Tag Archives: Andy Robinson

Nonprofit Radio for May 31, 2021: BFD: Board Financials Dilemma

My Guests:

Andy Robinson & Nancy Wasserman: BFD: Board Financials Dilemma

What do you do for board members who can’t read your balance sheet? The authors of “The Board Member’s Easier Than You Think Guide To Nonprofit Finances” can answer that. Andy Robinson and Nancy Wasserman explain why understanding finances is critical so board members preserve your good work and protect themselves. Do their eyes glaze over when the numbers come out? We’ll help your board achieve financial literacy.

This originally aired on March 2, 2012 as show #81. This is show #540. Take a trip back in time with me. Of course, in 2021, your board members still need to understand your financials.






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[00:00:11.44] spk_0:
Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host and it’s March 2nd 2012.

[00:00:32.74] spk_3:
Who is that low energy uninformed imposter and that music. It’s May 31, This week’s show maybe from the deep archive, but that doesn’t mean we bring back a

[00:00:36.73] spk_0:
Host from six ft under.

[00:00:49.24] spk_5:
Hello and welcome to tony-martignetti non profit

[00:02:24.44] spk_3:
Radio big non profit ideas for the other 95%. I’m your aptly named host of your favorite abdominal podcast. Oh I’m glad you’re with me. I’d get slapped with a diagnosis of Takayasu says arthritis if you inflamed me with the idea that you missed this week’s show B. F. D. Board financials dilemma. What do you do for board members who can’t read your balance sheet? The authors of the board members easier than you think. Guide to nonprofit finances can answer that. Andy Robinson and nancy Wasserman explain why understanding finances is critical. So board members preserve your good work and protect themselves. Do their eyes glaze over when the numbers come out, we’ll help your board achieve financial literacy. Yes. This originally aired on March two, That was show # 81. This is show # 540. So take a trip back with me in time. Of course, In 2021, your board members still need to understand your financials, Antonis take two planned giving accelerator. We’re sponsored by turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o. Here is B F D Board Financials Dilemma.

[00:03:08.34] spk_0:
Andy Robinson provides training and consulting for nonprofits in fundraising, board development marketing and earned income. He specializes in the needs of groups working for human rights, Social justice, environmental conservation, historic preservation and Community development. Nancy Wasserman has over 25 years of experience in community finance and social enterprise development. Her particular skill is working with clients on projects that must satisfy both financial and social or community goals. They worked together to co author the book, The board members easier than you think. Guide to Fund to nonprofit finances, published by Emerson in church. And I’m very glad that their collaboration brings them both to the show. Andy nancy. Welcome. Thank you.

[00:03:17.16] spk_2:
Thank you. tony

[00:03:18.37] spk_0:
Pleasure to have you both Andy. Pleasure to have you back

[00:03:22.21] spk_2:
to talk

[00:03:22.98] spk_0:
with you again. Thank you Nancy. Why is this important for board members to care about the financial condition of a charity?

[00:03:45.04] spk_1:
Because that’s really what your charges as a board member, you have the responsibility to make sure the organization is achieving its mission, and the way the best way to do that is to make sure it has the resources it needs to do it. Um And the financial statements and the finance, nonprofit finances is how you know, um pretty quickly what’s going on, especially if you’ve you’ve got that information. You also have some responsibilities to the community um to deliver non profit um uh that does achieve its mission and does it in a responsible and fiduciary fiduciary appropriate way.

[00:04:15.65] spk_0:
So board members are have a fiduciary duty to the charity, right?

[00:04:20.82] spk_1:
Absolutely to the charity and to the public at large.

[00:04:25.06] spk_0:
So why do you say the public at large?

[00:05:01.24] spk_1:
Why? Because the the uh in the U. S. The Internal Revenue Service typically gives charities a uh nonprofit designation which allows them to receive contributions and issue um tax deductible receipts. And because the US is for going that tax um on those on those dollars and giving the public a public benefit, um the IRS exercises oversight of non profit charities and make sure that they really are, um, delivering on their charitable

[00:05:03.78] spk_0:
purpose. So, there is some public money in here. It’s foregone foregone tax revenue

[00:05:10.61] spk_1:
at a bare minimum. Often there’s also, uh, direct public money from government grants or government contracts.

[00:05:19.64] spk_0:
And how about, um, financial problems that can occur within the, within the, um, within the charity? Like, um, you bring out an example in your book of, uh, people not getting their salaries paid, things like that,

[00:05:44.34] spk_1:
you know, you there is that, that oversight potential here, you’re, you are running a small business and, um, you want to make sure that your employees are well cared for, that you’re achieving your mission in, in the world at large. Um, sometimes in, in charities will see folks um, you know, giving up salary, um, and, or, um, deferring payment um, out of the goal of achieving the mission of the organization in the long term, um, that seriously hurts the organization because um, people aren’t really watching what’s happening with the money. Where is it coming in? Where is it going out?

[00:06:14.34] spk_0:
And Andy? Um, isn’t there potential personal liability for board members? When when there are problems like this, like nancy’s describing?

[00:06:21.51] spk_2:
Well, let me do the disclaimer here, which is that neither nancy nor I or attorneys and we can’t give people legal advice.

[00:06:34.24] spk_0:
Okay, Well, there’s no, yeah, I know we haven’t, nobody’s giving you a, I don’t know. The listeners have not given you a retainer fee, so not yet. No.

[00:06:54.34] spk_2:
Okay. I will say this. Um, if there is non payment of payroll taxes, for example, if a sensation goes into debt doesn’t pay the I. R. S. Or state taxing agency’s board members are individually liable for that. Most most expenses. Board members are protected from being personally liable on but there are some exceptions. So I don’t know that that’s what drives this conversation. Board members are simply looking at the balance sheet as a way of making sure that they’re not personally liable. That’s one level on this conversation but there’s a whole lot more levels having to do with the stuff that nancy was talking about. Are we being efficient meeting our mission? Are we tracking our work so that we know we’re being effective and that’s really what financial management is about.

[00:07:41.24] spk_0:
Indeed. Okay. There’s certainly a whole spectrum of reasons why board members should care. I just wanted to bring out the last one which is, there is the potential of, of personal liability. Um, let’s see. Um, we have just about a minute before a break and I’m hoping nancy, why don’t you introduce the idea of the financial dashboard and then we’ll talk a lot more about it right after this break.

[00:08:27.44] spk_1:
Sure. The financial dashboard is something we introduced that, that really gives you a one page sense of how the organization doing. What I’ve found happens with a lot of Nonprofits is that they, um, they give their boards just reams of paper and um, all of a sudden you get the budget and the performance and the balance sheet and there’s 15 pages of financial statements and most board members, even ones who do know how to read financials don’t plow their way through it. And so the dashboard is essentially a one page um, opportunity to get a sense of um, how are you operating financially? Are you being efficient and um, are you having an impact?

[00:08:36.84] spk_0:
Andy I want to throw a question to you quickly. We got a question on twitter from Mazarin. What if an executive director was found stealing one of the things nancy? And I were talking about uh, kind of fraud issues earlier. Um, would you give them a second chance?

[00:09:12.94] spk_2:
Oh boy. Um, well, I’ll be curious to hear nancy’s answer to this. My initial response No, followed by. It depends. And um, I actually was on the board of an organization where we found the opposite problem, which was the board Executive director was pouring money into the organization. He emptied out his retirement account, but he wasn’t telling anybody he did this because the grants weren’t coming through and he was too embarrassed.

[00:09:24.35] spk_0:
So that’s a, that’s a, that’s a problem of being over generous though,

[00:09:28.57] spk_2:
it was paying for himself. We ended up firing the guy and the reason was he wasn’t disclosing to the board what the board needed to do its job. And I would say the issue in that case isn’t so much as misdirection lying. So I am obviously theft is a bad thing, but the board needs full disclosure from the executive director to be able to do their job well. And that’s really where I would go on that.

[00:09:57.14] spk_0:
And how about you nancy? Uh Andy was curious to hear your answer and

[00:10:35.14] spk_1:
I know I would say um again like Andy, it depends um probably depending on the amount of severity and this situation. Um You know, if if the executive director was borrowing $20 from the petty cash um when they forgot to bring um their wallet to work one day. Um clearly that’s not, not egregious enough to to fire somebody. But if uh they’re helping themselves to the uh to the checking account and redirecting grants into their own bank account probably caused fire them

[00:10:41.92] spk_0:
even if they pay it back. Right. That really, even if they pay back with interest, that really doesn’t

[00:11:01.04] spk_1:
matter, does it? I mean, the thing about nonprofits is, you know, they’re not your own private fiefdom or your own private business, there a community, um, engagement where the reason, you know, you have a board of directors that, um, are the final legal responsibility for the organization. Um, so you really shouldn’t be operating it like your own private business.

[00:11:34.14] spk_0:
Let’s talk a little about the dashboard now nancy, the financial dashboard we introduced earlier. Um, it’s a one pager, which I think will be a relief to people is that they’re not getting a sheath of financial, uh, forms and, and, and balance sheets. But what, what, what do you think, what are key parts that should be in this financial dashboard? That to sort of streamline the overview for for board members?

