Tag Archives: employee benefits

Nonprofit Radio for August 28, 2023: Employee Benefits, For Employees

 

Courtenay ShipleyEmployee Benefits, For Employees

We’re examining benefits from the employee’s perspective. What does a minimum package look like? Which extras can you negotiate for? How valuable is your benefits package? Explaining it all is Courtenay Shipley, founder of Retirement Planology.

 

 

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[00:01:05.59] spk_0:
And welcome to tony-martignetti Nonprofit radio. Big nonprofit ideas for the other 95%. I’m your aptly named host and the pod father of your favorite abdominal podcast. Oh, I’m glad you’re with us. I’d get slapped with a diagnosis of fasciolopsiasis. If you infected me with the idea that you missed this week’s show, ordinarily, our associate producer, Kate would tell us about the show this week, but this week isn’t ordinary Kate’s family, which is my family is visiting me at the beach this week. Plus my wife is here. Let’s get the martignetti and Amy to the mic to share which nonprofit is their favorite and why? That’s so, we’re gonna start with my brother Andrew. What’s your favorite nonprofit? Andrew? Well, tony, when

[00:01:56.89] spk_1:
I was 16.5 years old, I had to give some consideration to my boy scout, Eagle Scout project as I was previously working on me badges trying to get everything done. Um It was posed to me that the Saint Jude Children’s Research Hospital would be a very good cause for fundraising. So I decided to put together a biathlon in my town and we raised approximately $300 which back in 1984. And that was a pretty good amount of money and it worked out very well. So, I believe Saint Judes Children Research Hospital, uh, very good nonprofit. And, uh, donations were greatly appreciated and worked out very nicely. All right,

[00:02:02.88] spk_0:
congratulations on being an Eagle. You’re not, you’re not. Uh, no, no, we never used the, uh, we never use the past tense. You’re, you’re still an eagle scout, eagle scout for life, right? All right. And, uh, of course, uh, Boy Scouts of America, another nonprofit. All right. Next comes my sister-in-law, Nancy, Nancy. What is your favorite nonprofit? And why is that? So,

[00:02:26.01] spk_2:
tony, I actually have two. and they’re both kind of similar in, in what they do. Uh, the first one is, uh, bows and meows pet rescue. Um, and that is where we got our old dog Hank from and

[00:02:37.82] spk_0:
shout out where is bow? Wow. And meows.

[00:02:48.38] spk_2:
It’s actually in South Carolina. Oh, ok. And, um, then the other one is one love pet rescue. Um, I’m sorry, one love animal rescue. And they are out of New Jersey and that’s where we got our current dog Aspen from. So, I believe that rescuing is the way to go. Um, and, you know, you should adopt and, and, and not, uh, shop,

[00:03:03.11] spk_0:
adopt and not shop and not kill. Of course. All right. Cool. Two nonprofits. Thank you, Amy. My wife Amy. Favorite nonprofit, please.

[00:03:49.95] spk_3:
Yes. Thank you hubby. Um Mine is IC OMF dot org that stands for International Church of Music, which was founded within the last 10 months by my uncle and myself. It’s in Muncie Indiana. The mission is to provide instruments at no cost to Children who are underprivileged so that they can learn how to play music. Um It, it will also be, it is a church that we purchased and so it will be a venue for students to perform so that they can hone their performance skills, um, perform at no cost uh to themselves or their uh group. And, um, also to teach master classes. My uncle has worked in the music industry for almost 50 years and has a lot of contacts through Los Angeles and um, just, he knows a lot of good, very good musicians. And so to bring in um outstanding teachers to offer master classes at no charge

[00:04:18.93] spk_0:
as well. That’s the International Church of Music Foundation IC OMF dot org dot org. Thank you. Thank you. All right. And Kate, favorite nonprofit, please.

[00:04:47.83] spk_4:
My favorite nonprofit would have to be traveling to Dus Incorporated. Their mission is to collect um, different dance, wears dance shoes and send them off to dancers around the world who aren’t able to afford that kind of stuff. And I it would have to be my favorite because my passion is also dance. Um And I was able to actually be an ambassador for their company. And we did like different um costume collections. We’ve done bake sales and I was able to give everything that I earned and collected to Traveling Tutus. And I was able to look on their Instagram and kind of see where all that stuff really went to. So that would be my favorite.

[00:05:19.71] spk_0:
Cool. And they, they uh shared with you their impact. You saw, saw the work that was getting done. International Tutus, travel, travel, traveling Tutus. All right. Thanks everybody. Martignetti Family and uh Amy Drum Love nonprofits. Now, Kate, what’s on this week’s show?

[00:05:24.38] spk_4:
Well, tony, this week we have employee benefits for employees. We’re examining benefits from the employee’s perspective. What does a minimum package look like? Which extras can you negotiate for? How valuable is your benefits package? Explaining it all is Courtney Shipley, founder of retirement plan Technology on Tony’s sake too.

[00:05:48.82] spk_0:
National Make a Will Month continues.

[00:05:52.16] spk_4:
We’re sponsored by donor Boxx, outdated donation forms blocking your supporters, generosity, donor Boxx, fast, flexible and friendly fundraising forms for your nonprofit donor Boxx dot

[00:06:06.09] spk_0:
org. I still love that. Alliteration, fast, flexible, friendly fundraising forms. I’m sorry, go ahead.

[00:06:11.35] spk_4:
Here is employee benefits for employees.

