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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent i’m your aptly named host it’s our halloween show ghosts and goblins and ghouls hope you enjoy your happy halloween this weekend and i’m glad you’re with me. I’d be stricken with carp itis if you came up with the inflammatory idea that you missed today’s show, don’t be the founder from hell, jim, no ac heads fund-raising for the zi foundation, which he founded. How did he and the foundation manage his transition from executive director to chief fundraiser? He talks candidly about the board job descriptions, ego and mohr. We talked at opportunity collaboration just a couple of weeks ago and chilling laws and regs thes air no tricks. Jean takagi has actual and proposed laws that will scare you into action. He’s, our legal contributor and principle of neo the non-profit and exempt organizations law group on tony’s take two between the guests tech videos from mexico we’re sponsored by pursuing full service fund-raising data driven and technology enabled, you’ll raise more money pursuant dot com here’s jim nowak and the founder from hell from opportunity collaboration welcome to tony. Martignetti non-profit radio coverage of opportunity collaboration twenty fifteen were on the beach in x top of mexico. My guest is jim no act he’s, president and co founder of zi foundation. They’re at deasy i that’s deltas, delta zulu, india from my air force days dot org’s dc i dot or ge, and we’re talking about avoiding being the founder from hell. Jim is not that jim. Welcome. Thanks, tony, for having me on the show. Appreciate it. It’s a pleasure. I’m glad we got together. What? Two days ago, right? I think we’re connected. And, um, all right, you’re not the founder from hell, and we are gonna take this really have one side of the story, so i don’t have it. I’m trusting you because one of your board to collaborate to corroborate your your side. But you’re doing a session here. Yeah, i presume you’ve been. You’ve been vetted. Yeah, i’ve done done the session for the six years i’ve been coming. Job pretending collaboration. I keep offering. You know, i don’t need to do the session, but it seems as i always say, nobody ends up at that session by mistake, you know, people and it’s been interesting people, aaron, really tough situations, very emotional, you know that the social sector is a tough space to be in and their people are very passionate and it can be really charged, but we do our best to try to give people some tools, maybe walk through these these these difficult situations, all right? And in the six years i’ve been doing, you’ve never been challenged by anyone who said, no, that guy is the ceo. That guy he’s the founder from hell, no never had that challenge, but haven’t i know, but there, you know, again, i would say i only have one perspective to bring to it there are people that have different perspectives and say that would never work that are absolutely, and i’ve had some of them as guests, but but we’re getting the founders perspective, which i haven’t had before. Yeah, um, let’s, start with your history with the organization. I’m the cofounder and now i sit is president. We started our work in the fall. Seventeen years ago. It was around an expedition that had been climbing in the fall for a number of years and small expedition to climb memoria twenty three thousand four hundred foot what’s. The name of it from maury fremery. Yeah, three miles to the west of everest, on the nepal tibet border. Doing a new route has never been climbed. I was on there in eighty nine. Now back in ninety eight and in ninety eight found out about small girls home that was financially failing, huh? Raised money in my local community to help bail this girl’s home out. That was the genesis of our work. Where’s. Your community. Where were you living then? I was living the vail, colorado, that and shortly after that moved to where were based now in ridgeway, colorado, southwest corner of colorado. Down by telling. Right. Okay. And how long have you not been the executive director? I was executive director for the first thirteen years. Okay? And then we started into a process of identifying we wanted to shift from there and bring someone in with better financial skills than than myself. But and it was early, early on, it was identified by my board that they want me to say connected to the organization i carried the history carried. A lot of the donors carried those. Relationships on. They want me to become the development director. Okay, i’m going to get to the details of how that all played out. That’s that’s, critical part. So it was for you, it’s been four years now since you were executive director. Is that right? Correct. Okay. And there is a new executive director. Hired and same person have been in the position for years. Yeah, we feel like we we did a really thorough an extensive search. Get a job and he’s still on the job saying individual okay. Okay, so, he’s uh, he’s executive director, um correct, mark. Mark. And you won’t get a shot at mark. Yeah. Mark rikers, mark rikers. And you’re the president. Correct. Okay. Let’s, uh, let’s start with the board’s role in this. What i think is really interesting eyes that it was the board recommendation that you stay it wasn’t you as founder dictating. I want to stay with this organization. Thie impetus for having you remain came from the board. And also the impetus toe hyre an executive director came from the board, so it was to phase. It was like we need two. And as my board affectionately refers to jim, if you get hit by a bus, this organization could potentially go down in flames. So the impetus came from some very skilled and wise board members that had experience in the nonprofit world. Had experiences changed management leaders. We’re just very savvy and saying let’s, make our organization more sustainable and increase our bench bench strength. There had to be a lot of trust, a cross, you and the board. I mean, you had to believe that the board actually wanted you two remain and in the capacity that you ultimately became president and which is chief fundraiser for