'm guessing that most of us would never dream of thinking trips to London for board members and their significant others is an acceptable use of donated or non-taxable funds.

Organization Executives Need Training

My bias that all nonprofit executives and board members need training specific to the sector was reinforced as I read through the reports submitted to the Senate Finance Committee looking at changes to nonprofit law. I'll provide tidbits from them in future posts and will go into depth on some proposals from the point of view of a nonprofit board member or executive director.

There are some great ideas out there for improving the sector. Leon Panetta correctly pointed out that there are plenty of laws currently on the books that aren't even enforced. So, putting more out there will be meaningless without more enforcement and training. There are a lot of well-meaning staff and volunteers out there who just badly need training. The few truly bad actors should be rooted out by increasing the number of IRS staff for this purpose.

Panetta also suggests all nonprofits become "accredited", but I see this as an idealistic and impractical eventuality. I think the feds should give grants to the state attorney generals to help them develop their own nonprofit training programs. Oregon's attorney general barely keeps up with the massive nonprofit fraud cases and has no budget for other hair-raising problems out there that may not be technically "illegal". Foundations, educational institutions and industry experts should team up with the states to match the Federal grants and to ensure program quality.

Tuesday, April 05, 2005

Senate Finance Committee considers nonprofit reform proposals

Today the Senate Finance Committee held hearings entitled, "Charities and Charitable Giving: Proposals for Reform." You can read prepared statements by witnesses at http://finance.senate.gov/sitepages/hearing030505.htm. (Sorry, can't get Blogger links to work).

The nonprofit sector is buzzing with comment on the Senate Finance Committee's staff discussion draft of the issues. In response, several coalitions representing the third sector have developed their own recommendations, including the Council on Foundations, www.cof.org and The Panel on the Nonprofit Sector, described in the April 1st issue of The Nonprofit Times, www.nptimes.com/Apr05nptl.htm/.

Later I'll discuss this reform in more detail, but one of my hot button issues was raised in the Senate Committee discussion draft: they propose to make it illegal for private foundations and other not-for-profit groups to pay their board members.

Recently I snarkily suggested to some nonprofit colleagues that perhaps we should all start paying board members for their service, and I got the usual reaction - "oh my God, that would be so horrible!" Well then, how do the private foundations get away with it? And how can so many of these same Foundations then decline to fund a group because they also pay their board members? "Oh, but OUR Foundation's work requires PROFESSIONALISM!"

Ignore that elephant in the room people, nothing to see here, move along now.