[00:06:49.97] spk_0:
It’s a pleasure to welcome Courtney Shipley to nonprofit radio. She is the founder and Chief Plan Ologist of retirement plan Technology, a consulting and registered investment advisory firm for corporate sponsored and nonprofit sponsored retirement plans. She has worked with qualified retirement plans, developed strategies for third party administrators and conducted over 10,000 educational meetings. Number 10,001 is right now. Courtney is on linkedin and her company is at retirement plan technology dot com. Courtney, welcome to nonprofit radio.

[00:06:59.99] spk_5:
Thank you so much for having me. It’s a real pleasure to be here.

[00:07:37.44] spk_0:
Oh, I’m glad you are and I don’t, I don’t even mean to cut you short too. I mean, I’m saying this is 10,001, but you’ve already done over 10,000. So this could be number 11,004, 24. We don’t know, I stopped counting. You stopped counting. That’s probably a good idea. All right, but we don’t want to stop counting our benefits, our benefits. And we want to look at this from the employee perspective, I’d like folks who are employees to know uh what they could get, what, whether, what they’re getting is good or not. Um, things like that. So let’s start with what are minimum, bare bones, you know, you’re getting something but not a lot. But, but you’re getting the bare minimum type benefits package. What, what does that look like?

[00:10:48.20] spk_5:
Ok. So when you’re thinking about your benefits package, think of it in terms of your employer is providing your paycheck and then they’re providing these other benefits that in general are kind of building your f your foundation for your financial security in some way. Ok, so you have your paycheck obviously is your largest asset, the ability to be able to work, they’re providing that we know that one, the next one that you might not be thinking about is what happens if you have a health issue. Obviously that’s health insurance, right? Or if it’s really bad, you can’t go to work. Um, you’re out for an extended period of time. That’s gonna be disability insurance. What happens to your paycheck if you’re not around anymore? And somebody else depends on it. That’s where life insurance comes in. What happens if you don’t want to work forever in a day for that paycheck? Well, that’s where your retirement plan comes in. So that’s going to help you build a paycheck in the future from the money that you’re saving today and maybe your employer is contributing to. And so when you think about your, your financial security, from that perspective, that’s, that’s kind of the easy thermometer for seeing, you know, what, what’s good, what’s not good. And then everything else after that, um will fall into a different category for you. For example, maybe you are early on in your career and you know, you’re going to need to get some more education to advance. Um, and maybe those tuition type of reimbursement programs are gonna be useful for you. Maybe you live in a big city and getting to work is a pain. So there’s a, there’s a transportation stipend that you’re given or parking on site. My gosh in the Washington DC area to have parking, what a luxury, um, maybe you’re looking more towards, uh, you’ve got student loan payments and we know with, with many nonprofits, if you stay for a certain amount of time, then perhaps you, you can have your student loan, um, taken care of by the government depending on if you qualify for all of the programs. Um, so that’s another thing to be thinking about or would they pay something towards your student loan, a student loan payback program? You might be looking at like, do they have um discounts with maybe child care providers or someone that can help, you know, your, with your aging parent and, and figuring out what they need to do from a caretaker perspective and this could be also just building out further on like the health insurance piece. Is there something that’s going to help with mental wellness? Is there something that’s going to happen with financial wellness or these different types of programs? Um, and those could be formal or informal? Right? So when you’re looking at what they’re providing to you, you want to have a list of what’s important to you and then you want to also look at their list and say what on this list is relevant to me, right? Because they may have all the benefits in the world. But if it’s not something that resonates with you and you know, you’re not going to use it. Well, yay for having great benefits. But what a bummer that you, you don’t get to use all of them if

[00:11:11.48] spk_0:
you don’t have student loan debt or Children and then student

[00:11:13.39] spk_5:
loan, what I just talked about doesn’t matter,

[00:11:19.08] spk_0:
repayment assistance and child care don’t matter. Um And some places even provide child care, not just right payments, but some, some larger organizations have on-site child care.

[00:11:27.23] spk_5:
That’s usually a very large organization. Yes, for sure.

[00:11:30.15] spk_0:
Or maybe they have an arrangement somewhere. All right. Um You mentioned, you mentioned that these something could be formal or informal. What, what do you mean by in a more? Well, I think we know what, well, go ahead make the distinction. What’s what’s what, what do you distinguish between formal and informal benefits?

[00:12:25.27] spk_5:
So let’s talk about um the financial wellness piece. That’s an easy one. They may have someone that you can talk to that comes along with your retirement plan, for example, or maybe you call the plan’s record keeper to have your, your financial questions answered. Um Maybe it’s a formal program on site where they come every other month and present different topics. And um also one on one counseling, maybe uh as a third tier of that, maybe you have access to software um or budgeting software like you need a budget or something like that where you get that for free being a benefit um of being an employee there. So from a um this comes along with or occasionally we do these types of programming to something that’s more formal where it’s obvious that they are paying for a third party to provide something for you.

[00:12:38.45] spk_0:
Ok. Ok. Um You mentioned life insurance. Is that a common one? Is life insurance common?

[00:13:01.09] spk_5:
Yeah, I would say that that’s a pretty, a pretty common one either for the um for the nonprofit to sponsor to pay for like a basic benefit. Those are usually very inexpensive Um on the employer side to, to have a group life insurance program. Um, and it may not be a ton of coverage. So it may be up to $50,000 or $100,000 or something like that. And then the employee often has the ability to buy up. So if you do have other people that depend on your paycheck, um, that could be a, a really cost effective way to get extra coverage through

[00:13:16.88] spk_0:
work and depending on what level you’re working at you, you might have different degrees of death benefit. So the CEO might have a half a million dollar policy. That could be

[00:13:27.13] spk_5:
possible. That could be possible. Yeah. Mhm.