you have put a lot of faith in you’re in your board members telling you that believing what they were telling you. Yeah, and this is a really an emotional space for founder’s teo walk into because you could certainly believed that you were in a situation where you were being replaced, you know, and, um, that certainly took ah, was it took a while for me? Because that was my first reaction. I don’t think it was an unusual one. Um, this changing roles and organizations is really tough work, i think it’s exceptionally tough if you’re the founder, if you were the very first person working on your own, you know, from monstrous hours and generating the organization. But pardon parcel of that is that i always had the belief that eventually, you know, in organizations everyone leaves eventually, and i always had in the back of my mind that the most important thing was that this organization lived on beyond me. And this was certainly a major stepping stone to that. What about the the composition of the board you mentioned? You had some change management people on your board? I’m talking about the importance of having the right skill set on your board to help this transition. Yeah, i mean, it’s it’s, kind of like who’s. Do you have the right people on the bus? You know, and early on in our evolution, you know, we had a lot of people that knew a lot about paul, and that was great, but they were all foreigners, you know? And they had great skill, great passion and that but the evolution has been to bring in buy-in people with sound non-profit experience people who were changed management leaders that basically had their own consulting firms that actually helped corporal eaters and non-profit lee, just walk through these really challenging transitions in the evolution of the nor is a t had that expertise. Oh, yeah, we have that three people that change management expertise. Yeah, that was that was really hughes. And then more than anything, maybe was that i had specifically two individuals that i trust implicitly, that they actually have my back and that that boardmember board members that this was, you know, they had long non-profit experience, but that this was the way the organization could go and that i was not being, you know, put out to pasture and that that that this would be a very fascinating time for me to be able to find out what i really wanted to do instead of having to do everything you also had to trust that the board has the best interests of z in mind that and that their vision is at least, you know, parallel to yours. I mean, it may not be identical, but they yeah, they’ve got z in their in their hearts and and that that really, you know, one of the two individuals i trusted implicitly had been there at the first board meeting in my kitchen table, you know? And now we’re actually we have our board meetings at his board table on the fourteenth floor in denver office, you know? So i mean, that’s been a long evolution, but that had been fourteen years of that relationship, so yeah, i really knew that they had my had my back, a lot of trust ways, but not without a lot of emotion. And a lot of baggage, i’m sure is a tough, you know, you know, talk about the emotional, you know, you just just feel, is this the where am i actually going? What was actually going to happen to the organization, you know, what’s gonna happen to me because i really impassioned about this work and want to stay in this space, you know? So yeah, a lot, a lot of challenges and a lot of ups and downs, and i would say that that period tow walk through that and feel confident it took a couple months, it made it really took a couple months, and we laid out a very deliberate plan on the evolution of this after about a month into it. So i was starting to get on board a month of emotion. Yeah, the emotion continued, but then it started become irrational process. Yeah, because it started to develop and expand into what could be and i didn’t see that initially. Oi! All i saw was what what what i thought was being replaced yeah, yeah, yeah, yeah. Initially that’s it. Yeah, yeah. All right. But you obviously overcame that. Yeah. Oh, and to add to that in this process. And, you know, one thing that was really fascinating is that our entire board bought into the concept that as we moved into a new executive director, that the executive committee and myself would be the five people that would decide, and it would be unanimous on who we decide if we didn’t find them knives like your daddy way did not find that person, we would scrap it for six months and then come back okay, you’re tuned to non-profit radio tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights published once a month. Tony’s guests are expert in crowdfunding, mobile giving event fund-raising direct mail and donor cultivation. Really all the fund-raising issues that make you wonder am i doing this right? Is there a better way there is? Find the fund-raising fundamentals archive tony martignetti dot com that’s t i g n e t t i remember there’s a g before the end, thousands of listeners have subscribed on itunes. You can also learn maura the chronicle website philanthropy dot com fund-raising fundamentals the better way we’re going to get to the search. I spent more time on the board. You mentioned you had a lot of longevity on the board, not not just the one the one guy who started your kitchen table and now you’re on his floor. But you you yeah, you had other board members with long longevity, they understand the organization, they they have the best interests of z in their hearts to jury. I mean in our by-laws boardmember sze sit for three years, they have to be voted back on for another three years. They could walk away from the organization or immediately go to an advisory board that gets all the information doesn’t vote after a year, they could be voted back on the board, but wave have everything we’ve had people that stayed a long time. We’ve had people that cycled and cycled out. I think that’s a really healthy for the cycle more than anything. New ideas, new energy, new vision. You know, new new things. Yeah. Onda connection disease work. Yeah. And and that that