[00:13:19.34] spk_1:
Um I would say that that there’s really three parts to it. There’s a financial part where you’re looking at, you know, sort of what’s our total budget? Um You know, every board member of every organization should be able to very quickly say whether the organization is a $300,000 a year organization or $5 million a year organization? That’s sort of a basic um sense of scale. Um Are we making money or not? Um Do we have net income? Um uh Do we have cash on hand? Those kinds of questions? Um Do we uh do we have a network or we, you know, if everything had to be liquidated today? Um would there be any any money left over or any value left over? Um, that that was tangible value, not just, uh, goodwill. Um, we also want to be looking at at how efficient the organization is and efficiency changes depending on what the organization does. It’s, it’s really a sense of being able to measure you against yourself or against industry standards. Um, and it’s, you know, the, the level of what it costs to deliver, um, services, for example, to severely challenged populations versus what it takes to deliver services to, um, highly educated people in, uh, an urban area where they’re all easily able to get to something. Um, the cost levels are gonna be different. And, and we’re not saying that they should be the same, but to know, um, what it costs for you to serve your clients, um, what it costs to have volunteers, um, and then the impact. And I don’t know, Andy if you want to talk a little bit about that, uh,

[00:14:00.04] spk_2:
how you measure whether you’re meeting your mission or not. And there are often new miracle measures that you can think about. You know, if you’re a land trust, how many acres are you preserving if you do mentoring with Children? How many adult Children matches do you have? I sometimes this is long term tracking, which is hard for a grassroots organizations to do. But in most fields there are ways of measuring your impact in terms of the number of clients you’re serving or the number of audience members who are involved. And hopefully there’s some measures that you can come up with that act. The quality of your work as well. Okay, So people here is, we could get this all on one page. You would have data from two years ago. You’d have data from last year, you’d have data from the current year. You could lay them out and see what the trends are. All

[00:14:22.34] spk_0:
right. That’s the financial dashboard. I love how you guys have this little dance worked out where nancy talks about the financial and efficiency parts, but then she throws it over to a co author, uh Andy for impact and you have it all worked out sort of sort of taking the show over. But it’s ok. It’s in a good way. Um which which leads me to question. All right. So I have to ask when two of when you co author a book, how do you decide whose name comes first? Did you just do alphabetical order or did you flip a coin or uh See I’m too narcissistic to co author with anybody, but but how did you guys work that out? How did you decide

[00:14:47.34] spk_1:
that? Andy Andy’s alphabetically. First on first names and last names. And um, the honest truth is is he did a lot of the writing work, um, where as I did help him with content. So it was very easy for me to go first.

[00:14:58.48] spk_0:
All right. So if I had come in, you wouldn’t have looked only at martignetti you would have also looked at Tony and then I’d have fallen maybe to the bottom, uh, which is probably where I would have had much to contribute to this. So you’re wise not to take me even though I pitched you

[00:15:13.78] spk_2:
otherwise, your name is well known in the community. We might have put your,

[00:15:18.15] spk_0:
uh, your publisher would never have approved that. Um, one of the questions

[00:15:23.80] spk_3:
that we asked before the

[00:15:46.94] spk_0:
show that relates to what we’re talking about now is, um, do you believe all your board members have at least a general understanding of your financial position and 70% said yes, 30% said no. So that’s pretty good, 70%. But the 30% they’re not really very confident a general and that was just a general understanding. Um, Okay. So the, uh, that’s the dashboard. Um, Andy should these things be devoted only to the, the authority of a, of a finance committee?

[00:16:19.64] spk_2:
No, I mean, I think a really good use of the finance committee is the oil stuff down. The rest of the board can understand it provides support to the rest of the board, serve as mentors and back up for the people on staff who were doing this. This book is not about how staff members need to do financial management more effectively. But the reality is a lot of people who are executive directors or even finance directors need help and one of the goals of Finance Committee is to give them that help when they need it. So a way to think about this is so excuse me, if the board is operating at a high altitude and the staff is down on the ground, flashing through the weed, the finance committee is sort of in the middle there providing a bridge between those two groups of people and

[00:16:51.53] spk_0:
so that means that financial dashboard is for the whole board to review. Right?

[00:16:55.99] spk_2:
Yes. How absolutely

[00:17:10.44] spk_0:
was that? A heck yes. Is that you can say hell yes. Okay, Yes. Okay. We have another question on from twitter, um, reminding listeners, you can join the conversation on twitter using hashtag non profit radio board members need to look at the impact of the organization and I guess this is for you, since you talked about impact. How do you measure if you’re meeting your mission or not? I guess she’s looking for a little more detail.

[00:17:22.20] spk_2:
Okay. Well

[00:17:24.42] spk_0:
obviously depends what your mission

[00:18:14.04] spk_2:
is. There are some standard benchmarks for how you’re doing. If you work with substance abuse, there are networks that do that, that can talk about ways of tracking your impact. For example, how many people come through a program get clean and stay clean if you are a food bank and you’re delivering food to the community. There’s a number of metrics there that come out of America. America’s harvest. I forget the name of the national network, but they’ll tell you how much money you should be spending more or less based on the population that you’re serving and how much he pounds of food you can put out into the community. Pretty much every nonprofit upset has some metrics that are relevant. And the trick is to learn the ones that are relevant type of organizations who, and then try and adapt them to your particular needs.

[00:18:18.52] spk_0:
And that would be important for the executive director to be recognizing certainly. And then right. And then conveying that to the board.

[00:18:25.04] spk_2:
Yes. And in some cases, depending on the size of the organization, there is some board work to help find those numbers. I mean, I work a lot with really small organizations who has, his staff are overwhelmed and would be great to say to a finance committee on a volunteer basis. I’m trying to figure out what the relevant metrics are for part type of organization who would be willing to do some research and bring that back to us aboard. But in a larger organization. Yeah, that’s going to fall the staff.

[00:19:01.64] spk_0:
One of the other questions we asked pre show, does your board have a committee devoted to financial issues? About 80% said yes and the remainder roughly 20% said No. Um, Nancy, does there, does there have to be a finance committee?

[00:19:48.74] spk_1:
Um, there does not have to be a finance committee. I think it really depends on the size of the organization. Um, the level of support that the director might need. You know, how complex the organization is and uh, also how savvy uh, the board is. If most of the board understands financials and feels quite comfortable with it in a small organization, um, you could get away without a finance committee. I’d say you want one in any organization that’s about to undertake any kind of major financial growth or change or, um, uh, new initiative um, in a larger organization. Um, it just is a great way to assist, um, either the finance manager or the executive director and developing budgets and exercising oversight because things don’t happen is exactly as people plan them to

[00:20:17.64] spk_0:
with me today are Andy Robinson and Nancy Wasserman co authors of the board members easier than you think guide to nonprofit finances. Um, let’s, let’s talk some about diversifying income sources uh, nancy, you make a point of having that in a couple of chapters of the book. Um why is that important first?

[00:20:30.64] spk_1:
You never want to be totally reliant on just one funder. Um You don’t want to be in a situation where um, if that one funder suddenly says, we don’t like what you’re doing, um that you’re suddenly scrambling and having to find uh, other ways to support your activities and your programs and what you do for the, for folks in the community.

[00:21:01.74] spk_0:
I think we’ve seen a lot of that in, in our recession, uh, agencies that rely exclusively or too heavily on, say, government fees for services or maybe even government agency grants or, and, or foundation grants, uh, those of all sources that have been cut

[00:21:44.34] spk_1:
back. Indeed, that’s true. And that’s part of what, um, it’s both diversifying types of financial support, but also, um, the number of supporters within each type, so you’re not totally reliant on just one foundation or one charitable donor, um, and, uh, and that you have that diversity of donors and foundations and government and, uh, your own revenues, If there’s a way for you to do that.

[00:22:06.74] spk_0:
We have a comment again from twitter. Um, just gonna point out to, uh, the person who wrote that, john that we did talk earlier about individual personal liability for non profits. You may have missed that part of the show, but you can always catch it on the archive on ITunes and our itunes pages. non profit radio dot net. Um Then

[00:22:08.54] spk_3:
what are

[00:22:09.81] spk_0:
Andy some of the sources of income that a nonprofit might look to that they’re not currently exploiting.

[00:23:09.44] spk_2:
There’s three big buckets here. tony The first book, It is private giving. Private giving is foundations, corporations, individuals and of course people leave behind when they pass away the big category there as individuals and within private giving about 80% of the money. Year after year comes from people and most of the groups that I work with don’t invest enough time and energy raising money from individual donors. So that’s the first category. Second category is public funding, that’s government funding from earl state, local, regional, municipal, all the government levels. And as you already indicated, this is a shrinking resource right now. And the groups that I think are getting hammered the worst during the recession or the that are relying on government. The third bucket is earned income, which is non profits arching for the services they provide are in some cases selling goods community and of the three, that’s the biggest of all this is sort of the surprise for people is that earned income is about the same amount as private and public funding put together when you look at all the nonprofit across the country.

[00:23:24.14] spk_0:
That’s interesting. Yeah. You don’t generally see that in in fundraising reports like giving us a earned income is not part of their

[00:23:29.40] spk_2:
private philanthropy. They’re very clear the numbers a little skewed because if you’re a private college and you’re charging tuition that shows up as earned income if you’re a private hospital and you’re charging a nonprofit hospital, you’re charging for medical services that shows up as earned income. So those numbers really sort of skew the data. But I work with a number of organizations where I’m always pushing them to say, is there something you do that you can package up and sell you have some skill that people would buy from you?

[00:23:59.24] spk_0:
It’s time for a break.