[00:13:31.89] spk_0:
Yeah. What about, um, what about vesting for these, what we, that, that’s the period you have to wait before certain benefits become active.

[00:13:42.83] spk_5:
So, um, yeah, there’s two ways. So, really, I think what you’re getting at is eligibility, right? How long somebody has to wait before they can enroll in the program, is

[00:13:52.34] spk_0:
it? Yeah.

[00:14:42.48] spk_5:
Is more like uh portability. So with uh like for your, your retirement plan, for example, they may give you an employer contribution or employer your match. And if you left right away without having been there very long, your employer contributions might not all travel with you, they might not all be yours to keep, there could be a investing schedule. So you earn ownership of it over time. Um But with eligibility, yeah, that’s, it’s all over the map. Um I’ve seen it be as soon as day one when you’re hired, I’ve seen um it be staggered. So certain benefits kick in at certain times like your health insurance starts first, but maybe your retirement isn’t until you’ve been there for one year. Um I’m seeing more and more employers trying to make that easier from an administrative burden and also for employees who just want to know how much is going to be missing from their check right by the time they put their own contributions in. So I’m seeing that come down as far as the amount of time it takes to be eligible for these types of programs and also less of the staggering like, well, you get the health insurance this month, you get the retirement this month, you get the life insurance this month, that sort of thing.

[00:15:03.38] spk_0:
Uh Is it fair to include a remote work among benefits? I mean, it’s not a formal package like you uh uh uh a nonprofit would hire uh an insurance company to provide life insurance. But, right. Isn’t that fair? Is, is that a fair conversation to have when you’re talking about uh benefits?

[00:15:57.42] spk_5:
Absolutely. Absolutely. We’re seeing, um, employees, you know, asking for it. Um I would, it’s going to depend on the employer and the flexibility and the amount of work and the type of work that, that you’re doing for them. But it’s always good to ask like, where does this need to take place? But there’s also the other component of how much does your team need you to be around? And how do you use the facetime strategically within your organization to help people’s careers grow over time because a lot of times when we’re talking to an employee, um it’s usually about finances and they’re disgruntled. A lot of times it doesn’t have anything to do with their compensation as much as just the work environment or not feeling like they have a career path. And so being able to attract and retain the talent that you want. It, benefits are really important. But also kind of that, that how we do work now after coming out of COVID. That’s a, that’s a really big question to answer. How does work flow work, how does work get done? How do people uh get to move up in their career at, at your organization?

[00:16:37.80] spk_0:
And I understand your point, you know, in terms of the remote work, uh it it, it varies. But are, are you seeing trends or are, are you, are you seeing a willingness to allow a couple of days a week out of an office but maybe not full time or like, where are you seeing employers settling around the, the virtual work

[00:16:45.54] spk_5:
question that? Well, it’s still kind of all over the place, but I would say that there’s a, there’s a much higher willingness to, I guess if I have to choose a trend, it would be two days, offsite, three days on or vice versa, at least coming into the office twice a week. Yeah, those are, those are probably the most common that we’re seeing now.

[00:17:06.63] spk_0:
Ok. So if you’re asking for more than that, you know, you might not be aware that you might be outside the, outside the norm and uh you may not get it. Ok? Ok.

[00:17:17.68] spk_5:
At this point in time, I think we, you know, we’ll see next year’s trend will be different, probably

[00:17:43.07] spk_0:
fair enough. Absolutely. August of 2023. And, and uh in terms of negotiating what, well, what, what are, what are employers spending on average on benefits in terms of like percentage of salary? Like if, if you say, uh I used to hear, you know, an employer adds 30% for benefits, uh 30% of the comp the, the, the direct cash compensation. They, they’re, they should expect to add another 30% per employee for this bundle that you talked about, is that still, is that still roughly fair that your employer is spending about another third of your, your, your salary on benefits or is that at a date?

[00:18:07.13] spk_5:
No, I think that’s probably pretty close. That’s a great estimate. Anyway, if you have, um, employers who are, who are trying to make those plans, that’s a really good number to aim for. Um, and yes, and you know, there with nonprofits, everybody’s trying to stay under that 20% number for the financial reporting and whatnot for, um, for overhead expenses. And so, um, that also comes into play too with how, how nonprofits wanna divide the, the, the pie out for their overhead.

[00:19:05.62] spk_0:
Uh II I have a lot of trouble with that overhead. You know, those overhead restrictions, people are not overhead, people are arguably your most valuable critical uh required resource that’s not overhead. Like, like that’s why we have benefits. Yeah, not overhead like uh the hardware on the doors, you know, that’s overhead. Well, we got to replace a latch on the door that’s overhead. Uh We’re not, we’re not latches and door knobs and all right. Uh So I, I don’t, but I know 30

[00:19:37.16] spk_5:
percent number is a pretty good one to aim for another. Yeah, another thing that, um, where we see employers fall short sometimes and, and um, employees should take this into consideration is uh a total total compensation statement because a lot of times employers are not necessarily rolling back the curtain on how much these, these types of programs cost. And so it’s important for an employee to know how much extra is being spent like what’s what’s really in their compensation package, you know, these are value benefits and they are worth money. Um So when they’re, when you’re comparing um maybe one job offer against another having that total compensation statement or just even an estimate gives you more information about, you know, the value of your benefits package.

