Category Archives: Charity Registration

Nonprofit Radio for July 11, 2014: Online And At Risk? & Your Board’s Role In Executive Hiring

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Diane Oates: Online And At Risk?

Diane Oates
Diane Oates

Do you accept donations online? Have a “donate now” button? Are you using crowdfunding sites? You may need to register with lots of states, not just your own. Diane Oates is an associate assistant attorney general in the Ohio AG’s Charitable Law Section and a National Association of State Charities Officials (NASCO) board member.df




Gene Takagi: Your Board’s Role In Executive Hiring

Gene Takagi
Gene Takagi

Gene Takagi, our legal contributor and principal of the Nonprofit & Exempt Organizations law group (NEO), walks us through this important board responsibility: hiring the executive officer. 





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Hello and welcome to tony martignetti non-profit radio. I am not your act ly name host who is having a new york moment at the moment. He will be here shortly. In the meantime, enjoy the music of scott’s stein. We can’t until a rub down. With this upon in each other now. Yeah. Elearning. Hyre okay. Latto good heimans it won’t talk with clothing way. Wait, i’m just trying to. What? So i’m gonna do the best that i can. He’ll have a competition way, man. No charming. Hyre oppcoll falik yeah. Ditigal they don’t say no. Back-up miree latto in-kind no. Hello and welcome to tony martignetti non-profit radio big non-profit ideas by the other for the other ninety five percent. I’m your aptly named host and i’m very glad you’re with me and i thank you very much for holding on one hundred ninety nine shows. I’ve never been late except now next week is the two hundredth, and i’m very glad you’re with me. I’d be forced to endure biliary atresia if i learned that you had missed today’s show online and at risk do you accept donations online? Do you have a donate now button? Are you using crowd funding sites? You may need to register with lots of states, not only your own. Diane oates is with the ohio attorney general’s charitable law section and a national association of state charities officials boardmember and your boards roll hyre hi diane, hold on also, your boards role in executive hiring. Jean takagi are legal contributor and principal of the non-profit and exempt organizations law group neo-sage san francisco walks us through this important board responsibility, hiring the executive officer on tony’s take to the two hundred show lots of giveaways next week we’re sponsored by generosity, siri’s hosting multi charity five k runs and walks. I’m very glad that diana is with me. She’s an assist, associate assistant attorney general in the ohio attorney generals charitable law section. She had been with the office for eight years, managing a broad range of cases, including charitable gambling and charitable solicitation. She has handled multiple investigations and enforcement actions and is ohio’s point person for multi state enforcement actions. Diana it’s, welcome to the show. Thanks, tony for having me and thank you very much for holding on. Sorry about that. No problem. I hope you enjoyed the music. So i did, um, let’s. See, so these are laws that non-profits have to comply with, and a lot of these laws haven’t really kept up with the new solicitation methods that that charities have that’s correct. A lot of the laws are are older and do not address any sort of internet solicitations. There are such guy lines is the charleston principles which charities can follow in determining whether they need to register in a variety of states that they are soliciting online. Right? And we’ll get a chance to talk about the charleston principles. It’s, it’s uh, but there’s. There’s not only online, but then there’s also the mobile giving world, of course, and that is growing by leaps and bounds. We actually just had a multi state. They nasco it’s, the national state association charity officials put out some wise giving tips for charities on how to manage ah, and be wise on the internet when doing any sort of mobile giving or any sort of internet solicitations. So you definitely charities should be definitely protecting their brand and making sure they know who is soliciting for them on the internet. Um, and we’re going to get to that document in the wise giving tips. The primary question, i think, is what what is a solicitation? And unfortunately that really varies from state to state. You’re correct. In a lot of states, the definitions might be a little bit different in ohio. Uh, it is when a person asked for anything of value so it can’t be money can be time, and that donation would benefit a charitable organization or a charitable purpose and that’s that’s fairly consistent across the states. But there are there are nuances when you start to drill down into well, okay, so sending us mail asking for a donation. That’s, that’s a solicitation everywhere but as you start to go down, too, email. Um, having a donate now button on your site, driving people to the donate now button that’s where it starts to get a little murky across the states. Definitely and that’s, where the charleston principals come into play, and that’s where the differences arise, because i believe only two states, tennessee and colorado, have adopted the charleston principles into law. Ah, many other states, including ohio, used them as guidelines for when to determine if a charity needs to register with our state if they have such a thing as it donate now button or any sort of online solicitation. Okay, so we know that they’re adopted in only two states right now suppose you’re not in one of those two states. Can you just pick up the phone and talk to somebody and ask whether they use the charleston principles as guidelines? I would advise calling either thie, attorney general and your state or the secretary of state’s office. Whichever office has thie charity regulator located in it and see how they treat the charleston principles you could call. Up, if you’re in ohio, call up our office, we would be able to tell you we used merely as guidelines to guide us as to whether charity needs to register. Obviously, if you are located in a certain state, if you’re located in ohio and you’re soliciting from there, you would have to register anyways, if you’re not let’s, say you’re located in west virginia, then we would go through the factors with you to see if you would need to register in ohio simply by having a donate. Now button on your website. A lot of times, though, i find clients make a call like that, but ultimately the final responsive to get is always we can’t tell you or we can’t advise you whether to register, okay, that and that might be the response in some states and ohio. I mean, we we would try to help you out as much as