[00:24:57.64] spk_3:
Turn to communications, where would you like to be heard? News outlets, conferences, podcasts, blogs, that’s all earned media and turn to, can help you get it. They’ve got the relationships. What about your media that’s owned media turn to, can help you improve that as well because your story is their mission turn hyphen two dot c o. It’s time for Tony Take two planned giving accelerator is the online membership community that I have created to teach you how to launch your planned giving program. I’ll teach you step by step through trainings, live trainings, resources, podcasts, Ask me anything sessions. All of those are each month and we will get your plan giving

[00:25:00.08] spk_0:
program launched

[00:26:01.64] spk_3:
members of the first class, the one that started in january. Some of them already had gifts by three months in by March, so that three months into a 12-month class gift commitments already coming. So that can happen for you to you can be getting gift commitments in the first three months. The next class starts July one. I have priced this very reasonably, Especially when you consider, well, first of all, it’s just reasonable. But then when you consider that the average charitable bequest is $35,000. Take a look, it’s all at planned giving accelerator dot com And that is Tony’s take two. Yeah, we have boo koo but loads more time for B. F. D. Board financials dilemma. Mhm. Mhm.

[00:26:05.74] spk_0:
Andy Robinson and Nancy Wasserman with me. We’re talking about BFG board financial dilemma. Andy earned income. What can a charity possibly do? What you should be looking at to try to make some money off their activities their work?

[00:26:24.94] spk_2:
Well, the question I always ask groups that are wondering about this is what do you have, what do you do or what do you know somebody else ought to have or do or no most non profit during the service business. We deliver services. Sometimes we have expertise in that area and you know I mean there’s a structured brainstorm that people can do around this. A lot of what we do in the nonprofit world is pivot away and the really entrepreneurial organizations look at what they’re giving away and they say paying market for this and you know we can we can spend the rest of the show talking about this. I don’t know if you want to, but there’s a lot of opportunities there and I see many, many organizations could be more self sufficient financially if they got at figuring out what they know and how to package it up.

[00:27:18.01] spk_0:
Is there an example you can share with us a charity that didn’t realize what they had and and then ended up being able to exploit it and make some money from it?

[00:28:14.04] spk_2:
Well, I’m an author of a book on this subject called selling social change and what’s my favorite example of this? Um, you know, I’m for a group for years in Tucson Arizona called Native Search. Their seed banks on native american crops and you know what they do is protect beats from going extinct by planting them and growing them and distributing them and probably 30% of their of their income. It’s details, their seed bank and they sell it. What they recently started doing, which was fascinating is they opened something they called the school and these are people who want to learn about how to protect seeds, grow them, pass them on to the next generation’s really about biological and genetic. Pay money and they come to Arizona for a week and they get trained and everything you need to know to run your own seed bank. And it’s an organization that was sitting on this for probably 30 years, only recently realized that people would pay for that knowledge in a classroom setting. They

[00:28:29.49] spk_0:
have been doing that all for

[00:28:30.41] spk_2:
free. They hadn’t been training other people, they’ve been taking care of the seeds, but they hadn’t been teaching. I see, okay. And they realized there are a whole renaissance of local agriculture in our country right now and they thought we could tap into this. There’s a market here for people who want to learn how to do this. And so they started doing this and they’re doing this four or five times a year and it sells out and they’re starting to move it around to other parts of the country. So that’s one example.

[00:28:54.90] spk_0:
That’s an example of knowledge. They had a knowledge and a skill that was very marketable.

[00:29:12.54] spk_2:
That’s right. And until you have what you need for better worse is you need someone in the organization who has an entrepreneurial jean who can look around and say, you know what, somebody’s going to want to buy this. And not every nonprofit is blessed with people who think that way. And I think part of what nancy and I are trying to do in our professionalized is to get more of that thinking out into the nonprofit community way

[00:30:07.24] spk_0:
and the related to uh diversifying income. I I had a comment from linked in this, uh, woman had just had a board meeting this earlier this week regarding the need for transparency and distribution of responsibility. When it comes to the finances, bookkeeping and reporting function of their historic nonprofit theater, they’ve been doing their thing. Uh, they’ve been doing things their way a long time. And one big problem is that they have a banker on the board and he doesn’t see the problems. Um, uh, so it sounds like, and and then she says, I was able to get the check writing privileges moved to another person. This is sort of segue into a conflict of interest conversation, but sounds like maybe he was the only one writing checks. Um, I secured a nice grant from a foundation and they want a financial audit. I’m moving for a review. However fear we won’t get any more money once it’s known how ignorant the board is about accountability uh nancy. Uh And he’s laughing nancy. Let’s bring you back. What would you what would you say there?

[00:31:44.94] spk_1:
Well you know how are we defining accountability here? Is there a lack of what a financial audit might uncover? Um Is impropriety? But it sounds like that’s not the case. Um More likely it’s going to um It’s not the financial audit per se but the form 9 90 that you file with the I. R. S. Which ask you now to tell us, does does the boards look at financials um How does is the board of informed, has the board seen an audit? Um uh Did they review it and approve? Um It’s really um you know there there’s sort of two sets of questions. The very pragmatic, did did you get an audit? Did you review it? Did you look at it? Um And then the more important question in my mind, which I think is the question we’re trying to answer with the whole book, which is, does the board really understand what all these numbers are telling them? And ideally with with a financial audit and accountant has come in and um, spoken directly with the board of directors and walked through each and every page of it and talked about why the financials are the way they are and what they mean. Um And I think both Andy and I have seen numbers of organizations where um there’s a lot of people sitting around the table and they leave it to the banker, um or the investment professional to, you know, they they know about numbers and they handle it and it’s really something that everybody needs to know how to do. Um, if only to make sure that the mission of the organization is uh, fully addressed by the board and the organization.

[00:32:28.44] spk_0:
This also relates to the conversation about diversifying income. I mean, here this woman, uh, I believe she’s a fundraiser, there, a volunteer fundraiser and uh, trying to diversify income source, getting a grant but fearful that the grant may not be renewed because there isn’t transparency and accountability that the, the the grant source will probably be seeking.

[00:32:45.74] spk_2:
And this is another point that was raised, sort of came out of sideways. Is this question about separation of duties, which is, you know, in a healthy organization, people break up that work. One person opens the envelope and somebody else writes the checks and somebody else approves them and somebody else gets the bank statement and balances the checkbook. And the idea here is that you’re trying to avoid mischief and fraud and if somebody says, oh I’ll take care of all of these things, maybe they have good intentions and they’re going to be perfectly honest about it. But you really need to break that into separate pieces so people can have oversight over each other.

[00:33:15.64] spk_0:
Let’s segue into the conflict of interest, um, Andy defined for us. What a conflict of interest is here. It’s so often,

[00:33:58.74] spk_2:
Well, my sense of it, at least in terms of the context we’re having here, is that if you serve on a nonprofit board, your job is to put the needs of the organization above your own personal needs. And where this plays out sometimes is people who try and receive a benefit from serving on a board. That the personal benefit that has nothing to do with advancing the mission of the organization. Where this gets tricky is that in a lot of voluntary organizations, there are inherent conflicts of interest. But if you goes to a private school and you’re on the board, your job is to advocate for policies that are going to benefit the Children in the school, and in some case that means they’re going to benefit your kid individually and sort of sorting those things out can be challenging. But the bottom line is the decisions you make have to put the needs of the organization in front of your own personal need

[00:34:19.83] spk_0:
nancy. How can we try to avoid conflicts of

[00:35:47.04] spk_1:
interest? One of the best ways is to have a written conflict of interest policy where you’ve already addressed some of the situations that are likely to happen before they happen, um, where you sit there and say, you know, define what it is that is seen as either a real conflict of interest or perceived conflict of interest, which might be a case where um, somebody was, for example, can somebody bid somebody who serves on the board of directors bid on a project while they’re still on the board of directors or not? Or do they have to resign before they even submit a bid? Or do they only resign if they’re awarded the bid, or do they have to resign? Or can they simply step out of the room for the discussion? Um Those are the kinds of questions that got kind of uh can get kind of challenging, um, particularly when any member of the board stands to benefit financially, um, from any decision of the board. Um That’s uh an outright in my mind and outright conflict of interest. Um, and, um, in most boards, you want to make sure that person doesn’t participate. And it’s, it’s always easier to have that discussion, um, when there isn’t a hot potato sitting in the room, that’s, um, somebody’s thinking that they have every right to be part of the discussion. Um, and you have to therefore bring up both the fact that somebody in the room is feeling uncomfortable that this person is present. Um, and, um, it gets a little bit more tense in those sorts of situations. Prevention is having a written policy that folks have already talked through and everybody feels responsible for making sure it’s enforced.

[00:36:11.93] spk_0:
So prevention ahead of time much better than dealing with it when it’s a, a crisis or a potential crisis.

[00:36:13.83] spk_1:
Right? And, you know, it also, um, is the transparency issue you want to make sure that your presentation to the community at large is um, is as an accountable organization, um, that that gives everybody um equal opportunity to benefit from um, the organization’s purchases.

[00:36:34.49] spk_0:
Is this the kind of policy that a board member should sign and review every year or something

[00:37:00.13] spk_1:
like that? It’s not a bad idea. Oh, you know, it depends on the nature of the organization. I you know, I’ve worked with a community loan fund and that’s absolutely required that you disclose um your conflicts of interest each and every year and that you review the conflict of interest policy every year. Um The other thing that’s incredibly important is disclosed, disclosed, disclosed.

[00:37:05.21] spk_0:
We have just a minute before a break and anything you want to add to conflict of interest discussion.

[00:37:11.17] spk_2:
I think the main thing is that if you see it, you have to name it after. If your board member and you smell something like this, you have to have the courage to bring it up. And as nancy said, it’s much easier to do this if there is an existing policy in place first,

[00:37:23.56] spk_0:
if somebody sees something like this Andy again, just a few seconds before a break, who should they bring it up to you? I’m a board member. Who do I talk to?