[00:19:55.93] spk_0:
Yeah, that’s fair. Right. You wanna, you, you wanna know the total, I mean, it’s, it’s certainly part of total compensation. Yeah, it’s, it’s, it’s as much as uh an additional third. So,

[00:20:07.21] spk_5:
but back to my original comment about how um it’s important to have in your mind like what, what types of benefits are important to you, the other part of that is using them because if it uh if you say that an employer matching contribution is important in your 401k or 403 B plan and then you don’t contribute enough to get that match. That’s money that you are, that’s compensation. You are literally leaving on the table.

[00:21:18.00] spk_0:
Yeah, that’s such a big mistake. Yeah, leaving money on the table. But what, what’s, what’s sort of typical now in terms of matching back when I, back in the dark days of my career when I was, when I was a uh an employee, I would, I can’t be an employee anymore. I would be a terrible employee for anybody. But back then I, I used to have this very generous one at a university where I think if we, if we contributed 5% the university contributed seven or 7.5% of my salary. So of course, I put the five in because you want the max, right? You want, I mean, there’s another 7.5% of your salary approaching 10% added to your salary each year by your employer. So, so what, what that, that was uh those are the early 22 thousands. Yeah, those were late 19 9, 19 nineties and early, very early two thousands. So what’s more typical now in terms of AAA match in a retirement plan?

[00:21:26.78] spk_5:
Well, let’s start with how common a match or um a what we call non elective. So thank you for breathing. Here’s money in your retirement plan. Um That is very common nowadays. So if uh

[00:21:39.10] spk_0:
what, what, what’s very common non

[00:21:55.27] spk_5:
or a nonelected or a match. A nonelected is where you’re just receiving the they, they’re just giving you 3% into your retirement account or 5% or something like that. So what you described a minute ago was having to put something in to get something. So you see it both ways and it’s very popular for the employer to be making a contribution. So that’s, that’s one thing to consider is like is this a good benefits package? If you’re getting a an employer contribution in your retirement plan, that is a step in the right direction to say yes, these benefits are, are decent.

[00:22:24.02] spk_0:
Ok. And so while we’re on that right, I’m gonna dig a little deeper on that. We’ll come back to the, to the broader point. But what’s a, what’s a sort of a typical nonelected contributions like 1% to 3? What, what, what, what are you seeing?

[00:23:00.45] spk_5:
Yeah. So um I actually pulled this data just in case from the plan sponsor um defined contribution survey from 2021. Um Both 2021 2022. So what’s most common for, for the, on the smaller side of the nonprofit um Endowment Foundation group is um somewhere around 15% usually gives less than 3% on a nonelected um The next most common, the next most common one is um to give, it looks like between three and 6%

[00:23:09.55] spk_0:
and what percentage of what percentage of the market is giving between three and

[00:23:26.28] spk_5:
six. So for a nonelected contribution, it is about, hold on here. So 30% are giving exactly three in the smaller space and then the 3 to 5 is 15 to, to 25% depending on what size. So those are the most common. Once you get above that 5 to 7% mark, it just drops off completely. So

[00:23:49.57] spk_0:
it sounds like it sounds like roughly 50% are giving between three and 6%. Is that

[00:23:53.44] spk_5:
right? Yeah, we’ll call it in that range three

[00:24:09.91] spk_0:
to six or is it 3 to 5? 3 to 6? Yeah. Ok. So roughly 50% are giving 3 to 6%. All right. So if you’re in the 3 to 6% non, that’s a nice, that’s a nice group. You get, even at 3% you get an additional 3% added to your salary. So. Ok. Ok. So now let’s go back. All right, I just wanted to drill down on what, what’s, what, what it’s looking like. So now your bigger point was uh something that I don’t remember now because I made you digress. Uh We start, you, we uh you have a lackluster host. I, I promised we’d go back but we will. So

[00:24:34.74] spk_5:
well, if you want to know what the most common matching contribution is,

[00:24:38.91] spk_0:
you drill down on the nonelected. Thank you. I knew one of the number. Ok. So what does, what does those numbers look

[00:24:58.86] spk_5:
like? So matching is, is more popular, more, more organizations offer a match than they do the nonelected. So, um, in the matching space, you’d see that 4% is the most common. OK. 4% is the most common. And then the next most common thing after that would be 6%. So imagine how much,

[00:25:05.92] spk_0:
how much do you have to contribute to get the, is it one for one typically it’s probably

[00:25:11.16] spk_5:
one for one. Yeah.

[00:25:12.76] spk_0:
Ok. So you give 4% you contribute 4%. They contribute another four.

[00:25:18.78] spk_5:
Yeah. Well, if you give one, they match you one all the way up to 4%. If you’re putting four. Yeah, you get the full match. So, yeah,

[00:25:25.83] spk_0:
I, I think it’s smart to do the, the four because your, your employer will give you the, uh, the max, whatever your max happens to be, if they will match it, you know, if they’ll go to six, look, you’re, you’re getting more than a 5% increase in compensation. It’s not direct cash compensation. It’s in your, it’s in your retirement plan, but they’re still taking money out of their pocket and putting it into yours,

[00:26:04.47] spk_5:
retirement is a long way away. Um, most of the time you’re gonna need to save between 10 to 15% is what we always recommend because that usually gets most people mathematically on track for retirement. So if you’re coming in and you’re putting in four and they’re putting in four, you’re almost there. You know, so it’s getting you, it’s nudging you the right direction to get to. You’re about halfway. Mhm. Yep.