possible. Again, we can’t give legal advice, but i mean, i think we could steer you in the right direction. Isto whether you would need to register or not looking at whether you are, you know, mailing or emailing any solicitations to someone in ohio. If you are soliciting through an interactive website meaning you can collect donations straight through that website and whether you’re these are the two big factors whether you’re specifically targeting a person in our state or whether you’re receiving donations from a purse from people in our state on a repeated an ongoing basis or substantial base so we would go through those factors and tryto work with a charity to figure out whether you need to register here or not, we would definitely do that, ok, maybe ohio’s friendlier than a lot of states that that may very well be but and i’m not saying it’s not worth the call it’s just that because it definitely is worth the call. As you said, either to the attorney, general’s office or the secretary of state, it is worth the call. This is that sometimes, you know, the ultimate answer should i register falls on. Usually it falls to the to the charity and, you know, and they’re sort of referred to their legal advisors. But it’s still worth the call because, um, you can you can get a fair amount of help. Definitely. Okay. Um, we have just about a minute or so before break, why don’t you explain what thes charleston principles are just so so everyone’s acquainted with them? Sure, they are guidelines, which, ah, charity can follow to see if they should register in a state merely if they are soliciting on the internet. So what they need to look at if they are domiciled in a state, they will probably need to register there. And what i mean by domiciled is if they have their principal place of business in that state, if they’re not domiciled in the state, they need to look at there non-cash activities, and if those alone would cause them to register in that state like they’re mailing or calling people in that state, they would need to register if they are just asking for donations through their website, and if they’re either specifically targeting people in that state on their website for donations or they’re receiving contributions from that state on a repeated and ongoing basis for a substantial basis, then they would need to register in that state all about looking at the contacts in that state. All right, we’re going to take this break when we come back, we’ll find out where we can see the charleston principles. They actually happen to be my subway read. I carry them with me all the time, and i read them every you know, like every six months or so. I just go back and read them on dh. Then diane and i will will keep talking about what’s, a solicitation on, including talking about crowd funding sites to stay with us. You didn’t think that shooting getting dink, dink, dink, you’re listening to the talking, alternate network, waiting to get in. E-giving you could this’s the way we’re hosting part of my french new york city guests come from all over the world, from mali to new caledonia, from paris to keep back. French is a common language, yet they all come from different cultures, background or countries, and it common desires to make new york they’re home. Listen to them, shed their story, join us, pardon my french new york city every monday from one to two p, m. Are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. You’re listening to the talking alternative network. Welcome back to big non-profit ideas for the other ninety five percent got lots of live listener love, let’s start domestic because we’ve got a lot of foreign listeners, of course, but let’s start domestic bethpage, new york. Many in bethpage don’t know who’s in bethpage do you know each other in bethpage live? Listen, her love to you there. Beverly, massachusetts, new bern, north carolina. I just spent some very nice time in north carolina. Thank you. New bern. Columbus, ohio. New york, new york live listener loved each of our live listeners. And, of course, there are more podcast pleasantries, of course, to those listening on the time shift with iran a treadmill car, subway, airplane, whatever you are. Pleasant trees to you. Nine thousand plus ofyou. Okay. Diana it’s. Um let’s. It’s c where can we? What? We find these charleston principles to go and read them ourselves? If we would like to do so, i believe they’re located on the nasco net website. You can go to nasco net dot or ge. Okay and that’s an s ceo net dot or ge the national association of state charities officials correct, of which you are a boardmember. Yeah, and that’s, the organization that created the wise giving tips document. So while we’re talking about finding documents, what what’s the full name of that document? Sure, it’s the internet and social media solicitations wise giving tip and the tips are for three separate audiences for charities, donors and fund-raising platforms, and it gives recommendations and tips on how to give and fund-raising wisely online. All right, the internet and social media solicitations wise giving tips and that’s also on the nasco website, right? Correct. Okay, um, crowd funding the crowd funding sites. Those raised a lot of questions. I get this a lot when i’m doing speaking, what if we are using krauz rise or deposited gift? What do who’s supposed to register them? Right? If you’re a charity again, i would direct the charity to the charleston principles. Usually on those websites, you’re not targeting a specific state unless maybe an event is taking place in a certain state. Or, you know, your charity is located in that state. So and i think it’s unclear also, whether the fund-raising platforms themselves nietzsche register with states that’s still kind of an open question, okay? And also get questions. Related when charity’s air working with community foundations and and the foundation is sort of the past through for the for the donations, the question then is who should be fun? Who should be registering and again looking at the charleston principles if it’s just a passer, entity that’s just doing some administrative work with processing donations, they might not need to register, so i would again and advise those community foundations toe look at the principles right for the community foundations and then the charity’s the same who exactly? Okay, buy-in but on yeah, as we said, unfortunately, you don’t know for sure, except for two states, whether the state is is adhering to the principles. How come, how come, why is it that more states haven’t adopted them either? Officially, i guess through their legislatures or may be not as an act of the legislature, but just officially through the office that manages the charity registration process in each state, and that is a good question. I am not. I’m not really sure of the answer there, and