solid underpinning has always been that people have been there to anchor it. Not just myself. Uh, let’s talk about the the search that that that search process you said it was the executive committee of the board, just four people. And you? And did it have to be? You had to be unanimous. Vote on who the successor would be. Okay. He obviously had a lot of there. Had to be a lot of trust in that process. Yeah, from the rest of the board members. So well. And you too, you know. Yeah. Yeah, yeah. All five of you have to. Well, actually, the whole board had trust the process. Yeah, they had delegated the vote to the executive committee and you, but the whole board had trust this process. Yeah, they really did. And so there were some mechanisms that engaged staff engaged other board members, whether it was an opportunity for the three final candidates to be in our office and ridgeway and people to come there and meet them and to sit in on a conference call with all the board members. Anyone that wanted to patch in, we actually had the three final candidates work with our financial officer for an hour. And as questions around that they were in a closed room also. With our the paul country director who was in country at that time. So they they all spent time with them. So it was really a deal where everyone had input. But there were five the executive committee and myself that were decided. Maybe a little detail. But i’m interested. What was the mechanism for staff to give feedback to the five people who are going to do the vote? It was basically threw the board chair. So they say the staff whether it was the financial officer in the whole country. Director, they gave that input directly back to the board chair on the board chair. Disseminated that too. The selection committee. Okay. Okay. Yeah. Was there a outside search consultant? No, we all did. With is completely just posted it publicly. Well, we posted it in all sorts of spaces, you know, on you threw the peace corps on on, were located in a remote area in western colorado. So speak on the western slope. So we had lots of people in the denver area. Certainly. Um what we ended up through our network’s way ended up with sixty for paper applications now on dh. So that was what we started to wed our way through and pretty short, or there were a third that it was really crystal clear. Yeah, yeah, way too much of a stretch. And people asking too remote work remotely in new york for this job. So glamarys and that was deal that we want people in the office, you know, you know, face to face on dh, so that i was a real process. And and once we cold that list, then all of the board members were assigned. The executive committee searching me were assigned a certain amount of people to deal with, to make phone calls, too. There was a list of questions to be asked, and then that information was brought back to the search committee, and we started to just with labbate, whittle it down. Job job descriptions. You’ve identified that as being critical, setting boundaries. About what? What you’re what you’re gonna be doing as president and not doing with the exec director is going to be doing let’s, let’s flush that out job description. Yeah, that was that was really critical, you know, so to speak. What? You know, what was mark’s role? What was my role in what was our rule? You know, and how are we gonna work? Basically in the same office. And how is that going to make this kind of lateral move to be in charge of of all development, really focusing and digging into that, which is something i certainly had done, but i was doing a lot of different things, too. So that was just really critical and also having our executive committee really get into the weeds on that. And then, you know, it’s all about really owning that once it won once things transition about assuring mark who became the executive director, but during the process, maybe at the point where he was offered the job or at some point he had to be reassured that this was not going to be a founder. Syndrome situation that he was stepping into. Yeah. What was that like? How did you? Well, we did that with all of our three final buy-in indefinite detail. And that was something that we put forth. This is how this out was this how it’s changing. Okay. And, um, you know, i mean, this is probably a good time and, uh, it’s about somebody’s ego and, you know, what’s the what’s, the main driver, is it about you is about control, is it about not allowing the organization to grow past you and evolved past you? Or you’re going to keep a stranglehold on it on dh make things miserable for not only marked, but everybody else in the organization, so i want to double it more detail on how those three candidates got god assured that this was not going to be a disaster situation they’d be walking into mean, it had to be more than just the written job descriptions. Yeah. You know, i think one of the things that was really interesting is we weren’t, you know, quite often in this the executive director search or changes organization. What happens is it’s because the, you know, the staff’s upset programs are not being delivered properly, and financially, you’re you’re in dire straits. I mean, it was a kind of that’s, a standard, why you’re changing. We actually came from a really strong position, and we felt it was inappropriate time to make the shift financially. We were in good shape, staff was quite happy with what they were doing, and programs were certainly evolving at that time. So, you know, nothing was perfect, but we certainly were not in the crisis mode that’s quite often, what happened, so we were on the front end of this, but we were again realizing the vulnerability of of me is the founder. And they also had to be assured that you personally wood abide by the job description, yeah, on everything that’s being said. I mean, you know, this is all in writing, and it all sounds good, but, you know, i was the new executive director could walk in and, you know, this guy jim is just blowing everything out of the water that we talked about, and now i’m in a bad spot. Yeah, yeah, yeah, a lot of really latto had to trust you. Yeah, and