[00:26:36.90] spk_0:
Yep. Ok. So I want folks to know, you know, if their, if their benefits are, are crummy, if they suck, I want people to know that they, you know, maybe can get negotiate for more. I mean, if you’re, you know, if you’re at if you’re at a nonprofit and you’re looking for a raise and your employer says no raise is not. We don’t have the cash. Well, what about the benefits? Can we tinker with the benefits? A little? You, I’m, I’m the max is now for. Well, they, they may have machinations to go through, right. Uh, their, their plan may, their plan may not allow an increase, but there are other benefits. You know, we’re not talking only about retirement. You could start negotiating around your health care policy, uh health care plan or your disability or the life insurance or the transportation stipend or the tuition reimbursement or the parking or the student loan debt, the debt repayment. So, you know, you can, if your employer says no, no raise this year, well, can you re tinker with the benefits a bit? Right.

[00:27:07.75] spk_5:
Did you just ask for your birthday off? Right. Exactly.

[00:27:08.90] spk_0:
We didn’t even talk about days off. We didn’t even, we didn’t talk about days off. Thank you. That’s a great one. What, what are standard days off? What should we be getting? What does it look like

[00:27:47.88] spk_5:
that’s all over the place. Unfortunately, I don’t have really good statistics on all of that, but I would say that, um, you know, the longer that you’ve been in an organization, the more vacation days you typically earn, that’s a, that’s a trend that we see. Um walking in, uh you know, having no longevity with the company, you’re going to get far less and there we are seeing a trend towards just days off versus having to specify. Is this a sick day? Is it a vacation day? So, giving a little bit more flexibility about the combination there, um There’s also the ability to accrue hours as your longevity increases with the um so accruing, you know, eight hours over this period of time, you know, if you worked this long, you get this many vacation days, that sort of

[00:28:15.93] spk_0:
thing. There’s also the carryover. What, what are you allowed to carry over from year to year versus hopefully you’re not losing vacation time or, or doing, please, please don’t lose, I mean, it’s paid time off. Yeah. And so that’s another that and since you, you said the birthday, that, that, that’s right in line with what I was thinking in terms of negotiating. All right, I can’t get a raise. Can I get an extra week off next year? That’s a week of unpaid time. I mean, paid time that you get to take off that has value, that’s valuable. You’re lessing, you’re working one week less for the same amount of money because the, the employer said no raises for next year. So can you negotiate around time off?

[00:29:05.87] spk_5:
One of our very creative clients decided that you mentioned the, the time off that expires and so they allowed people to instead who are going to lose it, be able to take that turn it into cash and put it towards their student loans. So that was a, a creative way that they, you know, they help them out that way. Now there are some tax implications, there’s some tax implications, but overall, like this is a nice, this, that was a nice gesture for sure. Like, don’t, don’t lose everything, don’t lose these days. Get some cash value for it.

[00:29:43.82] spk_0:
Right. So that, that was income, I guess they had to report that they had to report that. Correct. That transfer as income. All right. All right. So be, but, but days off, if you can get an extra week off next year, that’s not, you don’t have to report, that’s not a taxable event, an extra week off, but you’re working one week less to get the same amount of money. So you’re that consider that a raise, right? It is a, it’s a raise, work days for the same amount of money I got a raise. So, you know, be creative about your negotiating, don’t just accept, ok, no raises next year. Fine.

[00:30:06.42] spk_5:
But if you, if you’re talking about leadership too, um a lot, we’ve, we’ve had some of our clients that are trying to attract new executives in either CEO CFO hr uh C hr O, that sort of thing. Um There is another benefit we

[00:30:11.51] spk_0:
have, we have Jargon Jail on nonprofit radio, the Jargon Jail. C hr O what the heck is

[00:30:17.36] spk_5:
that Chief Human resources officer.

[00:30:19.79] spk_0:
All right. All right. Well, I bet I’m not the only one. All right. Cro, all right, you’re out of

[00:31:19.93] spk_5:
jail, you’re out of jail. Thank you. Thank you so much. Um, so, uh, it, when, when you’re trying to attract that talent, um, and those people have, there’s not as many of them and they’re hard to find and, you know, they’re hard to retain. And so that’s where we’ve seen some pretty creative negotiation as well. I don’t know who’s listening and if they’re in that type of leadership role, but um being able to, to negotiate, well, help me pay off my graduate school loans. You know, I, if I stay around in three years, then I get $10,000 towards that loan or if, um uh you know, I want to save more for my retirement, I’m trying to play catch up because I’ve had a long career, but I haven’t been as good a saver as I should have been. I’d really like to have a 4 57 B plan. Um, and, and be able to have extra money going towards my retirement. Now, the 4 57 B is a really important non-profit benefit because they’re the ones that get to have it. Uh It can only cover about 10 to 15% of the total population of the employees that are there, but it’s basically a way to save more for retirement. So, uh the funds are at risk if the nonprofit does go out of business to be subject to creditors. But that’s, you know, if you’re the one who’s helping run it, make sure that doesn’t happen. Right. Um,

[00:31:43.92] spk_0:
we’re on the employee side. So the A 4 57 B, yeah, this is not a very common benefit or it is

[00:31:47.23] spk_5:
not all the time. No, it seems to be forgotten by many nonprofits. So, if you are an employee who’s walking into a situation where you have access to one of those, that’s a pretty forward thinking organization.