yeah, you should probably talk to tennessee in colorado and see how they got that pushed through. I’m not sure. Why more states haven’t actually officially adopted them, okay. Because they are really cool, and they’re called charleston principles because i believe it was a meeting of nasco that was held in charleston, south carolina, where they were. These were adopted. I think they were. The discussion started there, yes, in charleston, south carolina, that’s. Why they’re called goodbye, not okay, but maybe not adopted there. Alright, yeah, attorney holding my feet to the fire e used to be an attorney, but so now that now i run roughshod over things. So thank you for being explicit. Okay, what about? We know there’s one state where you don’t have to register. Tell us about that. I believe that. Arizona? Yes. Yes, arizona. I believe they recently did away with their registration statue. I’m not too sure about that, but that is not a growing trend that icy. Definitely. I see that kind of an outlier. Okay, okay. So one point does not one data point does not make a trend that can’t even make a line from one point. Okay, but yes, arizona has explicitly said charities that are on ly soliciting in our state. I don’t need to register and yeah, they had a statutory system around registration and that was repealed or, you know, largely repealed. Yes. Now you made a point earlier that we wanted i want, like, just liketo amplify your home state where your incorporated that we should certainly be registered there. Yes, than any place where you have any principal place of business as well. Okay, so differentiating the inc you’re you’re only incorporated in one state, right? Because you’re not you’re not not-for-profits corporation, and that can only be one state. But you could have places of business in lots. Of states, you can have the principal place of this that’s, probably in one state. But then you can have multiple locations everywhere. And if you’re, you know, conducting solicitations from those locations. And yes, definitely you should be registering in those states. Now, you’re, um, your, um, important player in this because you’re a nasco boardmember but it’s so. Divers, because we’re fifty difference sets of statutes and, um, timetables and fees and things do you do you get frustrated by this process? It it can get frustrating. And we definitely hear from our constituent charities that it is frustrating and that’s why we do have twelve states that are working on a single poor product, the website where charities khun go and register and they wouldn’t have to duplicate the process over and over again. Okay, this is the single portal initiative. Exactly. What more can you tell us about what state that is? Or i don’t mean state. You know what state it’s in, etcetera? What can you tell us? Uh, well, the single portal project is being headed by twelve pilot states. They include california, illinois, alaska, colorado, connecticut, hawaii, massachusetts, michigan, mississippi, missouri, new hampshire and tennessee. And basically it’s, a project that has a three components. One obviously is to create a unified elektronik registration system that will allow non-profit organizations and then they’re professional fundraisers to goto one site and fulfill their registration requirements for all states eventually at that site. Another component is also to be a public website where anyone can get this information that’s filed. Academics could get it. Tio create analysis of emerging issues and trends. The public can look up this information to make more informed choices about their charitable giving and also non-profits can look up this information to compare thie effectiveness and cost of their professional fundraisers that they hyre and third, this would be a great tool for regulators. They could direct their limited resources away from registration and toward their core purpose of preventing fraud and misuse of charitable funds. Is this? Ah, envision to be a free site for charities? Um, that is a good question. I not sure about that. I know that this is kind of a three year time period where they’re going to try to get this off the ground rather soon and have it build up in phases over the next three years. I am not sure about the fees. I do not know that. Ok. Ok. Um, timetable do what stage is it at now? It is at the beginning stages. Thie pilot states created a nonprofit organization in delaware. Teo, help develop and operate the website. And they just decided that the urban institute they chose them to design and build the single portal website so it’s in the process of being built. And they are also establishing an advisory committee to help with the design and operation of the system. Okay, is it is it funded yet? Or were steven still too early for that it’s in the process of funding and the the non-profit, the multistate registration of filing portal the non-profit that was formed is reaching out to the non-profit community. Now, with grant proposals to help build up funds for this project. Okay, so that’s, something to look forward to. So is there not yet a timetable like when this should be live? Or maybe not all twelve states, but at least some initial minimum viable version. I think. I mean, the goal is to roll out the stages in the next three years. So hopefully in the next, maybe two years, the registration sites would be up and running. But please don’t call me that. Okay? Okay, we won’t. Nobody listens to this show anyway. Diane, show you fine. Okay, well, we know that arizona standing alone. Not a trend, but are there any other trends that you do see coming? Up the big trend icy is internet fund-raising on and that’s why nasco did put out this wise internet giving tips the internet fund-raising on the internet is growing. I believe in two thousand three it was about six point four percent of all charitable giving, but still it’s growing lead some bounds year by year. So we were really urge charities teo be aware of their presence on the internet and be aware of who’s raising money for them on the internet. Ah lot of thes fund-raising web sight they download the database of charities from guide star and then anyone can just go on and start fund-raising for a charity, which is great, but you also want to make sure that no impostors are going out. They’re in claiming that their associate it with your charity and trying to gain access to your donations. So check out the wise giving tips on also the charleston principles those will help you on, and we’ll put, ah, put links to those on the takeaways from the show, which go up on the facebook pages. Afternoon diane, please leave us with the nasco conference that the charities are welcome to come. Too, jeff, definitely the two thousand fourteen nasco conference is on monday, october six, at the hyatt regency washington on capitol hill in