[00:37:39.83] spk_2:
Probably go to the chair first and say, I think there’s something fishy here, let’s talk about it and I would start there and then presumably the board, the chair will bring it to the full board. Mhm. Mhm

[00:37:50.53] spk_0:
Welcome back to big non profit ideas for the other 95% on Tony-Martignetti non profit radio nancy, let’s talk a little about financial statements. What

[00:37:53.91] spk_3:
what uh what are the basics

[00:37:55.71] spk_0:
first, what’s the

[00:38:11.62] spk_1:
overview? Um there’s really two major statements that everybody um has to deliver ones the balance sheet, which is a snapshot on any given day. Um Typically the end of the month or the end of the quarter the end of the year, um Which outlines um what the organization owns and what they owe and what they’re worth, which is the difference between everything they own. Um less everything they owe um As far as its paper value is what they would be worth on that day. Uh The other major statement is the statement of activities, also called the profit and loss or A. P. And L. Um Which is where do you get all your money, your income, your revenues from. Um And then what does it go to pay for all your expenses? And the bottom line there is your net income at the end of and of a certain time period. Uh The statement of activities is more like a movie. It covers a period of time. Uh Typically uh the beginning of the year to the end of the most previous sorry the most recent months. Um So if we were on a board uh today we probably wouldn’t see the the statement of activities through the end of february because somebody would have had to have it all cleaned up as of yesterday, but we could expect to see something through the end of january. Um And depending on what your fiscal year was um would determine the beginning period.

[00:39:45.42] spk_0:
We talked earlier about full disclosure. So I’m gonna make a disclosure. The only accounting course that I’ve ever taken I dropped out of because I was I was I was going to fail. So um so I’m perfect for this book. This it’s very informative and it is an easy read and it is helpful guide um nancy help me understand this was always seem like magic to me on a balance sheet. How is it that the assets equal to the liabilities? How does that always come out? So equal? I mean uh it’s intended that way obviously, how does that

[00:40:01.35] spk_1:
possible? It seems like um now you’re asking somebody who was not trained as a classically trained accountants,

[00:40:07.75] spk_0:
you can’t pull back. Now your name is on the book, your name is there, I’m looking right at it says nancy Wasserman,

[00:40:12.49] spk_1:
but it’s um it’s based on double entry bookkeeping which was developed by the chinese and it’s uh follows up from the abacus and um really was sort of uh uh amplified by the Italians in the renaissance essentially when you put an entry in double entry book, keeping everything that goes up, something has to go down and uh it all balances out in the end and the cash comes out. And if your balance sheet that’s like number one, if the balance sheet, if the total assets does not equal the total liabilities and equity, um it is an incorrectly prepared balance sheet and they call it a balance sheet.

[00:40:51.96] spk_0:
Right? Yes, exactly, I love that my italian forebears had something to do with confusing me now in the current day. Um Okay, what how can we help uh Board members nancy, who whose eyes kind of glaze over when they get to the balance sheet, Aside from looking to see whether the two uh the assets and liabilities equal, which they always

[00:42:08.60] spk_1:
do right. Step number one, the balance. Um Number two, um Do your total current assets, in other words, what what can be cash within a year’s time, um exceed your current liabilities? The things you have to pay off with cash in a year’s time. And so are you liquid or not? Do you have, do you have cash available to do things? Um This is the place where you’re looking for those payroll liabilities or payroll tax liabilities. If there’s a number there that’s frighteningly large, um you’ve got a big problem and if it’s payroll tax liabilities, um you as a board member may be personally liable. Um What are your long term liabilities look like? Is that that’s your debt basically. And you know, does it make sense to you? Is that number reflects the debt? You know the organization has um your net net assets. Now, you know the language of accounting is kind of like greek and um I sometimes think they made up all these names to make it even more confusing.

[00:42:17.36] spk_0:
It would be so much easier if it was, it was italian,

[00:42:19.74] spk_1:
it could be,

[00:42:21.37] spk_0:
it would be, it would, there’s lots of cognitive and it’s a romance language. I think it would be, I’m sorry.

[00:42:56.20] spk_1:
No problem. But that total net assets number, which simply means, you know what this organization more. Um, if it, if it had to liquidate today and um, if that’s a negative number, you should be concerned. Um, and, and there’s certainly many organizations where that is the case. Um, so those are the big things on the balance sheet. You know, does it, does, it sort of makes sense to you to the fixed assets and their value. Um, feel like what you have if you suddenly see something that shows that you have a fixed asset of, you know, equipment worth $100,000 and you’re scratching your head because you have no idea what you have for equipment. Um, Something’s wrong with the balance

[00:43:10.68] spk_0:
and you should and should ask that question. Absolutely. You mentioned earlier frighteningly large numbers, I mean, is part of what we should be doing, looking for anomalies.

[00:44:01.79] spk_1:
Um That’s really what you’re looking. You’re looking for things that, you know, that don’t make sense or don’t feel right or that you can’t um if you can’t, if it doesn’t feel right and you can’t really explain it, you want to ask questions. Um, and, and the numbers, you know, the thing about numbers is um, they’re pretty um, they’re very, you know, they’re either on or off and um, it’s harder to lie with numbers. Um, so you’re gonna know right away that you could have frighteningly large numbers with a, with a complex organization and that would be fine. Um, if if they’re they’re balanced out, if there’s cash in the bank, if it feels like there’s equity.

[00:44:37.09] spk_0:
Mm This is a critical subject. Another question that I asked on the, on the pre pre show survey is for those charities that do have a board committee devoted to financial issues. Are you confident that each committee member is fluent in your numbers and understand your financial position? Only 25% said yes. The remaining 75% were either no or not sure and no was pretty large. About 60%. We have to stop there. Andy Robinson and Nancy Wasserman are co authors of the board members easier than you think. Guide to nonprofit finances published by Emerson and Church Andy Nancy. Thank you very much for being guests.

[00:44:50.52] spk_1:
Thank you Tony.

[00:44:56.59] spk_0:
Thanks for having us. It’s been a real pleasure. And also thanks to your publisher, Kathleen Brennan at Emerson in church for her promotion assistance for the show.

[00:45:35.69] spk_3:
That was fun. A bit of nostalgia. I had to keep in a short burst of eye of the tiger had had to do that. Thank you for ramping back in time with me Next week. Our 2021 nonprofit technology conference coverage continues. Oh, conference coverage continues. I like that. If you missed any part of this week’s show, I beseech you find it at tony-martignetti dot com. We’re sponsored by Turn to communications pr and content for nonprofits. Your story is their mission turn hyphen two dot c o.

[00:45:49.59] spk_5:
Our creative producer is Clan Meyerhoff shows, social media is by Susan Chavez. Mark Silverman is our web guy and this music is by scott Stein. Mhm Right, thank you for that. Affirmation scotty be with me next week for nonprofit radio Big non profit ideas for the

[00:45:56.39] spk_3:
Other 95

[00:45:58.99] spk_5:
go out and be great.

Nonprofit Radio for August 19, 2011: Explaining Earned Income and Leading the Leaders: Motivate Your Board to Fundraise

Big Nonprofit Ideas for the Other 95%

You can subscribe on iTunes and listen anytime, anyplace on the device of your choice.

Tony’s Guests:

Gene Takagi and Emily Chan
Gene Takagi & Emily Chan: Explaining Earned Income

Our legal contributors, Gene Takagi and Emily Chan of the Nonprofit & Exempt Organizations Law Group, break down what earned income is. Why it can be good. Why it can be bad. Why you need to understand it to keep your office out of trouble.



Kerry Kruckel Gibbs
Andy Robinson
Andy Robinson & Kerry Kruckel: Leading the Leaders: Motivate Your Board to Fundraise

From the Fund Raising Day conference in New York City, consultant Andy Robinson and Kerry Kruckel, Vice President for Development and Communications at WNET TV, reveal how to move your board to be the best fundraisers they can be.


Here is the podcast: 055: Explaining Earned Income & Leading the Leaders: Motivate Your Board to Fundraise