[00:32:31.39] spk_4:
It’s time for a break. Donor box quote, I regularly experience how donor boxes easy setup and ultra swift pay, fast checkout deliver what we need. Donor box allows us to focus on why we do this, our clients and their needs. End quote. That’s from Jenny N A board member and recurring donor at Organic Soup Kitchen in Santa Barbara, California donor box helping you help others. Donor Boxx dot org. It’s time for Tony’s take two.

[00:34:21.37] spk_0:
Thank you, Kate. It’s still August and that means it’s still National Make A Will Month. Yes, every August National Make A Will month and I use this month to remind nonprofits that wills charitable bequests same thing. They mean the exact same thing, gifts and wills charitable bequests, that’s the place to start your planned giving. Always launch with the simplest gift, the most popular gift, gifts in Wills. And I’ve been posting on linkedin all month by the end of the month, I’ll have all of my 18 reasons why wills are the re wills are the place to launch your planned giving. Like the one that says that uh it’s by far the most popular gift as I already mentioned and how easy it is for your donors, how easy it is for your staff that it helps you build endowment, it ensures your sustainability. So there’s I think five or six ideas right off the top of my head, the full 18 are on linkedin. They will all be there by the end of next week and for a lot of you listening weeks after. If you go to my linkedin, you’ll see all the 18 reasons why wills are the place to start your planned giving fundraising. I hope you are enjoying the the mass celebration around National Make A Will Month. I I we can almost, it can’t contain the excitement around National Make A Will month for those of us who are celebrating the holiday. That is Tony’s take two Kate.

[00:34:24.28] spk_4:
We’ve got but loads more time. Let’s get back to employee benefits for employees with Courtney Shipley.

[00:34:34.82] spk_0:
What kinds of details? I mean, we’ve talked some about the details like uh vesting versus um what was the uh eligibility? Thank you. Yeah. So what other, what other like details should we be drilling down about? I mean, so you know, we talked about retirement planning a good bit. But what other detail type things are, are like devils in the details. We should, we should we be thinking about,

[00:35:43.60] spk_5:
I think you should be thinking about ease of use and getting help. I think those are two important parts. So uh when you get a whole bunch of benefits that are thrown at you, do you really want to sit there all day and read? No, you want it, you want it to come with a person or you want it to come with at least a chat bot or something to help answer questions. Everybody’s different. They’re going to use benefits slightly differently. And so it’s important for you when you’re choosing between your different health care packages or um, your different uh offerings to be able to have somebody that you can, you can ask. So I think that that’s a very important thing to be looking for is who’s gonna help me make these decisions back in the day. Yeah. Go ahead. Yeah. Support. Yeah, that is support. Yeah. So I think support is very

[00:35:46.50] spk_0:
important. And are you, are you meaning support in the nonprofit or support from the provider that offers the life insurance or the disability, et cetera? I

[00:35:56.47] spk_5:
would say it could come from either way but probably more commonly from the provider

[00:36:01.57] spk_0:
from the provider.

[00:36:03.87] spk_5:
But hopefully, then hopefully when the nonprofit has chosen these types of benefits, they’ve, they’ve figured out a way to get help to their employees. That’s a big cultural difference. I think that if you are looking at your benefits package, your compensation package, the offer that’s coming to you and you see that they have the ability for you to talk to people to help you make decisions. That’s gonna tell you a lot about their culture right there that they care about you as an employee.

[00:36:31.10] spk_0:
So I think that’s very important and the other was uh ease of use,

[00:37:12.15] spk_5:
ease of use. So how, how do they, how do they put all these disparate systems together? Your benefits package is not going to be provided by the same provider? Do you have a website where all of the documents are housed? Do you have videos on, on one page? Is there portal? What, what makes your life easier? Do you have to go to six different phone numbers if you need to get help or you need to submit a claim or you need a, you have a question answered about something. So how has, how has the nonprofit put this together to make it easy for you to access it? That counts for something

[00:37:27.83] spk_0:
for sure. What about other uh other benefits that uh you might be able to negotiate for things we haven’t talked about uh like little special things that you’ve seen that folks have, folks might be able, like I said, a able to, to weed the uh their nonprofit or their potential employer. You know, one of two situations might be at a nonprofit or it might be weighing offers now or, or in the future, uh weighing competing offers. What, what are the things have you seen folks? I don’t, I hesitate to say, get away with, but, you know, get, get access to that, uh might not have been offered, uh, you know, in the first round.

[00:39:03.40] spk_5:
So the, um, if, if they have the ability to, to ask for um, a health savings account, there’s only certain types of health insurance policies that go with it. The, the HS A eligible, um, programs, it used to be called high deductible. But that’s kind of a misnomer. You start to do the cost analysis, but the thought is that you can put money aside into the HS A, that money can stick with you throughout your time. You can continue to fund it. You can use it to pay your health care expenses. You can keep it rolling until you get to retirement and use it. Then it’s a triple tax free benefit. So it’s tax free going in. You don’t, you know, the, it comes out pre-tax from your check, it sits in there, it can grow, it can be invested, that’s all tax deferred or never to be taxed. If you take it out for health care reasons, it comes out tax free. So that’s an awesome benefit. If they haven’t considered it, you could try it. You know, and you’re saying I want more benefits that’s one of the ways that you might be able to negotiate maybe after you’re already employed there or something to be looking for. So that’s, that’s a nice, a really nice benefit. If you want to use it, it’s a great option. Um, and you don’t see that everywhere.