washington, d c thie theme this year is the evolving role of charitable regulation in the twenty first century. There are a lot of great panel scheduled i’ll just mention a couple first will be disaster relief and opportunities for collaboration between regulators and the not for profit sector. Um, our luncheon topic is our charities really charitable with our keynote speakers? Thomas kelly, who is a professor at u n c school of law, and john columbo, who’s, professor and interim being at the university of illinois at chicago school of law and then one panel, i think it’s going to be extremely interesting about ratings and evaluating charities. We have three panelists, art taylor, who is president and ceo of the better business bureau wise giving alliance daniel bora chop, who is president of charity watch, and ken berger, who is the ceo of charity navigator. And then we also have panels on a messa you bit executive compensation are wise giving tips and then also a single portal updates, so it should be a great conference. And you can get more information about the conference at nasco. Nat dot org’s. Thank you very much. Art taylor and ken berger have been guests on the show when we did the the sabat the myth. The what was it? The overhead myth letter that’s, right? We have the three signers of the overhead myth letter on and those they were two of them. All right, diane. Thank you very much. Thank you. My pleasure. Diana, associate assistant attorney general in the ohio attorney general’s charitable law section. That is fund-raising compliance and of course, very, very important. But what about fund-raising? Fun generosity. Siri’s david linn is the ceo. Generosity. Siri’s is a sponsor, and they host multi charity peer-to-peer runs and walks. I am seed. Their event in new york city. It was in brooklyn last november. It was a cool day, but it was it was great fun. They had ten or twelve charities as charity partners in the run walk. There were about one hundred fifty or so runners. So neither charity. None of the charities had enough runners for their own event. But when they pulled themselves under generosity siri’s it was a very successful event they raised collectively about one hundred little over it was over over hundred thirty thousand dollars for these ten or twelve charities. So that’s, what generosity siri’s does, they put smaller charities together. You can’t host your own or you don’t. The resource is teo host your own and they take care of all the back end stuff like permits and timing chips and medals for the runners and the sound system and the porta potties. This this is a do all of that. And there were enough port a potties too. We did not have to wait online. They had an ample supply of those. So david lin is the ceo. You can, you know, do business the way i do it, which is picking up the phone and talking to people. They are at seven one eight five o six, nine, triple seven. They’re also, of course, on the web. Naturally, you could go to the web, get information there, too. I prefer to pick up the phone, but you could go to the web generosity siri’s dot com. If you’re thinking about a five k run or walk maybe fitting into europe fund-raising please talk to dave lynn. Next week is the two hundredth non-profit radio two hundred show would be doing this show once a week for four years. Next month, scott stein is going to perform that song that you heard earlier he’s going to be here and live with his eighty eight keyboard eighty eight full full length keyboard he’s bringing it um, he’s going to perform cheap red red wine here, creative producer claire meyerhoff is going to be in the studio. All of our regular contributors are gonna be calling in, including jean takagi who’s going to be with us very, very momentarily on i want you to be part of the show as well, and i’m giving away prizes to welcome you to the show and to thank you for being a part of it. Tell me your most touching donorsearch story here. Tell me why you love non-profit radio either one of those leave a comment at tony martignetti dot com or use twitter those the two ways you join comment on the site tony martignetti dot com or on twitter using the hashtag non-profit radio your most touching donorsearch story or why you love non-profit radio if i read yours on air, i’ll send you a prize and you know, i’m getting i’m quite liberal about what i read on air and donorsearch torrey and your stories on air, so i love shouting out listeners, so there’ll be a lot of giveaways. I just got a new one today. Bye. I sent the email this morning email blast for today’s show and pamela gro donated a free course for a listener, so we’ll be giving away a free pamela grow course. We also have ah, bags of coffee from cura coffee. Want to thank your coffee also have a one year subscription to non-profit times. Thank you non-profit times. Joe garrick, the fund-raising authority he’s at fund-raising a u t h on twitter, he donated a book, lots of books from all the authors who had been on the show. I’ve got a library sitting in my office. It may as well be helping those books may as well be helping you, so i’ll be sending all those out too. So that’s the stuff will be giving away. Plus whatever else you might. We just got pam grow today. So who knows what what else might be available come next. Friday deadline adjoined contest one p m eastern next friday the eighteenth. That is the two hundredth show time. And that is tony’s. Take two for friday, eleventh of july twenty seventh show of the year, one hundred ninety ninth non-profit radio jean takagi he’s with us. You know him? He’s, the managing editor, attorney at neo non-profit and exempt organizations law group in san francisco. He edits the very popular non-profit law block dot com on twitter he’s at g attack g ta ke jin takagi welcome back. Hi, ton in. Congratulations on one ninety nine. I’m looking forward to two hundred next week. Cool. Yes. I’m glad you’re gonna be calling in for with us. Thank you very much. Thank you, it’s. Very exciting. Really? One hundred ninety nine shows ago. It’s one hundred ninety nine weeks. It’s it’s. Remarkable. Um, we’re talking this week about the board’s role in hiring the executive. And i’ve i understand that there are a lot of executives in transition. I think so, tony and it looks like some surveys have confirmed that it’s certainly been an experience with some of my clients and even on boards, i’ve sat on over the last couple years and there’s a great group called compass point out in san francisco, there, nationally known as one of the most respected non-profit support centers and together with blue avocado on non-profit online publication, they have a national survey on leadership succession in transition going on just right now, the last time they published the results with in two thousand eleven, and they found that sixty seven