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Welcome to tony martignetti non-profit radio. We’re always talking about big non-profit ideas for the other ninety five percent. I’m your aptly named host. I hope you were with me last week for got women donors from the fund-raising day conference in new york city last june, we talked about successful initiatives to expand your female donor base through targeted and appropriate cultivation, solicitation and stewardship. My guests were michelle walsh from the us fund for unicef and travis fraser from united way of new york city. Then it was linked in for prospect research. Our new regular contributor, maria simple, the prospect finder, was with me to share strategies for using linked in to find people and organizations who could be your board members, volunteers and donors. This week we are explaining earned income. Our legal contributors jean takagi and emily chan breakdown. What earned income is why it can be good. Why it can be bad. Why you need to understand it to protect your non-profit and keep it out of trouble. Then it will be leading the leader’s. Motivate your board to fundraise pre recorded at that fund-raising day conference in june consultant andy robinson and carry kruckel, vice president for development and communications at w any tv public tv in new york city reveal how to move your board to be the best fundraisers they khun b on tony’s, take two from my blog’s, say what’s on your mind. I learned a lesson about better communication from somebody who sat next to me on an airplane this past weekend, and that is tony’s. Take two at roughly thirty two minutes after the hour we’re live, tweeting today, use the hashtag non-profit radio to join the conversation on twitter. We take a break, and when we return, i’ll be joined by jean takagi and emily chan to explain earned income. Stay with me. Dafs you’re listening to the talking alternative network. 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 way. Look forward to serving you. Is your marriage in trouble? Are you considering divorce? Hello, i’m lawrence bloom, a family law attorney in new york and new jersey. No one is happier than the day their divorce is final. My firm can help you. We take the nasty out of the divorce process and make people happy. Police call a set to one, two, nine six four three five zero two for a free consultation. That’s lawrence h bloom two, one two, nine, six, four, three five zero two. We make people happy. Bilich hey, are you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com lively conversation top trends, sound advice, that’s, tony martignetti non-profit radio and i’m samantha cohen from the american civil liberties union. Welcome back to the show and thank you, samantha cohen. Jean takagi is principal of ennio neo non-profit exempt organizations law group in san francisco. He edits the popular non-profit law blawg, which you’ll find at non-profit law blogged dot com. Emily chan is an attorney at neo-sage principal contributor to the non-profit law blawg. They’re both joining me to talk about earned income. Jean emily, welcome to the show. Thank you, tony. Pleasure to have you back. Jean earned income. It can be good. It can be bad. What are we talking about? Well, when we’re talking about her dinkum, we’re talking about income that said, made by non-profits that’s not true. Donations through grants through charging fees, usually for services. Good. Jean, let me let me interrupt you for a moment. Could you talk a little louder? Jane is better. Yeah, that is better if you can keep up that. Thanks. Great. So earned income is about making income from services or goods or other assets that the non-profit may have to sell. And it’s not just asking for donations or grant on it’s. A way to diversify a non-profits revenue sources. Which is a good thing. Especially in times when other revenue sources from donations and grants maybe somewhat precarious because of the economy ah, and it helped to create a self sustaining program of the non-profit another really good thing in a way for non-profits toe leverage, goodwill and other ass. Yep. Okay, so this is income aside from your fund-raising a cz you said sale of goods or services there, there there there’s a lot of earned income out there, isn’t there? Jane? Absolutely. I believe emily sighted in in a recent block post that about seventy percent of the income reported by non-profits is actually derived from earned income sources and not fund-raising okay, so the majority of the of the income all right, and emily this khun b, that could be a downsides and non-profits too, right? Yes, there are to mean reasons why non-profits should be aware of this concept of unrelated business income because first thurs attacks that the irs imposes on income coming from unrelated business activities and second for public charities there’s a requirement that the organization be operated primarily for exempt purposes. So if there is too much unrelated business activity happening, that can actually jeopardize the status. Of the organization. Okay. Jargon jail have to getyou for unrelated business income. Unrelated to what? Let’s, break this down. Yes, on that really? The key concept here. So within earned income there could be activities that are considered related to the exam purposes for which the organization was formed. And then there can also be activities that are considered unrelated to be exact purpose of the organization. Three irs defines this three part of a trader business that’s regularly carried on that’s not substantially related to furthering the except purpose. So really, it gives the definition for unrelated business and that’s kind of how we see which activities are considered related or whether they’re considered unrelated. Okay, so i think the key phrase there is substantially related. Gene what? How does the organization decide whether it’s earned income is or is not substantially related to its a charitable mission? It’s definitely a fact specific inquiry, tony. The general idea is that related business advances the organization’s charitable mission without considering where the profits go. It’s the activities himself that contribute, importantly toe advancing the mission. So even if there was no money generated from that activity, the charity would think that running that business is a good idea because it helps again further, the mission furthers, uh, the interests of the charitable class of individuals trying trying to help no unrelated business is one where the activities really have nothing to do with advancing the mission, but they’re carried out to generate revenues that will be used later to advance the mission and it’s that’s unrelated business that could be subject to the unrelated business income tax and that can get a charity in trouble if it’s engaged in a substantial amount of of that type of unrelated business activity. Okay? And you you draw and a n’importe distinction. I think, between the activity that creates this earned income and the place to where that money goes once it comes into the organization, we’re interested in the former, right? Exactly. So for this analysis, we don’t get her where the money goes. We’re just looking at the activities himself, okay? Yeah, go ahead. Sometimes very difficult to tell. Tony, for example, does selling clothes or other retail items really further a charitable mission. And, you know, on one side, you might say, well, it looks like a department store. It looks like a boutique, but it can for their mission if, like, goodwill, the operation of the business provides education, job training and work experience for disadvantaged class of individuals so it can be very fact specific, and we’d look at all the facts and circumstances to determine whether it’s related or not. Okay, and we have just a minute before the break. So so the activity that we’re interested in is the activity that generates the revenue the income let’s call keep put consistent generates income, and you’re comparing that to the tax exempt purpose, which would be the charitable mission. And that’s, how you’re determining whether the income is related or unrelated? Why am i explaining this? Right? That’s? Exactly. Right. Okay, cool. All right, so we’ll take a break, and when we come back, emily and jean will stay with us. We’ll talk a little bit more about how to determine where, where this related or versus unrelated income fits. And what happens if it turns out to be unrelated. Which sounds ominous. This is tony martignetti non-profit radio stay with us. E-giving attempting to getting thinking. You’re listening to the talking alternate network. Get him. Good. Duitz 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. Looking to meet mr or mrs right, but still haven’t found the one. Want to make your current relationship as the building as possible? Then please tune in on mondays at ten a. M for love in the morning with marnie gal ilsen as a professional matchmaker, i’ve seen it all tune in as we discuss dating, relationships and more. Start your week off, right with love in the morning with marnie gal ilsen on talking alternative dot com. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics politically expressed. I am montgomery taylor, and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com talking alternative radio twenty four hours a day. Schnoll welcome back, we’re with jean takagi and emily chan explaining earned income. So, emily, maybe we could talk about a couple of other, maybe just fact situations where i guess the irs has determined or, you know, or some court has determined that that something was definitely related or unrelated income. Can you give another example, besides the one that gene had with the goodwill? Sure, another common example is with museums that generally have this charitable and educational purpose, but they also generate income through activities like a gift shop or having a cafe. So now we’re looking at the specific activities, and the irs doesn’t a kind of a broad stroke with activities it’s going to look at each activity and even within that activity kind of separate parts. So starting first with the gift shop, i’m emily, before you go further, can you can you speak a little louder? Force? Thank you better. Yeah, it is better, thank you within a museum, gift shop, museum, maybe selling items that i’m advanced charitable and educational purposes, for example, their reputations of the art that’s displayed on other items like that, but they also may be selling things like seven years to the city for which is located, which really is not going to be considered substantially related to charitable and educational purpose at the museum. In that case, the irs look att each item, maybe even and determine whether that’s related or unrelated, and so it can get quite nuanced if we done looked to the cafe. Now we’re talking about some of the activities where the irs also make exceptions. So some cafes in a museum may be considered related if they fall under the exception of being there for the convenience of the members and the patrons who come into the museum. But then, if we’re looking at a cafe that open to the public that list, they have the street entrance. Now it’s starting to look like a commercial cafe for-profit cafe, in which case we are arrest may come in and say, this is unrelated income, and now the museum has to be concerned about the two issues we raised earlier of pre-tax or possibly okay, that’s really interesting. So so within this category of earned income, some of it can be related and some of it unrelated, and then the non-profit has to. Account for those separately, like within the same cafe or the same museum store? Yes, on so this is. And another misconception that comes up is not an activity itself, such as running a cafe can actually generate both unrelated and relieving income. I’m so again, and she noted it’s just very fact specific and the na me but they’re not the museum when it reports it’s income in its annual information returned to the irs got toe actually list out every item that generates related versus unrelated business income so it would have to say, well, we we sold some t shirts and mugs of the city city souvenirs. This generated this much income that would be subject attacks. We thought this many art prints and books on art which would be related and not subject to that attack. Yes. Ok, so they do have to account separately for all these different categories of related versus unrelated. Wow. Okay, so is that so it’s fragmented? I mean, they’re the income is fragmented and that’s exactly what the irs calls that they call it the fragmentation rule. Okay. And let’s talk a little more. Jean about the consequence of of unrelated, it earned income. It’s, you and emily both mentioned the unrelated business income tax is that what gets applied to unrelated income? Exactly, and the whole idea be behind the unrelated business income tax was to address the problem of unfair competition with for-profit businesses on dh back in the fifties, when when the law was first created, there were a bunch of large non-profits like universities buying for-profit businesses and not paying taxes when running them within the non-profits can imagine that a small business it could be very upset if this big non-profit competitors came in, didn’t have to pay tax and had this huge competitive advantage over the small business owners, plus the additional advantage of not paying property tax, et