it’s a pretty standard situation. Yeah, you know, it’s pretty standard, um, that it be negative. Yeah. Is that the name? And quite often i do hear that people cycle through, though that first executive director didn’t work out. Now we’re into our second one, you know, we were fortunate, and maybe i don’t know why, but i guess mark and the two other candidates believe me, you know, i mean, i really think it comes down to you know that and reassurance from the executive committee. No or trust. Yeah. Latto trust there’s a lot of stress. Yeah. We’re taking a big step here. Like i said, the paper documents are fine. But in the end, they could be end up being meaningless. It comes down to a human connection and right and trust. Yeah. Yeah, ego. You mentioned it before, so let’s explore that mostly your ego that you had keep in check for the for the good of z. Yeah, i think so. I mean, i’m no no expert, trust me, but i guess at the core of this is i’ve always held a belief of doing your best to hyre smart people than yourself on that doesn’t intimidate me. It makes us a stronger organization. So that’s a core belief of my mind. Um, i why would i not try to bring the best and the brightest board members to the board, the best and brightest staff to the board? Um, that’s, just a core belief of mind that that’s what’s going to make a sustainable organization, you know, that’s where the oil starts for me, all right, you know, and, um you know, again, that core belief that my biggest responsibilities this organization lives on beyond me. Yeah. It’s bigger than you. It is much bigger than me. And then you, you know, from one person operation tow for people in colorado in twenty five in the fall. And, you know, fourteen girls is where we started serving over thirty thousand people now it’s way beyond me. I play an inter call roll i have in trickle power because i am the founder, but i’m on ly a piece of the puzzle and that’s that’s a healthy place for nor ization obviously there was a transition period where you had a share, a lot of corporate knowledge with mark as the new executive director. Absolutely. You know, one of the things that was interesting way we’re in an office situation where we had two basic office rooms and initially mark and i were going to work in the same room and i just was, like, that’s not gonna work. We took the office next door. We’re connected by a door, but we can be close and have our own private space that i didn’t want him to feel that i was. Looking over his shoulder, yeah, ever, you know. But there was institutional knowledge, you know, of our organization and what we done, and our relationships and our funding and our partners, and how we did things and where we worked and all that stuff that had to be transferred over. And that takes time. That’s, just a constant process of answering those questions. Mark was incredibly quick study, but, i mean i can’t imagine i’m thinking back out for years now, but, you know, he was really getting it after four months, six months a year, you know, it takes time and it’s, you know, and transferring those relationships, introducing him to those relationships is key and again, taking that letter will move away from that, you know, so that’s, what an and in a way, we also identified that it was an opportunity for me to become maur engaged in the board. You and i now sit on the board. I had never sat on the board first. No, there was not next-gen has founder no, no one. I was fonder, i said as the executive director, but i did not sit on the board and you don’t have a vote now. I didn’t have a vote that i don’t have a way or not right now you’re on the board, but you don’t have a vote, correct. So i’m basically straddled the board on the kind of clutch between the staff from the boy. Why that decision to not have a vote i already have enough power is what the board felt and i think that that’s the accurate. That definitely was another risk situation for me where i was like, wow, i’m losing control. Yeah, but founders have immense historical knowledge, respond relationships, they have immense power with organizations. And although that did feel uncomfortable, it was the right decision. Yeah, and quite a lot. Itjust wass, you know, a lot of this feels like it has to be the right people. I mean, here you’re you’re you’re saying, you know, you struggled with not getting a vote being on the board, but not having a vote, but in order for this to work and for the board to be comfortable, you had teo swallow that you had to accept that and, you know, another person might not have been able to yeah, i think a lot of this, yeah, trust and and the personalities people have to be right now, it’s, not the right people. Then you’re not gonna have the trust and and we’re going toe end up with what i’ve had guests on the show say that which is when the founder leaves the leadership role here. She has got a several ties. Yeah. That’s really the default right? But it sounds like if you arrive the right personalities. You don’t have to, you know, except the default. Well, i think there’s a couple things that play into that one is most times when people are shifting executive directors, it is a crisis situation, and maybe the management wasn’t very strong for so that’s that’s a pretty standard situation. I mean, i for us, we’re coming from ah, solid footing and the thing that was the constant phrase that we we used in our search was we need to find somebody with correct emotional intelligence to come in and not gutsy, but to build on paan what we’ve already created. And so that was it was really the baseline kind of tag line that way worked off the position as president created opportunities for you that you didn’t have as in the leadership role is founder yeah, let’s, talk a little about that because i think it was important for you to recognize that there was opportunity for you and the board was making that clear in the new president role. Yeah, and there i think the opportunity around it was too deep in my relationship with board members. And as i say, be that clutch between what’s happening in our work on the paul what’s happening with staff and that but a zai