percent of current executive anticipated leaving within five years and ten percent. We’re currently actively looking to leave right then, and in two thousand eleven, the economic times weren’t so were so great, so sixty seven percent anticipating leaving within five years that’s a pretty staggering number. So now we’re already three years into that survey into that five year projection. Yeah, and sixty seven percent of two thirds. So if we had held this show off until two thousand sixteen, then it would have been moved. But there’s a new one coming out, you said, yeah, well, they’re they’re just starting the survey online now so you can participate on that. I don’t know the website, but if you you know, google non-profit transition survey executive transition survey thank you. You’ll get that okay, and its compass point it’s a compass point and blew up a goddamn kottler who you’ve. You’ve mentioned blue vaccaro before. I know. All right, so, yeah, two thirds of of ceos were expecting to be in transition within five years and where we’re only three years into it now. So the presumably these people are still looking. What boards don’t really spend enough time preparing for this kind of succession, do they? Well, you know, in many cases they don’t, and sometimes, you know, they might stay, they don’t get the chance because their executive director comes up to him and give him two weeks notice. And now, you know, the board may be used to meeting every month or every other month or even every third month, and now all of a sudden they’ve gotta ramp up their efforts and find an executive to come in in two weeks. That’s going to be really tough to do on dh, you know, again, if we say at any given time, two thirds of the non-profit executives are looking to leave their job, you know, it’s very likely that within your board term, you know, you may have an executive transition to manage, and sometimes with very little notice. So that’s that’s. Why? I think succession planning is just really a core duty non-profit board. Well, how do we let them get away with this two week notice? I mean, the ones i typically see are you know, the person will stay on until a successor is found. You that’s. Not your experience. Well, you know, you’re really lucky if you if you do get that situation, i think most non-profit executives are hired on at will basis. Meaning that there’s, not a contract to stay there for a given number of years. Either party can khun separate or terminate the employment relationship at any time. And as the average, you know, employee may give two weeks notice to go on to another job there. Many executives who feel the same way that they, you know, they may feel like they own allegiance to an organization. But another opportunity comes up and it’s not going to be held for them forever. And they may want to move on. Um, and they may feel like what they gave the board really advanced notice that they might be looking for something that they might get terminated. So they may keep that information from the board until those last two weeks. Well, because all right, so that i am way in the dark because i would. I just presumed that executive directors, ceos even if small and midsize shops were not at will. But they were but that they were contract. I mean, when i was a lonely back in my days of wage slavery, director of planned e-giving i was in at will employees, which means you can end it like you said, you could end at any time and so can they like, if they don’t like the color of your tie one day they can fire you, you’re at will, but but that that’s typical for for ceos and and executive directors. Yeah, i think for smaller non-profits it’s very, very common. Oh, i just always assumed that these were contract positions with termination clause is and no, okay, but, i mean, you know, it’s, your practice, i’m not i’m not disagreeing with you, i’m just saying i’m okay, i’m learning something s so that’s that’s incredibly risky. So it is. It put you in that position of saying, well, i need to replace somebody immediately and i don’t you know, as a board we don’t meet very often can we even convene within the two weeks to start the process going, it’s going to be so much better if he had a plan of what happens in case you know, our executive every doesn’t give two weeks. Notice, and even if the executive says, you know, in your scenario, maybe a longer notice, maybe, you know, in six months, if they do have a contract at the end of my contract, i don’t plan to renew, you know, i think we should go through the process of looking for for a successor and having a plan or thinking about that plan that have just coming up with something on the fly is going to probably result in a much better choice for selection of a leader in the future and that’s going to be critical and how well the organisation operates and how the beneficiaries of your organization are going to do are they going to get the benefits of a strong organization, or are they going to suffer because the organization can’t do it? You can’t advance mission as well? It should. Yeah, i mean, you’re you’re calling it on the fly. I would say two weeks notice for an executive director. Departing is a crisis, even four weeks notice. Yeah, in many cases, you’re absolutely right. Okay, i’m right about something. Thank you. You’ve got something right today. All right. So what do we what? Do we do teo to plan for this? Well, you know, i think the first thing the board has to do is start toe think about the contingencies. So what do we do and then actually want one thought that comes to mind, that, uh, that you raised tony is should we get our executive director on an employment contract? If they are and that will employee do we want to lock it in? And they’re sort of pros and cons with that? If you’ve got, like, not the best executive director in the world, terminating somebody on a contract becomes much, much more difficult than if they were at will employees. So, you know, you kind of have to weigh the pros and cons, but, you know, revisiting your current executive director her and the employment relationship is maybe step one, and suddenly he was thinking about, well, do you have a really strong job description that really reflects with the board want of the executive director and the basis on which the board is reviewing the executives performance on dh? Maybe the sort of initial question to ask in that area is do you actually review the executive? Director. And that the board you absolutely should you and i have talked about that the board’s is not part of their fiduciary duty to evaluate the performance of the the ceo? Yeah, i think so. I think it’s a core part of meeting their fiduciary duties that really, you know, as a board, if you meet once a month or once every couple of months or whatever. What’s more important, you know, then really selecting the individual who’s going to lead the organization in advancing its mission and its values, and implementing your plans and policies and making sure the organization complies with the law. Taking your leader is probably the most important task that the board has, because the board is delegating management to the to that leader. Yeah, absolutely. And i think it’s often forgot naralo overlooked that individual board members inherently have no power and no authority to do anything so it’s only as a group when they meet collectively, can they take aboard action? So for individuals to exercise, you know, powers on behalf of the organization that has to be delegated to them and typically the person responsible for everything is that ceo or the executive director. We’re gonna go out for a break, gene. And when we come back, you now keep talking about the process. The what goes into this process, including the job offer. So everybody stay with us. You’re listening to the talking alternative network. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Talking alternative radio twenty four hours a day. I’m dana ostomel, ceo of deposit, a gift. And you’re listening to tony martignetti non-profit radio. Big non-profit ideas. As for the other ninety five percent? I gotta send live listener love, let’s, start in japan with tokyo kiss or a zoo and nagoya. Konnichiwa, seoul, south korea, seoul, some someone south korea, always checking in love that anya haserot. Moscow, russia, mexico city, mexico, ireland. We can’t see your city ireland’s being masked for some reason, but we know you’re there. Welcome, welcome, ireland, and also taipei, taiwan. Ni hao, nobody from china, that’s, funny, nobody from china today, coming back to the u s, we got cummings, georgia, in ashburn, virginia. Live listener love to you in georgia and virginia. Okay, gene. So now we’ve let’s say, we’ve learned that our executive is departing and let’s not make it a crisis situation, though let’s say this person is generous enough to give six months notice, so, you know, let’s, not make it a crisis. Where what’s our what’s, our what’s, our first step as the board. Terrific. And i’ll just add, even if you don’t, if you know your executive is not leaving any time soon and i think you should go ahead and start this process anyway. Oh, yeah, clearly we should be. We should have a succession plan in place. Yes, we’ve talked about it. Right? Okay, yeah. So i think the first thing to do is get a committee together so it might include boardmember some outside experts outside with the board. If you don’t have that internal expertise and just getting different perspectives out there, some of your other stakeholders might be really important. In what? You know what you want to look for in an executive in the future. So get that committee together first. Get the buy-in of the current executive director. So unless it’s going to be, you know, a succession plan for a termination? Yeah, we’re really unhappy with executive director, right? Let’s not get into that. Yeah, let’s get their buy-in and have them help in the process. Especially with your scenario where they’re giving us six months notice and everything is amicable. Let’s, you know, see she who knows better about the organization than the executive director that’s in place right now. So i’m getting there buy-in and help contribution. I think it is pivotal. Does this committee have to be comprised of hr experts? Why? I think having a least one or two hr experts is going to be really helpful. But i i think it’s more than that. It’s, you need program people who understand what the executive, you know, role is no respect advancing the program. You need the fund-raising people to know. Well, what is the going to do with respect to fund-raising perhaps the seeds, the lead fundraiser and some small organizations as well. So we need thio gather a bunch of different people with different perspectives and expertise to figure this out. And i think that’s a very good point to include a tte least aa program expert. Now, could this committee include employees, or does it have to be sure you can i absolutely on dh, you know, you might even have have have different subcommittees in there. So eventually this is going to go up to the board. But as the the committee is doing the legwork for determining what you need an executive director and putting together a job description and and, you know, perhaps, but the performance evaluation is going to be based on for the future executive director all those things can get, you know, we’d be aided by the contribution from several areas. Okay, okay, what are your thoughts on hiring a recruiter vs vs? Not well, you know, i think it depends upon what the organization’s resource is our and the organization should understand the marketplace it’s in a swell hiring two great executive director is the competitive thing. So, you know, if you’ve got a lot of resources and you’re able to you want to allocate an appropriate amount of resource is tio what i think again is making one of your most important decisions of the board? I don’t think you want to do this on the cheap at all. I’m just the same way i didn’t want you to do it on the fly or or or are in a rush matter-ness think you want to invest in this, and if you don’t have great expertise inside about things, about, like, doing job interviews and doing background checks. On the sex thing, you know how to differentiate between one candidate and another when they all look good on paper and when they’re maybe professional interviewees, but they’re not there, maybe not great leaders. How do you figure all those things that if you don’t know, that on executive search firm could be a great help and it can just open up the marketplace of potential candidates as well, especially if they, you know, decide to do a regional or even a national search, it really can ramp up who who you’re going to see in front of you and the quality of the candidates that this election comedian the board eventually will have to choose from. Okay, does the committee now come up with a couple of candidates to bring to the board, or is it better for the committee to choose one and bring that person to the board? How does this work? You know, i think the committee should be tasked with bringing several candidates up on sometimes it may be a multi tiered process so they might go through two rounds of screening, for example, and and at least let the board see who’s made. The first cut, and then and then, you know, present to the board, the final, perhaps two or three candidates. If you’ve got, you know, ones that are very close and in quality in terms of what the board want in an executive director, i think that’s pivotal. I wanted to add one thing, though. I’ve seen this done before, tony and i don’t really like it and that’s when. If a