[00:39:08.26] spk_0:
That’s the HS A, the health savings account. Is that the same as flex, flex spending?

[00:39:17.78] spk_5:
No flex spending is, um, a really nice benefit. But, um, that’s the use it or lose it. So you have to use it within the calendar year on certain types of expenses. The HS A, you never lose it. You just, you can use it to pay for health care expenses. Um, and there’s a list of them on the IRS website that it is always being updated. Um, but you just keep rolling it forward so you can accumulate a pretty darn good balance in

[00:39:36.66] spk_0:
there and the flex spending you have to use within the year. Yes. Pardon me?

[00:39:43.36] spk_5:
I said that’s also a nice benefit to have the FS A. Yeah.

[00:39:46.97] spk_0:
Um, it just, what else?

[00:39:49.08] spk_5:
Uh, 5 29 college savings plan.

[00:39:53.76] spk_0:
Yes. Explain that. I’ve seen those. What do, what do those look like?

[00:40:35.13] spk_5:
Sure. So that’s, um, that’s going to be for folks who have kids more, more than likely, however, it’s for education. So it really could be for anybody if you want to start saving something for going back to grad school or something like that later in life. Um The um it’s money that is set aside and it grows without any tax implications. As long as you use it for education expenses down the road, then it comes back out tax free. Um Employers technically could make a contribution to it if you um if, if there’s access to that so that could be something. Um And it’s, it’s really designed to help with school, like of some sort. So that could be private K through 12 schools. Um room and board tuition, things like that also higher education. So like I was saying before, more of the um uh undergraduate and, and um graduate degrees.

[00:40:54.08] spk_0:
So that, that can be, that can be for anybody that can be for yourself. Children could be grandchildren, nieces, nephews and you, you

[00:41:01.08] spk_5:
can change the beneficiary, you can change the beneficiary. So if you have somebody who doesn’t go to college and your family and you want to use the funds, you can just change your, the beneficiary to you. So there’s, there’s a lot of flexibility with it. It’s a nice, it’s a nice tool that can be used in, in several ways, but mainly you do pretty well if it’s for education.

[00:41:20.56] spk_0:
All right. And those are the 5 29.

[00:41:30.88] spk_5:
So having a um a payroll deducted 5 29 plan, that’s a, so it comes straight out of your check, it’s real easy. Um There’s also, uh and like I said, the employer can make a contribution to the 5 29. That would be extra special. So that could be something

[00:41:46.17] spk_0:
maybe then, you know, you got a, you have an exemplary package. Yeah, that’s not emp 5 29 plan if your employer is contributing a percent or two to it. Right. Ok. That’s that. Ok. This is what we wanna know. Do our benefits suck or they middling or are they exemplary? It’s important to know you want to know where you stand. That’s

[00:42:08.91] spk_5:
right. Um, also on the subject of education, uh, the tuition reimbursement, I think I mentioned that earlier. A lot of them will have a tuition reimbursement program. Um, you could also look at, will they pay for certificates for certain skills or conferences, um, or other types of things that help you with your career long term? Make you a more valuable professional

[00:42:19.13] spk_0:
development. Is there, is there a budget for professional development? Can I get more professional development dollars? No, there’s no raise this year. No, no raise for next year. Right. Well, how about professional development? Uh, can I get $2000 to go to a conference?

[00:42:32.92] spk_5:
Yeah, I think it’s perfect. Right. That’s a great way to

[00:42:35.85] spk_0:
use some other way. I was just thinking of conferences because people are trying to get out more now because that we can. But, uh, can I get, can I get some professional development money? Ok. It’s great. Courtney. What else? What

[00:43:01.22] spk_5:
else. Um, well, I, I want to point out that that’s kind of a win in both directions if they go and get a certificate that makes them a more valuable employee to the nonprofit. Like, that’s a win, win for everybody. Right. You’ve got more skills, they’ve got more skills that you have. Um, I think the

[00:43:02.41] spk_0:
HR O should, the C hr O should recognize that. Right. Exactly. C hr O should know,

[00:43:09.59] spk_5:
um, other student loan programs like a student loan payback program would also be extraordinary on the, on the list of benefits. So if they’re going to give you $50 a month towards your student loan or something like that, that’s a, that’s a big deal. That’s a huge deal as a matter of fact. So, um,

[00:43:24.50] spk_0:
meaning it’s kind of rare. Yes,

[00:43:52.65] spk_5:
it’s rare and it’s super helpful because if you think about just looking at how your debt works and paying off extra every month, it reduces the life of the loan. It saves you massive amounts of, of interest payments over the life of the loan. So that is a, that’s one that we really like. Now there’s mixed feelings, of course about student loans and, you know, should we should, should they be wiped out the, you know, there’s, that’s been kind of a political

[00:43:57.90] spk_0:
side to it. Yeah. Is it in because there are populations who never can’t afford college or? Yeah.

[00:44:05.14] spk_5:
But, but at the end of the day it’s an attraction and retention tool. So, I think employers should.

[00:44:20.51] spk_0:
Right. Right. Ok. Ok. Anything else we could be, uh, negotiating for if we feel our benefits are on the lackluster side or you exhausted it? If, if that’s it, you know, that’s ok.