cetera, the other the other advantages, aside from not paying tax on the income right, exactly, exactly right. And so you could see how they would be this unfair competition if non-profits weren’t tacked on this unrelated business income, and there is a one thousand dollar general thresholds first, one thousand dollars sort of escape, but beyond that, then it’s considered substantial enoughto require that the non-profit file a special information return or tax return. Reporting it’s, unrelated business income tax and the income tax is a tax on the normal corporate tax rate that a corporation would have to file a for-profit business would have to file, which is generally somewhere between fifteen and thirty five percent rate. Okay, and there’s an additional return to report this beyond the nine, ninety it’s not just a schedule in the nine, ninety that you that you ah, that you file correct it’s a separate return called the form nine, ninety and just like the nine, ninety, it has to be publicly disclosed. Okay, tea for taxable. Maybe. I don’t know. Okay? Or tea for tony, i think it’s the nine. Ninety tony for i prefer that. Okay, so who should be making this call mean, does this this is definitely require an attorney? If you have this earned income that you know, outside you’re fund-raising income, you’re getting money for goods and or services? Does this have to be an attorney making the call as to whether it’s related or unrelated her candid account into it? Or or who? Offgrid i think it’s a mixture of individuals that really can help make this decision. I’m in one respect there really is a business decision that has to be made by the organization and its leaders, even if the organization is generating related income. I mean there’s questions about whether there’s capacity the resource to support it and weather engaging in these activities might even lead to something like mission creep, where the organization starts to move further and further away from the reason it was organized. I’m certainly having the help of experts can be incredibly useful for an organization as kind of our discussion is highlighting there’s so many nuances to this rule, and unfortunately, the irs doesn’t give kind of a straightforward, bright line threshold to say where you’ve crossed that line and now have based on certain consequences, such as getting your tax exempt status provoked. So i certainly think there are many people who could be useful durney i’m with jean takagi principle of the non-profit and exempt organizations law group in san francisco. Emily chan is an attorney in that firm. So emily, you just mentioned possible revocation of your tax exempt status. What? We haven’t gone that far yet. What? What is that about? So public charities when they first formed one of the requirements under the internal revenue code is not this organisation be primarily operated for the exempt purpose? The issue with unrelated business income is now is there’s too much unrelated business activity? The irs is now saying you’re no longer being primarily operated for related purposes. Unfortunately, though the iris has not said definitively at what point can you say now? We were engaged in substantial on really business activity many people ask for, like percentages or income amounts, but unfortunately, the irs hasn’t spoken on that. Many practitioners fall on the twenty percent rule of thumb of, um, the amount of generated income coming in, but sometimes being office may reap are looking at the amount of resource is the organization is actually dedicating unrelated business activity as opposed to how much income is generating let’s stop for one moment. So on emily, i have to remind you speak a little bit louder, please. So twenty percent you’re saying some practitioners use a twenty percent. What are we taking? Twenty percent of if that’s your if that’s the test, you’re using twenty percent of gross income from unrelated businesses, okay? And and some practitioners think that is a threshold for for what, when you have to report it or or what it’s a good rule of thumb common amount that many practitioners fallen for when the organisation should be concerned now that they may be e-giving into too much unrelated business activity in which consequences could be oh, i see. Ok, so there isn’t a bright line. There isn’t a bright line as to how much is too much. Some practitioners use twenty percent. I don’t there’s some practitioners who think as long as it’s not above forty nine percent that you’re okay, yes, but certainly arrange again because the irs hasn’t said exactly at what point they believe that the line is drawn and partially because the analysis is still back specific, it may just be difficult for the irs to say definitively across the board this is the one amount where every organization must follow-up right, i can jump in turn, please, you know the irs is really looking at all. The resource is being used by the non-profit that’s directed at the unrelated business. So if it’s, using ninety percent of its resource, is not to engage in charitable activities, but to engage in the unrelated business and the unrelated business is only generating ten percent of the total gross income. Well, that’s still probably too much unrelated business activity devoting ninety percent. You know of your resources towards it on dh. That could lead to revocation of exempt status even below that twenty percent rule of thumb. Because we’re really not just looking at the income, really looking out at how the organization is using its research. So on the sort of congress sight, if it was using only five percent of its resources and it was generating eighty percent of the growth income of the non-profit that may be okay really generated so much income is just so little resources are going towards that, and then the other ninety five percent are all going towards furthering its charitable purposes directly. So it’s it’s really more than just the percentages, but anything over twenty percent, i think emily cause that is a good rule of particularly for account that he may not be looking at the activity level, but looking at the numbers and saying, hey, you better talk to an attorney when you get to that level of income from unrelated business. Okay, interesting. So i just want to recap a little where we’re talking about earned income, which is different than your fund-raising income, but so it’s a part of your gross revenue apart from fund-raising income discerned income and then earned income could be either related or unrelated. And we’re talking about now the consequences of having too much of the income unrelated. And jean, you had said the threshold for reporting is a thousand dollars. Is that right? That’s? Right. Ok, so if you have over a thousand dollars of unrelated income that’s, when you have to file the nine ninety tony form nine ninety tony form that that’s, right? And i should add, actually sort of define what growth income means without trying to get into jargon jail here. Okay. Income for this purpose is means the gross receipts, less the cost of good souls. So, for example, if we had t shirts and we sold two thousand dollars worth of t shirts and the t shirts costs us twelve hundred dollars, how then are gross? Income is only eight hundred dollars, so we wouldn’t have to file the nine. Nineteen. Okay. Okay. Ah, are there? Are there exceptions to the so what’s could be unrelated business income, gene? Yeah, they’re they’re exceptions to the whole area, unrelated business income tax and whether it would apply and the common exceptions that that we talk about are the three basic ones. When is the volunteer exception? So if the unrelated business is carried on by all volunteers, that will be an exception, and those activities will not generate income that’s subject to that unrelated business income tax. The other one emily mentioned is when activities unrelated business activities are carried on for the convenience of members or patients or students, and that might be like a hospital, gift store or bookstore in in a and the university or the example that emily brought up a cafe inside a museum that serving just the museum patrons. That’s called the convenience exception and is another exception where you don’t get charged with that unrelated business income tax. And the third exception that’s often cited is the donated good exceptions and that’s when you run an unrelated business like a thrift store. But all of the goods inside the thrift store were donated so similar to again the goodwill model. In some cases and and other thrift stores that are run by non-profits it’s a business and it’s unrelated but it’s all donated goods so they don’t have to pay the unrelated business income tax there’s one more modification we call separate from these three basic exceptions that everybody should know about and that’s the passive income modifications. So if you’re generating a lot of income from interest and dividends and red ilsen royalties but it’s passive, you’re not doing any activities, teo, get that that income it was just based on investments that will not be subject to the unrelated business income kapin but it gets so complicated that they’re exceptions on exceptions and exceptions, those exceptions? Yeah, no kidding, especially. I’m sure about the passive income when you start getting two rents and especially ranson and there’s prints on commercial property. Okay, let’s, not go that far. But i am interested in the volunteers that first exception volunteers doing all the work. So? So if you had any employees like in a thrift shop supervising volunteers, then then you wouldn’t qualify for that exception. Is that right, jean? It would be we would look at it from a substantiality points. So it’s substantially, all of the workers were volunteers. Then we’ll get that exception. You may still have a back person sort of supervising all the volunteers, and that could still work out. Ok, ok. And emily, the donated goods that does that exception have to be one hundred percent? Or is that also? Ah, substantiality test there for that exception, we’re looking again at it reality. So with many thrift shops, we see this happening. But certainly, if there’s a combination of exceptions to the unrelated business income roll and then there’s one or i think school that are considered unrelated. Then again, the fragmentation role, as we talked about earlier is going to be triggered on the organization is going to need thio mark each category. Make sure it accounts for that. Okay? Fragmentation, substantiality unrelated business income in the nine ninety tony form jean is there anything we want to wrap up with? We have just a minute left. Anything we haven’t said about earned income that you think small and midsize non-profits should know well, apart from the whole related and unrelated part, that big driving force behind designing to engage and earned income ventures is deciding whether you really got the capacity to do it, and it makes sense it’s compatible with your mission. You’ve got the right assets that are worth selling probably want to pick the low hanging fruit first do stuff that you’re already good at because you don’t want to surprise your staff with managing a totally unknown entity and unknown venture on distracting them from from doing the mission and want to get involved too. As he plan about that, you need to know the laws and risks involved. Whether you’re selling goods, maybe sales tax are involved, you may have new employment issues and intellectual property issues, social media issues, licenses, permits, insurance and all of those things. So getting some experts to help you making sure you have the capacity to do it ahead of time. Those those are my best tips for you jean takagi and emily chan gene is a principle of neo the non-profit exempt organizations law group in san francisco. He edits the non-profit non-profit law blogged at non-profit law blogged dot com emily chan is an attorney at neo-sage principal contributor to that blogged emily gene, thank you very much for being on, we look forward to hearing talking to you again next month. We look forward to it as well, tony. Thank you, real pleasure. Thank you. We take a break, and after the break, tony’s take two and then leading the leader’s motivate your board to fundraise, so stay with me. Dafs you’re listening to the talking alternative network. Are you feeling overwhelmed in the current chaos of our changing times? A deeper understanding of authentic astrology can uncover solutions in every area of life. After all, metaphysics is just quantum physics politically expressed. I am montgomery taylor, and i offer lectures, seminars and private consultations. For more information, contact me at monte m o nt y at r l j media. Dot com are you concerned about the future of your business for career? Would you like it all to just be better? Well, the way to do that is to better communication, and the best way to do that is training from the team at improving communications. This is larry sharp, host of the ivory tower radio program and director at improving communications. Does your office needs better leadership, customer service sales, or maybe better writing, are speaking skills. Could they be better at dealing with confrontation conflicts, touchy subjects all are covered here at improving communications. If you’re in the new york city area, stop by one of our public classes, or get your human resource is in touch with us. Website is improving