search committee or such altum comes up and says, you know, to the board, tell me what you want in a good executive director, everybody you know, spend five minutes, write it down and send it to me or take it home and email it to me and tell me what you want. And then the search consultant collates the the answers and then that’s, you know, the decision about that’s what’s going to be the qualities you’re going to look for. I think this needs a lot of discussion and deliberation and the value of, you know that that thought process and that really difficult thinking and getting all those generative questions out there is going to produce a much better product in terms of what you’re looking for and who you can get and how you’re going to do it. Yeah, you you send this tio use email and, you know, it’s going to get the typical attention that an e mail gets, like a minute or something. You know, it’s it’s going to get short shrift. And your point is that this is critical. It’s it’s, the leader of your organization you want, do you? Want the contributions of the committee to be done in, like a minute off the top of their head just so they can get the email out of their inbox? Yeah, definitely we could talk about board meetings and another show, but put this at the front of the meeting and spend, you know, seventy five percent of your time talking about this. This is really, really important, okay, you have some thoughts about compensation, and we just have a couple minutes left. So let’s let’s say we’ve the board has well, i can’t jump there yet. Who should make the final call among these candidates? Is it the board? Yeah, i think it should be the board that makes the final approval, but they they’re going to put a lot of weight based on what? The executive of the search committee, you know, tell them who they’re good. You know, the recommendation is okay. And i think that toe add one more thing to it is make sure the organization looks good to clean up your paperwork and your programming and even your facilities. Just make sure you’re going to be attractive to the candidate as well, because if you want to track the best, you better be looking your best as well. Okay. Okay. And the with respect to compensation now, we’ve talked about this before. What? What’s excessive. And there should be calms and things like that, right? So it’s really important to make sure that the board or unauthorized board committee one that composed just board members, approved the compensation before it’s offered to the candidate. Even if you don’t know that they’re going accepted or not, once he offers out there that compensation package, total compensation should have been approved by the board. And you want to do it with using the rebuttable presumption of reasonable procedures unless you know its far below market value. Okay, if you get payed accessibly or if you pay somebody excessively, there could be penalty taxes for everybody. Including the board. Should be careful of that. We have talked about that rebuttable presumption before. Yeah. All right, then. We have to leave that there. I look forward to talking to you next week on the two hundredth great. Congratulations again. And i look forward to it as well. Thank you, gene. Gene takagi, managing attorney of neo the non-profit. And exempt organizations law group, his blog’s non-profit law block dot com and on twitter he is at g tak next week. Oh, did i mention it’s? A two hundred show joined the contest. Tell me your most favorite donorsearch story most touching donorsearch torrey or why you love non-profit radio before show time one o’clock eastern next week use tony martignetti dot com or twitter with the hashtag non-profit radio very big show next week. If you missed any part of today’s show, you’ll find it on tony martignetti dot com remember generosity siri’s keep them in your thoughts and prayers there. A sponsor for the show. Talk to dave lynn seven one eight five o six nine triple seven or generosity siri’s dot com our creative producer is claire miree off will be in the studio next week. Sam liebowitz is our line producer. He’ll also be in the studio next week. But he’s here arika so social media is by julia campbell of j campbell social marketing and the remote producer of tony martignetti non-profit radio is john federico of the new rules this music is by scott stein. He’ll be in the studio next week be with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent. Go out and be great. They didn’t think the tooting getting dink, dink dink. You’re listening to the talking alternate network. Get him. Nothing. Cubine are you stuck in your business or career trying to take your business to the next level, and it keeps hitting a wall? This is sam liebowitz, the conscious consultant. I will help you get to the root cause of your abundance issues and help move you forward in your life. Call me now and let’s. Create the future you dream of. Two, one, two, seven, two, one, eight, one, eight, three, that’s to one to seven to one, eight one eight three. The conscious consultant helping conscious people. Be better business people. Hi, i’m ostomel role, and i’m sloan wainwright, where the host of the new thursday morning show the music power hour. Eleven a m we’re gonna have fun, shine the light on all aspects of music and its limitless healing possibilities. We’re gonna invite artists to share their songs and play live will be listening and talking about great music from yesterday to today, so you’re invited to share in our musical conversation. Your ears will be delighted with the sound of music and our voices. Join austin and sloan live thursdays at eleven a. M on talking alternative dot com, you’re listening to talking alternative network at www dot talking alternative dot com, now broadcasting twenty four hours a day. Have you ever considered consulting a road map when you feel you need help getting to your destination when the normal path seems blocked? A little help can come in handy when choosing an alternate route. Your natal chart is a map of your potentials. It addresses relationships, finance, business, health and, above all, creativity. Current planetary cycles can either support or challenge your objectives. I’m montgomery taylor. If you would like to explore the help of a private astrological reading, please contact me at monte at monty taylor dot. Com let’s monte m o nt y at monty taylor dot com. Are you suffering from aches and pains? Has traditional medicine let you down? Are you tired of taking toxic medications, then come to the double diamond wellness center and learn how our natural methods can help you to hell? Call us now at to one to seven to one eight, one eight three that’s to one to seven to one eight one eight three or find us on the web at www dot double diamond wellness dot com. We look forward to serving you. Told you. Hyre