moved into the development roll exclusively. Really? What happened is at a time. I mean, i had time to follow some more creative, creative things i mentioned there was a knopper to nitti where we were invited from a little town that’s less than a thousand people in ridgeway, colorado, to create enter an event in italy and in france, where there’s a charity cycling about where it’s it’s basically a fancy count for cyclists, that i mean, they have massages and right insane amounts. That was three days of riding with over twenty five thousand feet of climbing racing. And so basically we were able to bring in individuals who had financial capacity to commit to raising a significant amount of money for the foundation. Through this this leverage point through their friends. And you would not have been able to pursue this no way, and found a rolling no on and much band with way too much band with. And then what happened out there, that is, we actually then deepened our relationships in london, in the uk, and we were a register as a charity in the uk. So now there’s the zi foundation uk and we have a board of trustees over there and they basically carried the work of the zi foundation in the uk raise funds for in the paul that money flows through the u s and then in the fall so that basically become a whole new revenue stream that we never had, nor would they have had anywhere near the bandwidth to take something like that on so it’s all those opportunities you know, and looking around the corner what’s next and being very creative about it and that’s been very, very rewarding for me. Simple question in in rap why the title president instead of director of development or institutional advancement? I think the board really wanted to honor my legacy with the organization, you know? And instead of just director of della development, they just wanted to honor my title. Is cofounder present your morning thank you for sharing really some personal stuff, talking about trust and ego and being the right personality. So i want to thank you very much for for sharing. Yeah, thanks. I’m happy to share. With anybody it’s it’s, i think one of the things that happens is in these non-profits u u you changed from being stood sometimes teacher, and i’ve been able to share this with a lot of people it’s tough work at that level and i’m happy to share with anyone. So thank you for having me on pleasure, you’ll find him at zee foundation dot org’s, it’s dc i foundation dot org’s tony martignetti non-profit radio coverage at the opportunity collaboration twenty fifteen on the beach i know you hear the waves breaking in its top of mexico. Thanks so much for being with us. Great convo with jim noah hoexter shared some excellent, really and personal stuff live listener love. We got new bern, north carolina, san diego, california, washington d c that’s alive listener loved going there how about st louis, missouri and durango, colorado live listener love to all of you so let’s go abroad. So south korea always so grateful soul always checking in on your haserot asahi, japan! Konnichiwa and buenos aires, argentina is with us love that you’ve been. You’ve been with us a couple times buy-in mazarene we know star days, of course. We never go beyond live listen love without podcast pleasantries for the over ten thousand listening in the time shift, whatever you’re doing, what’s the latest i heard was painting a house listening to tony martignetti non-profit media while painting the outside this i was very explicit. I want no was the inside the outside she’s painting the outside of her house to tony martignetti non-profit radio. Whatever you’re doing as you’re listening to the podcast pleasantries to the podcast listeners and, of course, affiliate affections began our am and fm stations throughout the country next week. I’m pretty sure it’s going to be next week. We’re going tio, we i i’m going to be welcoming a new affiliate. I’ll give you a hint. Mission await, not mission. Impossible agent ninety nine, agent ninety nine is the hint and that’s as far as much as i am permitted to say at this time. Tony, take two and chilling laws and regulations with jean takagi coming up first. Pursuant, they help you raise more money. They have online tools like prospector, which helps you. You find the donors in your database who are most likely to upgrade to higher levels of giving and velocity, which helps you manage your fund-raising time against goal, lots of analytics associated with velocity to manage fund-raising online tools for small and midsize shops that’s what they’re about that’s. Why they’re perfect sponsor for non-profit radio take the tools that you need and leave the rest behind pursuant dot com i have a video introducing other videos on technology, their interviews from ntcdinosaur non-profit technology conference, which is hosted by the non-profit technology network and ten and in ten ceo. You all know this amy sample ward who’s, our social media contributor on each month she was with me in mexico at opportunity collaboration, where i just got jim, no ac interviewed and she and i shot a video by the pool. Is this just becoming too complex? I don’t know. Amy and i were in mexico an opportunity collaboration, and we did a video all the rest was just kind of background and the video is introducing a bunch of other videos about technology, wearable and mobile tech is one of them your disaster recovery plan and a couple of others. The video is at tony martignetti dot com that’s tony’s take two for friday. Thirtieth of october forty first show of twenty fifteen. Jean takagi is with me. You know him? He’s, the managing editor, managing attorney of neo, the non-profit and exempt organizations law group in san francisco. And he edits the popular non-profit law blogged dot com on twitter he’s at g tak and i am very glad. He’s back live non-profit radio welcome back, jean. Thanks, tony. Great to hear about your your time at opportunity. Collaboration. Yes, i know you were there. You went a few years ago. Is that right? Yeah. It’s been some years. I hope to go again one day. Okay. Yeah, we had a terrific time. And ah, amy was there as well. Very