Serving as a board member i.e., director of a nonprofit is no longer just about selling tables for the next fundraising event or simply listing your service on a resume. As nonprofits continue to struggle with the vagaries of a dampened economy, expectations are increasing that directors are approaching their service with the same attentiveness they might bestow on their paid careers. Of particular interest in the spectrum of due diligence are fiduciary and personnel responsibilities. In last week's Nonprofit Spring Forum presented by Pacific Continental Bank held in Portland, Oregon, attendees heard from a distinguished panel including Dennis Doherty (DePaul Industries), Chrys Martin (Davis Wright Tremaine LLP), Michael Shrayer (Chubb Group of Insurance Companies, and our moderator Steve Miller (Beecher Carlson Insurance Agency LLC) just how important it is for board members to be well-informed and well-insured on both counts.
In the discussion of the board's role, we were reminded of three key duties:
1 Diligence: Act in good faith and make decisions in the best interest of the organization.
2. Loyalty: Avoid the appearance of conflicts of interest. Disclose and be open about potential conflicts of interest.
3. Obedience: Follow the charter of the organization and applicable laws.
We also discussed the "Business Judgement" rule. Which - to my recollection - deals with using the context of your beliefs to support decisions that are made.
Chrys Martin stressed the importance of not rubber-stamping decisions. If your bylaws aren't serving you well, get engaged and get them changed especially with regard to indemnification. She stressed the important of clear job descriptions for board members and paid staff. She also remarked about the importance of carrying Directors and Officers (D&O) insurance for board members. Homeowners Insurance is not a substitute! There is no "state coverage" or "immunity" for volunteers including board members. Ms. Martin also spoke a great deal regarding employment practices.
No, I'm not an attorney and don't play one on TV! I am though a proud CFRE wanting to share this important information with you. I'm hopeful the recap of this lively conversation will encourage you to revisit your bylaws with a focus on how they can be improved to serve your organization and its board best.
Special thanks to Lisa Faust and the team at Pacific Continental Bank and the panelists for bringing this presentation to us!
Showing posts with label Pacific Continental Bank. Show all posts
Showing posts with label Pacific Continental Bank. Show all posts
Monday, April 30, 2012
Tuesday, March 30, 2010
Why you (yes, you) should care about economics!
Too often, we focus exclusively on giving trends – who is giving how much – to the exclusion of greater economic trends. Pacific Continental Bank’s Nonprofit Economic Breakfast Forum provided a premium opportunity for John Mitchell, Dave Westcott, and Gary McGee to help us understand how various facets of the greater economy and continuing recovery could and will impact giving. My thanks to Dan Hempy, Lisa Faust, and the team at Pacific Continental Bank for convening such a great panel and making this event possible!
This morning’s meeting was in the words of Pacific Continental Bank’s CEO Dan Hempy – “the brainchild of Lisa Faust.” Brainchild is a very apt description. The event brought together CEOs, fiscal managers, executive directors, and other professionals like me to hear three of the area’s most recognized leaders in nonprofit finance to share with us their assessments of how the current recession is affecting nonprofits and insights about how the recovery looks for the sector.
Gary McGee (McGee & Co.) mentioned that according to his research 10 – 12% of nonprofits will come close on breaking even in the current fiscal year. He said that in places like Texas government is contracting with for profit entities to provide services such as housing and other services traditionally seen as the exclusive domain of nonprofits. He didn’t provide local examples. He cited the 2002 Sarbanes-Oxley Act - http://ow.ly/1sL7D – as an important milestone in the fiscal management of nonprofits. He shared that corporate giving now seems to include a greater mix of in-kind contributions and that institutional funders (my words) were less likely to fund administrative, operational, or fundraising costs.
Dave Westcott (The Oregon Community Foundation) described how OCF has managed in the face of the changed economy and described his experience with giving in that same context. Dave said that giving has increased to large organizations and suggested that the increase may correlate with smaller organizations cutting development staff and in some cases entire departments. He mentioned that Oregon ranks second highest in giving in the west. (Follow this link to see information on OCF’s 2009 survey http://ow.ly/1sL6M. Dave observed that, “Operations funding will remain an issue with us in the face of growing need.” He shared his belief that “baby boomers” are the largest, wealthiest demographic ever and offer an opportunity to develop deferred giving programs. Dave encouraged nonprofit leadership to build and diversify revenue by focusing on filling the pipeline for gifts; to work with banks, trusts, community foundations, and other entities to develop these opportunities; and to establish a planned giving committee. He reminded the audience that the next Community Grants deadline is August 1. For more information, visit http://www.oregoncf.org/receive/grants/grant-opportunities
John Mitchell (M & H Economic Consultants) provided a presentation packed with all types of statistics and insights. Here are the highlights and to me the most significant; “looming demographic change and new medical system launched – payroll taxes to investment income for high income persons." John offered the following article, “Taxes Cause Wealth Drain On States” http://ow.ly/1sL1k published in the Wall Street Journal as an example of how changes in taxes can impact charitable giving. His points to ponder included, “Where do new jobs come from? (Jobs, Gates, Vollum, Packard, Knight, Ford, etc.)” and “The Shape of the Upturn? – V, W, L, NIKE (Swoosh). I especially liked his illustration of the NIKE recovery being one that follows the shape of the swoosh: middle then down and then a steady upward trajectory. The list for new jobs sounded like a list of foundations to me, but I didn’t have a chance to clarify the intent of the list. If the intent is to list foundations supporting innovation and entrepreneurism, I’d like to see the Ewing and Marion Kauffman Foundation listed there too. John did mention innovation as being an inspiration for new jobs, so perhaps Kauffman is a fit here. He cited as long term considerations “The Great Recession’s Legacies i.e., regulatory demands and a decline in giving, “Response of High Net Worth/New Income Households Respond to Tax Changes – New Jersey as a Model (See previous link. Notice a theme here?), and “Unfunded Entitlements Coming Home to Roost – Generational Conflict? Competition for You!”