Nonprofit Radio At 14NTC

2014 Nonprofit Technology ConferenceNonprofit Radio will be at the Nonprofit Technology Conference this week, hosted by Nonprofit Technology Network (NTEN). I’ll be on the stage in the Science Fair interviewing lots of NTC’s smart speakers all day on Thursday and Friday.

I’m giving away an hour of free consulting! Drop your card to get weekly show alert emails and you’ll be entered to win a free hour of Planned Giving or Charity Registration consulting.

Not going to NTC? Enter on Twitter! All this week, tweet “#NonprofitRadio is at #14NTC!” I’ll pick a separate online winner!

Here’s a mere sample of interviews I’ve got lined up. I’ll play them on Nonprofit Radio in the coming weeks:

  • Facebook strategies
  • Career strategies for women in tech
  • Choosing the right CRM
  • Bridging the gap between social & CRM
  • Intro to Creative Commons
  • Your board & IT
  • Marriage counseling for IT & communications

There’s more! Along with NTEN CEO Amy Sample Ward, I’ll introduce conference sponsors who will be on stage showing their wares and services during lunch hours.

If you’re at NTC, come by the stage, chat me up and enter to win an hour of free consulting!

“Demystifying Charity Registration” at The Foundation Center



On Tuesday, March 11, I’ll deliver Demystifying State Charity Registration Laws at The Foundation Center in New York City. We’ll go from 10am to noon.

Here’s registration info. It’s free!

These are the requirements in 49 states and DC, that you be registered with state authorities in each state where you solicit donations.

If you have a “Donate Now” button on your site you’re soliciting in at least half the states. Likewise, if you send email or US Mail solicitations or host events where someone asks for money, you’re soliciting in the states where your messages land and the events take place.

Here’s what you’ll walk away knowing:

  • how to protect your officers and board by getting into compliance
  • what these registration laws are
  • why compliance is more important now than it has been in the past
  • how to know where you need to register
  • how exemptions work
  • specifics of New York state registration
  • a plan to prioritize and get started

Along with a colleague, I delivered this a few weeks ago at The Support Center. An attendee wrote:

“Well done, useful & timely workshop. This issue is lurking below the surface and should be made better known.”

I agree. I’m working on it. 

Someone else believed the program, “Might help our clients evaluate where to focus their registrations.” Cool. I always have consultants in the audience.

I promise you’ll walk out knowing a hell of a lot more than you know now. I hope you can be with me!

Here’s registration info. It’s free for Pete’s sake. 

My slides are below.

Charity Registration Roundup

Image by jiiji, Flickr Creative Commons license
Image by jiiji, Flickr Creative Commons license

Charity Registration—the requirements that charities register with state authorities in each state where they conduct solicitations for donations—doesn’t change much, so I’ve been holding a bunch of news for a roundup. Each state has its own fee structure, timing, definition of “solicitation,” exemptions and sheath of forms (there’s some uniformity here, but also lots of variation).

These laws are a morass. Good thing they don’t change often.

Here’s what I’ve got:

Delaware will tighten registration. I always advise clients to register as a foreign corporation doing business in Delaware. Other states, too. I am quick to add that other consultants disagree with me, saying those states without charitable solicitation acts don’t require registration. The answer hinges on what is “doing business” in a state, and I believe soliciting donations is doing business (unless a state like Nebraska says otherwise).

The question will soon be moot in Delaware because a bill that has the support of the state’s nonprofit association, Delaware Alliance for Nonprofit Advancement, seems likely to become law, enacting the Delaware Charitable Solicitation Act of 2013.

Really want to read it? OK.

Beyond the “foreign corporation” registration, which is not devoted to charitable work, since 1996 the state has had a statute mostly limited to fraud prevention in solicitations. That law will be replaced by the new act.

Arizona repealed registration. Last summer, Arizona eliminated registration. The secretary of state says any filing after 9/13/13 will be returned.

Unless you’re a vets organization. Then you must register with this form. That’s part of my adoration for Charity Registration: the string of laws, exemptions, exceptions, and exceptions to the exemptions. In each state.

Another person has a sense of humor with all this. I laugh at it often. I’m not alone. From @salmanj10, this 2010 tweet: “London hostage/death threat. Look for charities with long standing charity registration.”

It’s just as bad in the U.S.

New York made a small change. The Nonprofit Revitalization Act passed in December with a positive change in registration for all charities soliciting here, regardless of where you’re incorporated. The threshold for submitting an audited financial statement is $500,000 in annual gross revenue, up from $250,000.

That’s good news! I’m all for making it easier and less expensive for small- and mid-size charities.

The new law makes sweeping changes for nonprofits formed in New York around governance, conflicts of interest, financial oversight and whistleblowers. (NY attorney general’s press release)

Most of the provisions take effect this July 1. You really don’t want to read this beast. Trust me. OK, it’s your life.

United Way ED resigned. The executive director at United Way of the Virginias resigned after it came to light late last year that the organization lost its charity solicitation authority back in 2008, for failure to keep up with registration.

As much of a morass as it is, you have to keep up with Charity Registration.