smart, very smart conference on poverty alleviation throughout the world. Well, lots of bright, bright people are incredible, and we have more interviews coming up. I have a couple that i a couple more that i recorded on the beach, and then i’ve got a whole bunch of other ones book. So lots of smart opportunity, collaboration, people coming up and, uh, and you’re one of them. Your opportunity, collaboration alum with me every month. Um, we got some troubles. Well, some concerns troubles, maybe troubles for non-profits in some chilling laws and regs because some non-profits air not operating the way they’re supposed to and some government officials would like tio, have a little greater oversight. Yeah, i mean, it’s, you know, that’s kind of how, how law sometimes work and it’s scary how it works, there’s some sort of scandal that gets onto the front page of the newspaper on some legislator decides, well, we’ve gotta have a law, and sometimes, you know, they’re thinking teo, be very reactively in terms of fixing a problem, but they do not see what with the broader effect on, you know, the ninety nine percent of the non-profits that are not doing anything wrong, stealing or committing fraud and what impact that might have on them. So it’s all a little distressing, and sometimes, you know, from a cynics perspective, it seems to be a little self serving for the for the legislator who might be up for an election, teo sort of rally the public outrage over situation to get some of these laws passed if they’re if they’re ballot, measure propositions or if they’re just something that the legislators up for. Reelection on. So yeah, without their yeah bashing non-profits i don’t know. I don’t know if it’s it’s not as bad as media bashing, which eyes rampant and nobody seems to object to. But but it’s getting a little let’s get a little worrisome. I mean, you know, it’s, always the it’s. Always the bad guys, the bad actors that get the headlines. And then we get the knee jerk reaction from the politicians who, like you suggested i have their own agenda as well. Um, it’s getting a little chilling? Yeah. Yeah. Scary times first, for sure. And especially with media and the internet just ramping up all the information that’s out there and trying teo attract attention scandals to seem to be the juiciest stuff out there. Yeah, that’s zoho get the headlines, gets the headlines and and causes the reactions that could be adverse. All right, so let’s, let’s, let’s. Start here in in new york, i have seen some local headlines. You want to talk about it? To the queen’s library ceo in the county of queens in new york has nothing. Nothing. Totally above aboveboard about spending and that’s causing problems. Yeah, and that it’s their former ceo now he was terminated at the end of last year, and that was after there there are many boardmember is tryingto protect that that person as well, and i’m not sure that they were doing their their full due diligence on the matter when they were trying to protect him, but ultimately he discovered that, yeah, he was spending fairly lavishly on very, very questionable, if not unlawful expenses. Well paying for fruit executive staff to like a tender maroon five concert and then spending several thousand on batter spending several hundred dollars on wine bottles. Tio entertain. Well, now, wine i could see i like wine, but maroon five, i don’t know. Maroon five. Is that worth a couple thousand dollars? Good, i don’t know. I don’t know them if it was. If it was bruce springsteen, you know it might be justified. No, of course, it’s not just i’ve got five love that. Okay? Okay. All right. But, yeah. It’s it’s lavish to take your executive staff is an employee morale event and spend that much money. And there were there were, you know, over three hundred thousand dollars. That issue with lavish expenditures, probably. Never reported his income by the employees so that that was enough latto haven’t fired, but the stories have been breaking since the late bladder half of two thousand fourteen in all of the local new york papers on and picked up by the new york times as well. Um, and you know, this summer a city council member from queens decided that, you know, there should be something done about this, and i i think she comes from a good place and said that there should be some sort of oversight bill that requires executive level officers of organizations that are funded by the city that receive at least fifty percent of their funding from the city to file the conflict of interest disclosure forms that age city agency employees have to file and file them manually. And you know, that type of disclosure requires some normal stuff like name in home address and principal occupation, but it also asks for disclosing any business interests that the employees or their spouse receives that represents more than ten percent of their growth income now requiring that of government employees. I understand that what? Why, that may be necessary, but non-profits our private organizations come, and if you ask that from every in-kind executive type officer of a non-profit is getting compensated, and sometimes they’re just making, like thirty thousand thirty five thousand dollars a year and saying that you’ve got to disclose all of these things, including what your spouse’s making and where they’re making their income that’s going to really chilled the desire toe to serve, um, for those organizations and it’s going to cost a lot of money to for boards of those organizations to try to enforce that type of annual disclosure on what happens when when, you know, they miss a disclosure. And this is why the mayor decided that that this was something that he wanted to support, but, um, the city council member is sort of taking it back. They had a hearing, and they’re going to take it back, and then they’re going to re craft it. But there’s already state and federal disclosures required so this is going to be pretty burdensome and duplicative and sometimes not consistent with what’s already required that they do with the city in the state, i’m sorry the state and the state, the fed, right? Because iris requires conflict of