The Forum ended with our three speakers convened as a panel and entertaining questions from the audience. Let me put my Fundraising Savvy to work in developing a new grantwriting or sponsorship program or re-energizing and refining an existing program so that your organization can realize its funding potential.
This morning’s meeting was in the words of Pacific Continental Bank’s CEO Dan Hempy – “the brainchild of Lisa Faust.” Brainchild is a very apt description. The event brought together CEOs, fiscal managers, executive directors, and other professionals like me to hear three of the area’s most recognized leaders in nonprofit finance to share with us their assessments of how the current recession is affecting nonprofits and insights about how the recovery looks for the sector.
Gary McGee (McGee & Co.) mentioned that according to his research 10 – 12% of nonprofits will come close on breaking even in the current fiscal year. He said that in places like Texas government is contracting with for profit entities to provide services such as housing and other services traditionally seen as the exclusive domain of nonprofits. He didn’t provide local examples. He cited the 2002 Sarbanes-Oxley Act - http://ow.ly/1sL7D – as an important milestone in the fiscal management of nonprofits. He shared that corporate giving now seems to include a greater mix of in-kind contributions and that institutional funders (my words) were less likely to fund administrative, operational, or fundraising costs.
Dave Westcott (The Oregon Community Foundation) described how OCF has managed in the face of the changed economy and described his experience with giving in that same context. Dave said that giving has increased to large organizations and suggested that the increase may correlate with smaller organizations cutting development staff and in some cases entire departments. He mentioned that Oregon ranks second highest in giving in the west. (Follow this link to see information on OCF’s 2009 survey http://ow.ly/1sL6M. Dave observed that, “Operations funding will remain an issue with us in the face of growing need.” He shared his belief that “baby boomers” are the largest, wealthiest demographic ever and offer an opportunity to develop deferred giving programs. Dave encouraged nonprofit leadership to build and diversify revenue by focusing on filling the pipeline for gifts; to work with banks, trusts, community foundations, and other entities to develop these opportunities; and to establish a planned giving committee. He reminded the audience that the next Community Grants deadline is August 1. For more information, visit http://www.oregoncf.org/receive/grants/grant-opportunities
John Mitchell (M & H Economic Consultants) provided a presentation packed with all types of statistics and insights. Here are the highlights and to me the most significant; “looming demographic change and new medical system launched – payroll taxes to investment income for high income persons." John offered the following article, “Taxes Cause Wealth Drain On States” http://ow.ly/1sL1k published in the Wall Street Journal as an example of how changes in taxes can impact charitable giving. His points to ponder included, “Where do new jobs come from? (Jobs, Gates, Vollum, Packard, Knight, Ford, etc.)” and “The Shape of the Upturn? – V, W, L, NIKE (Swoosh). I especially liked his illustration of the NIKE recovery being one that follows the shape of the swoosh: middle then down and then a steady upward trajectory. The list for new jobs sounded like a list of foundations to me, but I didn’t have a chance to clarify the intent of the list. If the intent is to list foundations supporting innovation and entrepreneurism, I’d like to see the Ewing and Marion Kauffman Foundation listed there too. John did mention innovation as being an inspiration for new jobs, so perhaps Kauffman is a fit here. He cited as long term considerations “The Great Recession’s Legacies i.e., regulatory demands and a decline in giving, “Response of High Net Worth/New Income Households Respond to Tax Changes – New Jersey as a Model (See previous link. Notice a theme here?), and “Unfunded Entitlements Coming Home to Roost – Generational Conflict? Competition for You!”
The Forum ended with our three speakers convened as a panel and entertaining questions from the audience. Let me put my Fundraising Savvy to work in developing a new grantwriting or sponsorship program or re-energizing and refining an existing program so that your organization can realize its funding potential.
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