communications, dot com, that’s, improving communications, dot com, improve your professional environment, be more effective, be happier, and make more money improving communications, that’s the answer. Hey, all you crazy listeners looking to boost your business? Why not advertise on talking alternative with very reasonable rates? Interested simply email at info at talking alternative dot com. I’m leslie goldman with the us fund for unicef, and i’m casey rodder with us fun for unison. You’re listening to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent. My block this week is, say, what’s on your mind and that’s the topic of tony’s take two on an airplane just this past weekend from chicago to new york. I was with a girl who was just very forward about saying things that that a lot of us would filter. So there was there was she’s, twenty four years old, elisa, and it was clearly, you know, some disorder that just made her say what was on her mind just as i entered the just entering the row to sit down, she asked me what’s your name, how old are you? Are you married? So, you know, that’s got me thinking, you know, she was very charming and sweet and at the same time, you know, unashamed, um and it just got me thinking, you know, they’re there we censor ourselves a lot, and we suppress things that maybe sometimes appropriately suppressed i mean, we can’t all be saying all the things we’re thinking with we’d all be without jobs without friends, but some things i think way sensor maybe should be said and and ah, not avoided just because they might be very sweet or, you know, unmanly. If you’re a guy or maybe because they might be, um, you know, a sign of weakness, so i just raised my consciousness about censoring myself and saying more things that i’m thinking and letting people be more aware of what my thoughts are in the right circumstances. And so i thought that might be a benefit to you because so much of our work is relationships in our inn. Non-profits so that’s say what’s on your mind, it’s on my block, which is that m p g a d v dot com and that is tony’s take two for friday, august nineteenth. We’re now going to move to leading the leader’s motivate your board to fundraise. This was pre recorded at fund-raising day in new york city this past june, and here is that interview. Welcome to tony martignetti non-profit radio coverage of fund-raising day two thousand eleven were in new york city times square at the marriott marquis, and i’m joined now by andy robinson and carry kruckel andy is principal of andy robinson consulting. Carrie kruckel is vice president for development and communications. Wnt channel thirteen here in new york city. Welcome both of you. Thank you. It’s pleasure beings for having us. Our pleasure. Your seminar topic is leading the leaders how to motivate your board to cultivate major gift. I’ll tell you, we’ve done about half a dozen interviews today, and the board has probably come up in four or so of those of those six so far, but now critical the board’s role in fund-raising and how do you want to start the start? The topic? What? What? What is their responsibility? Well, where i would start this topic is i’d say we have to define fund-raising so it’s not just asking for money. It is the whole cycle of behavior. It’s identifying prospects, it’s cultivating it’s asking it’s, thanking it’s, recognizing its involving and so all that stuff. And if we define fund-raising is asking for money. There are a certain number of people, including a certain number of board members who will never get there. Okay. On the other hand, if we define fund-raising as this larger piece of work that we all have to do, then i would argue pretty strenuously they that there’s a place for everybody in that cycle, even the board members who hate to ask for money. There’s just the old fund-raising or something they can do? Absolutely there friendraising there. Friendraising yeah, we call it friendraising fund-raising atar side, which is the same thing. And it’s absolutely critical because actually, my feeling is that you don’t want every boardmember asking for money. Let’s, let’s try to go through a little life cycle of a boardmember how do we make sure we recruit board members who want to participate in this in his willingly? So, andy out recognizing that there may always be some that will will object strenuously and never maybe we’ll get to the difficult cases, maybe, but in the light in the opening lifecycle, how do we how do we recruit correctly? Andy? Well, the first thing is transparency mean, let people know when they’re joining your board that this is one of the expectations and i’m a believer and job descriptions, i think you specify what expected. Boardmember and i think the job description has to be reciprocal, meaning we’re gonna expect you to raise money on one side on the other side, we’re going to train you how to do it, we’re going to support you or give you some options and how you participate. Oh, so there actually is organization responsibility. It’s reciprocal? Yeah, absolutely. I mean, where a lot of lorts fail and be interested to hear your take on this carry. A lot of boards fail is they bring people on and they say, go raise money and they kick him in the butt and they supposed about the door do it there’s not training, but on the morning there’s not support. I mean, there’s, this sort of fantasy that they’re all they all come in as skilled and willing fundraisers. And that is rare. Carrie, how about you? For the recruiting side on the recruiting side were very strategic. And w n e t we have a committee that’s, just a people. So of my board of forty, only eight are formally asked by the chairman to be active solicitors for deb unity. And they partner with me. I trained them on. We have a whole business plan that they stick, teo, that we establish the beginning of the year. Now, just as important to that group a zach repairs to the organization is all trustees do. We asked him to give when they joined the board, we have a give and get yes expectation it’s very clear it’s not give or get you have to give not all of our trustees khun give it the same level, but they all have the ability to additionally get one of the criteria for recruiting a boardmember sir, is what is the network that they’re in what’s their orbit in sphere of influence and that’s we played too. We played to that strength rather than to a place that they may not be familiar. So that’s really key. So everybody comes in with a certain capacity said, but only a handful of people work with me on act, actually soliciting gifts, large gifts, the rest friendraising yeah, just once just one fifth of your board, but the andes to the point that andy made there is a role for everybody, so rule for only one fifth of your board is actively soliciting, right? But i would say another two to three fifths of our board are actively friendraising calling me all the time with great leads, contacts, ideas, and then the development committee is a very tight, working operation that, you know, we activate when we’re ready yeah, god, those eight people self selected or you hand picking the ones you want to turn into solicitor’s i’m in the process of handpicking because i just joined the organisation fifteen months ago, so i inherited a wonderful development committee, but some on that committee still are not comfortable soliciting. They’re more comfortable, say, leading a major gala that raises three million for the organization so that’s that’s significant in a different way, but know, as i handpick in this new new year, we have two new co chairs and they they go about fund-raising from a different very different points of view. One is a seven figure donor and annual basis, and one is a six figure donor, and so we tackle it different ways. One is very entrepreneurial and, you know, a tremendous seller, great talker, the other one is very focused wants to close five gifts at a million or more. So you create this this dynamic of what’s a business plan for each of them that kind of gets the whole committee where they want, and that also suggests the support that the organization has to provide in terms of a business plan, you’re talking about a business. Plan for each of them that’s i’m sure developed in collaboration with them, but your staffing that plan on dh you’re proposing the plan to them, right? Staffing that committee is probably fifty to sixty percent of my work. It’s a big part of my job and you say an interesting word, it’s, a business fund-raising is totally a business, and until trustees see how that business is an operation, they don’t really trust the process. I kind of think they might be asked out there on a whim, asking for money, but there are three major categories of running a very solid development shop, whether your staff of three or staff of seventy like we are, but you have to have those principles in place and regularly talk about them so that the trustees feel like there was a very strong foundation that’s pushing this for them and supporting them and support them now. And he talked earlier about proper training of a new boardmember what? What is training look like wnt for a new boardmember around fund-raising around fund-raising? Yeah, um, it’s pretty informal. I mean, we have formal orientation for all of our board members when they join and then every year all the board members get a mini kind of refresher, but when it comes to fund-raising, we sit down and we establish our goals and objectives together, i usually come in with a set of recommendations that i review with the chair and the co chair, but i really trained them as they get ready and go out. I equip them with basically the case for support, so anytime they’re out socially or if they’re setting that i’ve set them up for they know the elevator pitch, but until they’re actually going out on a call, i don’t train them until they’re going on a call. So that’s basically a really sell that briefing, and then you know, half an hour on the phone or sit down where we kind of go through that solicitation. Every solicitation is different, all right? But i don’t formally trained them. I don’t bring in outside consultants to train them. I’ve been doing this for twenty two years. Why generally, you know i might this year will be my first let’s see will be my second year kicking off the committee for the fall can i probably will have three new committee members, so i’ll probably take forty five minutes to kind of go through the rules of the game and how they’re set up tio have a great experience and a win win for the organisation, right? And then i’ll do one on one training and what kind of feedback do you like to see from a boardmember after they’ve been in the kind of meeting that carries talking about preparing them for afterwards, how do they feed back what they’ve learned in that meeting to the organization? Yeah, it’s a good question. First of all, the classic way we do this, i don’t know if this is true it w n e t the classic way we do this, we go out hairs, it’s a boardmember with a staff member and sometimes boardmember zehr skilled enough to go out alone and do asks and that’s fabulous, but i think that’s the exception rather than the rule. So usually what this looks like is thie carries of the world are sitting down with the boardmember after the meeting’s over, and sometimes you’re doing this in the car, you know, when you’re sitting in somebody’s driveway and what did? We learn how excited is this person? Are there other next steps that we need to take who’s goingto leave who’s going to take that next step? Who’s going to lead on that? How do we follow up with that person? It’s not a bad idea to produce some sort of scratchy where you actually have a standard set of questions you’re asking each other to debrief the meeting. So you actually have something you can then put in the database and use that to manage the relationship? What do you like to see andy in terms of the other relationship? Sorry, the other board dishpan ce abilities, aside from soliciting let’s say we have boardmember is that our? We’ve agreed, mutually, either i don’t solicit or you’re not comfortable listening, and we understand it. What are the other roles? Well, this could be an entire phone call baizman entire interview unto itself, but just off the top of my head, one is identifying prospects, even if they’re not willing to approach those people individually. Another one is creating opportunities to educate people, so if you’re at a radio station, you could bring him in and give mature if you’re a land trust you could take him out on a hike. If you’re working with children, you could bring them in to see the kids doing what they’re doing. It’s a cultivation piece on the back end? I’m a great believer in boardmember is picking up the phone and thanking donors, even people they don’t know and saying, hi, my name is andy robinson, i’m a volunteer boardmember with name of organization, i am not calling this evening to ask you for money, pause, you know, they collapsed on the other end of the phone, right? I’m just calling to say thank you, and these phone calls are revelatory because a lot of board members expect they’re going to get grief and people. Wow, i love your organization is so great it’s a privilege to give and it’s a really good way to ease people into fund-raising without the ask part that’s just half a dozen things they could do what i liked about that that last ideas having boardmember calls that ghetto learned the exuberance that’s out there, even if they’re calling fifty dollar donors, you could have boardmember calling fifty or hundred dollar don’t love that, yeah, i would love that. And then they learned that. There’s, this, this is base of support. It doesn’t only exist among the six and seven figure donors, and the variation on this and i’ve done this several times is tohave. Donors come to a board meeting and do a little donorsearch. Because a lot of board members think donors air from mars don’t know when they’re different species. And actually, they’re just like everybody else. Except they love your organization more than most people know. Talking alternative radio twenty four hours a day. 