interest disclosures. Is that what you’re talking about? Yeah, yeah. Ah, okay, yeah, so your concern is the the chilling effect that that this is gonna have that people going to be reluctant to take on. I think it was ceo well was certainly ceo executive director, but it was also including, i think, cfo’s. Um ah, they probably any of those sweets, right? Okay, um, you know what? What do you think? And we have other examples coming up. Unfortunately, what can? What can a non-profit do? I mean, lobby the local lobby, the local city council person, who’s, who’s coming up with these reactionary ideas? Yeah. Or just generally educate their stakeholders about what’s going on and why this might be bad for these organizations. So they’re latto small organizations out there, and then this is really going to hit them or could hit them pretty hard that they let people know that this is something that can affect their livelihood, then, yeah, certainly they can either engage in some lobbying on the bill, and public charities are allowed to engage in lobbying. A lot long does it’s not substantial, and they’re pretty generous limits. And we talked about that before, huh? But yeah, this is kind of khun khun b self defense loving too, which might be subject to the exception to the limit. So this can affect their their health and livelihood inability. Teo, do their mission. So go out there, educate people about it. And yes, send it. Send a letter to your legislators and say this is not a good idea. And yeah, as you said, jim, we have talked about the limits around lobbying and advocacy work. So if people want to go to tony martignetti dot com and just search either jean’s name or why do jean’s name and then also lobbying, you will find the show where we talked about this, that entire topic, what the limits are around lobbying and an advil advocacy. Um, we have just about a minute before a break. Gene, you want to introduce us to what’s going on in aa california there’s a proposal about suspending activities? Yes, it’s now, not just a proposal. It actually just got past a few days ago. Our problem will get it a few days ago. It d’oh the new law on january first. And i’ll just sort of revealed before the break boardmember personal liability on the ability to tell an organization to transfer all of its assets to another organization for a little technical. Oh, my if that’s not a cliffhanger of boardmember personal liability. Ham, california crazy out there, that ninth circuit. But i know this is not federal. Okay? Let’s, go out for the break. Gene and i are going to continue provocative conversation. Stay with us. Like what you’re hearing a non-profit radio tony’s got more on youtube, you’ll find clips from stand up comedy tv spots and exclusive interviews catch guests like seth gordon. Craig newmark, the founder of craigslist marquis of eco enterprises, charles best from donors choose dot org’s aria finger, do something that worked. And naomi levine from new york universities heimans center on philantech tony tweets to, he finds the best content from the most knowledgeable, interesting people in and around non-profits to share on his stream. If you have valuable info, he wants to re tweet you during the show. 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More live listener love food jiao china has checked in ni hao all right, jean california what’s going on, but boardmember of personal liability, transfer of assets and you you got you past this thing. Yeah, well, the attorney general it’s a regulation so it’s not a statutory law meaning that the legislative body didn’t elected officials didn’t come up with this law. It’s executive branch officials that passed it solicited some comments from the public and let me just give you some framework on it. First, i i understand why the attorney general’s office wanted to come up with the law that said, okay, we need thio make sure that charities are actually registered with us and are complying with the registration requirements because we need to know who’s out there. And this is probably true of every state where their tens of thousands of charities that have sort of let their registration slip, possibly because they think if they filed with the irs, that they didn’t know that they have additional state filings file in california, we have three filings with different agencies that you have to keep up with, and sometimes organizations particularly smaller ones that might not have professionals that are on top of their legal compliance and filing obligations. Sometimes they forget teo and let this one slip, and this one isn’t the one that’s done by the accountant’s. Usually either the count didn’t sort of take care of the tax for me, the i r s forms of the state tax agency forms, but this one is a charity registration for in which you’re well aware, i am it’s part of what i do, yes, yeah, exactly, but now the penalty they’re saying it’s like, we’re really wantto, you know, wrapping up our enforcement of this, and so we’re going to say if you operate and you’ve been suspended and you could be suspended for missing filing more, filing an incomplete filing, right and again in california, we have three separate filings with the secretary of state, the franchise tax board and the attorney general nypmifa miss one of the secretary of state or franchise tax court filings that can cause you to become automatically suspended with the a g’s office as well on so just slipping on those things, which some of them are very easy to file if you know about them. I can get you suspended and then if you operate while you’re suspended and this is where they’re they’re saying, well, if if you operate while suspended the age, he has the right tempos, boardmember personal liabilities, personal liability on boardmember that must be paid by the board members from their own money. This wouldn’t be covered by insurance thiss wouldn’t be covered by the organization itself. It couldn’t indemnify that boardmember for this it’s got to come out of the board members own personal pocket for operating while suspended, and there are, you know, there may be as many as one hundred thousand organizations in california. They’re not compliant with their filing regulations and charity registration regulations. You know, i think there’s some foreign organizations that are operating here that haven’t registered properly, yeah, that’s a that’s, a lot of organizations that to be subject to this draconian regulations, gina that’s important to point out that we’re not only talking about organises non-profits that are domestic in california, what incorporated non-profit in california, based in california, we’re talking about non-profits from throughout the country who are soliciting in california, that makes you subject to those three filings franchise tax board, secretary of state and a g that you’re talking about? Yep. And i think it’s more than the estimate of i i i saw was that your blogged or someone else above estimating one hundred eighty thousand? Like, i think it was fifty thousand domestic and then one hundred thirty thousand. Beyond that, i think it’s more than that. I mean, especially if you start counting online solicitations, email the california’s, the most populous state in the country. I think i think it’s more than one hundred eighty thousand that i saw that very well could be true. I was a little bit modest with numbers just because we don’t know some of those who just sort of been abandoned and dropped out. Okay, but being yeah, there are a lot of organizations that could be subject to this, and you wonder if you, you know, when you promulgate regulations like this and now non-profits air looking for board members and they’re trying to get the the most qualified in the best and support of board members that they confined, how many people are going to go? Well, you know, i’m a little bit worried about all of these. Things and ah, again, i don’t want to run the risk because boardmember is a typically volunteers and they don’t like stay on top of sort of the technical aspects of did we actually file with all three state agencies? They typically just reviewed the irs form nine, ninety submissions, if that so, yes, this is very distressing and for operating all suspended, not only can the g hold boardmember personally liable, but they can tell the organization you must transfer out all of your assets to another organization. Holy good, even big foundation you they could say literally, you must transfer out one hundred million dollars of your assets and give it to another organization because you’ve been operating while you were suspended. Yeah, so let’s talk about let’s talk about operating while suspended. So you failed to make of some arcane filing, although i it’s part of what i do with the franchise tax board now. Okay, so you failed that now you’re suspended, suspended means you’re not feeding people anymore. You’re not sheltering domestic violence victimssurvivors anymore. You’re not protecting the waterways of california anymore because you’re supposed to be suspended. You stop work and all your employees go home without pay. Is that what we’re talking about? Suspended. Yeah, basically can’t engage in any kind of operations while suspended. And if you try to keep helping the rivers and the oceans, and the and the survivors and the victims and the homeless and hungry, then you’re liable for have for the for the penalty of having a transfer all your assets, right? That sounds crazy, right off the ventilator. It’s, it’s, it’s really crazy and non-profit i’m going to do that and what the g has said to us and i launched a campaign here tryingto kapin get the a g to reconsider this and i had independent sector the national council non-profits cal non-profits united way’s, california lines for justice, the ceo, board source the non-profit insurance alliance group all fine on this so that they recognize that there was some national attention, that there was some big concerns about this, but unfortunately did not go through and the ages view is basically trust us. Even though we’ve got these broad, broad powers were not going to abuse them and we’re going to only attack use them against the very, very bad actors, and i just think that’s bad, yeah, may start out that way, but six attorneys general from now, who knows? All right, that’s a really that’s a really impactful one for anybody. Any organization operating in california soliciting in california? I don’t want to say operating soliciting donations in california. You need to make sure you are compliant. Holy cow! Okay, let’s, move. We just have, like a minute and a half left. Jean let’s. Move the federal tax court disallowed a couple of big charitable deductions, like over several million dollars in one, because donors or not, providing proper substantiation of their deductions? Yeah, i mean, so these weren’t that long ago, and the irs always wins on these cases, by the way, when donors tried to challenge them, take always win. So charities make sure you write proper forms in the first one, which was durden versus commissioner there’s just a deduction of twenty five thousand dollars for cash contributions they they were making to their church, and the church gave them a receipt. But the receipt missed the statement that you must have for donations of two hundred fifty dollars or more. A statement that says no goods or services were provided by the organization in return for their contribution. If you miss that statement, you can’t make up for it after the person the donor has filed their tax returns. It too late. Too late. Because that’s basically screwed it’s not contemporaneous anymore. Jean right. I’m sorry. I want to leave listeners with irs publication five twenty six it’s for people who make charitable donations it’s for your donors. But it has all the guidelines in it that that your donor’s need and that you need to be providing them when it’s your when it is your responsibility? Iris publication five twenty six gene, i’m sorry we have to leave it there. Great point, though thank you very much, jean takagi. You’ll find him at non-profit law blogged dot com and on twitter he’s at g tack next week. Great show coming up very, very good show coming up, but i don’t know what it’s going to be. 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