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 hunters. People be better business people. Buy-in this is tony martignetti aptly named host of tony martignetti non-profit radio big non-profit ideas for the other ninety five percent technology fund-raising compliance, social media, small and medium non-profits have needs in all these areas. My guests are expert in all these areas and mohr. Tony martignetti non-profit radio fridays, one to two eastern on talking alternative broadcasting do you want to enhance your company’s web presence with an eye catching and unique website design? Would you like to incorporate professional video marketing mobile marketing into your organization’s marketing campaign? Mission one on one media offers a unique marketing experience that will set you apart from your competitors, magnify your brand exposure and enhance your current marketing efforts. Their services include video production and editing, web design, graphic design photography, social media management and now introducing mobile marketing. Their motto is. We do whatever it takes to make our clients happy. Contact them today. Admission one one media dot com told you. Lively conversation. Top trends, sound advice, that’s. Tony martignetti, yeah, that’s. Tony martignetti non-profit radio. And i’m travis frazier from united way of new york city, and i’m michelle walls from the us fund for unicef. No. Durney carrie, how are how are you using boardmember sze who the ones that are not soliciting the other, the other four fifth what are some ways that they are directly involved in fund-raising they are every board member’s assigned to a committee wnt so we have seven committees, so they’re all engaged in some aspect of the mission of the non-profit my job, as i see it is the chief fundraiser is, too connect the fund-raising relevance to other parts of the opposition they may be working on, so if they’re working on programing, or if they’re working on investments or finance is what is the value of that work to the role we do and fund-raising so making the connections is really in part because a cz you pointed out they all have thinking about fund-raising they may not all be actively engaged, so the challenge is is how do you how are they experiencing the kind of the mission in a way that they’re feeling connected that keeps them kind of, in a sense, cultivated as prospects themselves and that’s a really big challenge? Because if you’re on the audit committee, that is not really a very inspiring everybody wanted wnt everybody want to be on the education committee because that’s where the programs that work with kids, mostly and that’s what they want to do because that’s exciting, but there are other fiduciary responsibilities, so it’s a challenge? So what we do is the ceo, the chairman, and i actually spent a lot of one on one time with our trustees, we take them out to lunch, we try to meet every trustee twice a year, just one on one intimately because board meetings, you really can’t connect on an intimate level. You really getting business done that’s a really valuable idea, i think connecting the leadership with the ceo with the with the boardmember include maintaining that relationship, you created friendship and trust there, but then we also i’m a big believer in events as a way to keep the trustees kind of socially connected. They don’t have to come to all the events, but they come to one or two a year in the months that you’re not doing boardmember ings w n e t we do a lot of screenings for new shows that we’re airing and that’s when we have trustees president, we give him a role, we ask himto welcome the guests, we ask him to go meet three or four people, so they always have a role in friendraising on the external side when they’re not doing the work of the board. I’m with carrie kruckel, vice president for development and communications, wnt thirteen and i see, um and anne robinson principle of anne robinson consulting their topic at fund-raising day two thousand eleven is leading the leaders how to motivate your board to cultivate major gifts, and this is tony martignetti non-profit coverage of fund-raising day two thousand eleven in new york city. Andy, what do you like to see in terms of the relations, the working relationship that carry started tow talk about between the ceo and the board around? Fund-raising well, i think the first thing is that there are ceos, executive directors who embraced fund-raising get it who are excited about it, and there are those who don’t and i have been development staff, it organizations where we had one and where we’ve had the other and this was was work is a whole lot easier if the ceo gets it and embraces it and understands it. So i’m going to start with the assumption you have one of those if you do the answer, the question, i think, is to have shared expectations that air clear about who’s going to do what and to find ways to engage people at the board level who will lead on this and the way i think about this and someone taught me this term is to have a successful fund-raising board, you need someone who is the spark plugs on the board when it comes to fund-raising because usually the way this works is staff are saying to the board, you need to raise money, you need raise money, we need help, and this is basically going to your supervisors and saying to them, you’re not doing your job well, which is tricky, she’s ill should that sparkplug be the chair of the development committee? Well, that works for me, but i’m less about the title, and i’m more about the personality, the attitude i mean, if you don’t like sparkplug, we can work with the word coach, we can work with the word cheerleader. I like the word enforcer, okay, but one spark plug, good to spark plugs. Better threespot plugs you have a really good fund-raising board, and if you can invest this person with a title like chair of the development committee that’s great, but i have seen it work really well when the chair of the development committee was more about the details and logistics, but they weren’t the one who did training and inspiring and enforcing. So i’m good either way, but somebody at a board level has to has to be that person, and the role of the ceo is to make sure you have that person to support them and doing that, make sure that they can do their job at a peer to peer level on the board. Okay, carry it sounded like you had something to say around around that relation that ceo board relationship, i would add that your board chair and your president, ceo and fundraiser have to compliment each other, so if you know what you have going into the mix and you don’t have the right balance of strengths, then you need to recruit very actively. Having a strong ceo who likes to solicit as well as the chairman can often be very problematic if they’re both looking for, you know, the chance to close on a gift and you have a donor who’s got two very aggressive people at the table that’s pretty tough, so i, like i’ve always looked to find a nice balance if the current ceo i work for is somebody who’s ah, wonderful articulator, but not necessarily was comfortable with making the ask or the clothes i’m looking for a chairman or a trustee to support him. Who has that complement the personality i generally find they’re just going backto. One point is, is that it’s really the rule the fundraiser to fill that gap? Knowing what your strength or as a professional fundraiser and playing those up, i probably can wear twenty different hats a w entity at any given time to support the trustee or their ceo or the chairman in an ask or a cultivation, because i’d have so much experience and see where the gap is in terms of how they’re going to relate to a potential donor. And i think that’s a number something non-profits can’t overlook is hiring the right fundraiser who has that kind of experience and working in a lot of different settings. On gonna frame this slightly differently. And i think this is complimentary. Really? Good development directors are good at getting other people to ask for money. Yeah, and, you know, doing it themselves? Absolutely. But the good ones are empowers. And trainers and supporters and that’s another way of what you just said. It’s a good point. Can i raise a second point, please? We’re talking, quote unquote. Major gifts and carry rolled out the six figure gift in the seven figure gift. And there are plenty people listening to this who will find those numbers to be frightening. Yeah, a thousand dollars is some organizations of thousand buckle is a major gift. The principles are the same. It’s. Not about the amount of money. It’s people who we consider major donor prospects, they get treated differently. They get more attention, we get more face time with, and we’re trying to find a way to engage their interests in a personal way. And that is really irrelevant about the amount of money we’re talking about. Okay. Excellent point. Thank you. And i agree. It’s. Very good. Carrie. What do you like to see around the the organization’s support of board? Members who are who are actively engaged in fund-raising what what kind of role is the organization playing toe to support those boards? Boardmember well, what i love to see that i don’t see much is an entire organization that understands the rule of the board and threw their department say their area of expertise, whether it’s, a on the mission delivery side or the education cider, the outreach side is that the leaders of those departments are justice. Capel is a fundraiser and communicating the progress of the mission of the non-profit to that board tends to fall into the lap of the fundraiser of the chief fund-raising almost every time you’re managing all aspects of the board, so but that’s, what i like to see, even an organization that doesn’t have it is a readiness and an understanding that we all are cultivating our board on the ceo or i’m the vice president, this department, i have a role in that, so i do spend time with my colleagues training, preparing them, helping them understand their role each year in terms of how they would interface with their committees that they’re managing, but i think that’s a really key part because it can’t just fall in the hands of the chief fundraiser at any size organization because it’s, very time consuming fund-raising really has to be out there also asking for gifts of other donors, not just working with the trustee’s. It was kind of building that pipeline, and so if you’re internally managing all components of the board, it’s very challenging, so i look for that but it’s really hard for non-profits to achieve that, you know, andy would have about thirty seconds left. What do you like to see you? So you have to be a little brief in terms of the organization supporting its member, its board members well, love, um, show appreciation, even if they don’t do absolutely everything you want them to do, reinforce anything that’s a positive behavior in this direction because these people are volunteers, they’re doing this on their own time with their own love, and we need to show appreciation even if they don’t do it perfectly if they do it pretty good. That’s a step forward, so i would honor that. Andy robinson is principal of andy robinson consulting carry kruckel is vice president for development and communications. W n e t thirteen there seminar topic is leading the leaders how to motivate your board to cultivate major gifts and this is tony martignetti non-profit radio coverage of fund-raising day two thousand eleven in new york city in times square. Carrie andy, thank you very much for being guests. It was a real pleasure. Thank you, thank you for having us. That was my pre recorded interview from this past june the fund-raising day new york conference next week. Google plus for your non-profit our tech contributor and the editor of non-profit technology news, scott koegler is with me to size up the newest big splash in social networking and also break down the silos, integrating communications, pr and fund-raising for better results from the fund-raising day conference in june, my guest will be meghan galbraith, managing director at changing our world for this week. I want to thank jean takagi and emily chan of the non-profit exempt organizations law firm and andy robinson and carry kruckel as well as the organizer’s of fund-raising day two thousand eleven for their hospitality from week to week, you can keep up with what’s coming up. Sign up for our insider. Email alerts on the facebook page. While you’re there like us and become a fan of the show, you know where facebook is. Just go to tony martignetti non-profit radio. When you’re in there, you can listen live or you can listen. Archive. The archive is at itunes. 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