[00:44:46.22] spk_5:
I think lunch and learns on different topics are probably another good one. Could you bring in a speaker about XYZ? That’s, that’s kind of an easy one for employers to, um, you know, if you want more knowledge, if that’s what you’re after, have somebody come in and, and, uh, speak on a certain topic or negotiate a discount for us for XYZ product. So, we’ve seen, we’ve seen that happen sometimes where, um, even if it’s just the coffee shop next door and you get 5% off or something, that’s, that’s a bit, that’s nice. Yeah, because if you think about it, I mean, most nonprofits are, are heavily involved in their local area. So, you know, can they leverage that to also provide more benefits for their employees?

[00:45:09.28] spk_0:
Ok. Ok. Excellent. Think on the local level too. All right. All right. Um, what else, what else do you want folks to know about from the, again, you know, of course, the, from the employee perspective that, uh, way, maybe ways of negotiating or what, what else, what else would you like folks to know about?

[00:46:13.01] spk_5:
Well, I think when you, when you go to negotiate it’s always important to recognize the you the benefits, the compensation, all of that is going to vary based on how large your employer is. Um the their budget, right? The different constraints that they may have um from outside where they’re located. Um So it’s important to remember that you wanna have the value conversation about how you’re a valuable employee and that’s why you’re asking for these additional benefits. I think that’s an important thing to remember. Um Because the, it’s easy to say yes to an employee who’s very valuable, right? Um It’s kind of a no-brainer.

[00:46:15.20] spk_0:
So you need to make the case, you need to make the case of, of your value, whatever, whatever value it is, you bring expertise uh experience. Um non for nonn doesn’t have to be formal education. We’re not talking about that necessarily just, you know, what, what’s the, what’s your value as an employee? Not just what do you do, but what do you bring that somebody else can’t bring?

[00:47:45.38] spk_5:
Yeah, or what, what great work have you done? That’s made things a lot easier for everybody or, or what, you know, what are you bringing to the table? Because I, when we’re, when we’re in um conversations with folks who remember that I do um corporate retirement plans. And so when we’re talking with, with people, a lot of times it’s centered around their money and I just need to make more and it’s like, well, ok, but don’t forget that they’re employing you to do a job. And so they, they, they have an easier time when your, your performance reviews are great. So that’s just something to, to keep in mind of what moves the needle, what’s important to the organization, um what fits within their culture. Um When you go, when you go to ask for things. So I think that’s, that’s important to think about. Um And also don’t, if you’re, if you’re comparing two benefits packages, we have clients that just can’t afford to do amazing things, but they do good things and the opportunity to work there is still great and the culture is great. And even though you may not make as much money in the long run, the experience that you get or the um the cause that they serve is, is worthwhile. And so I think that’s one extra level that for profit entities and for profit employees don’t have to think about as much because a lot of the nonprofits really do make a great difference and they are um they’re a different type of work environment. So that’s also something that has value to it that I don’t think we, we think about sometimes.

[00:48:39.61] spk_0:
Yeah, absolutely true. Right. The benefits are just one component, 11 variable among many when you’re weighing whether you want to stay working where you are or whether you’re uh considering different options that you may have, you know, a couple of different offers, the the benefits are just one variable and certainly that the quality of the work, the culture equity issues, you know, these are all, those are all value variables as well. All right. All right. How I leave it there then you feel? Ok,

[00:48:42.90] spk_5:
I do. Do

[00:48:43.50] spk_0:
you? All right, I do. But I’m not the expert. You are

[00:48:48.41] spk_5:
fair enough

[00:48:49.39] spk_0:
expert feels good. All right, Courtney Shipley, you’ll find her on linkedin. You’ll find her company at retirement plan dot com. Courtney, thank you very much for sharing your expertise. Thanks a lot.

[00:49:02.69] spk_5:
Thank you so much for having me. I really

[00:49:04.23] spk_0:
appreciate it. My pleasure.

[00:49:14.82] spk_4:
Next week, Amy Sample Ward returns with Reflections on their Bosch fellowship in Berlin. If you missed any part of this week’s show, I

[00:49:17.63] spk_0:
beseech you find it at tony-martignetti dot

[00:49:49.76] spk_4:
com. We’re sponsored by donor Boxx, outdated donation forms, blocking your supporters, generosity. Donor Boxx. Fast, flexible and friendly fundraising forms for your nonprofit donor Boxx dot org. Our creative producer is Claire Meyer. So it producer Kate Marett Devices and shows. So is our web guide this by Scott Stock.

[00:49:54.49] spk_0:
Thank you for that affirmation. Scottie be with us next week for nonprofit radio. Big nonprofit ideas for the other 95% go out and be great.

Nonprofit Radio for May 19, 2017: Healthcare Funding Options & Leadership Options

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Chris Labbate: Healthcare Funding Options

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Oh, hi there. Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent on your aptly named host this is show number three hundred forty, the three hundred fiftieth non-profit radio is going to be coming up it’s on july twenty eighth, three fifty music comedy special news i hope you’ll be with me for three fifty i’m sending spies special a pre show special live listener love to the fans of crystal a bat this insurance guy has a big fan base that this guy’s, a rock star who sells insurance live listener love to chris’s special live listeners, and i’m glad you’re with me. I’d suffer with my own militia if you try to soften me up with the idea that you missed today’s show health care funding options today is options day first, kriss la bat walks us through fully insured self-funding level funding and minimum premium. So you understand your choice is paying for your employees health insurance chris’s with marsh and mclennan agency and shared leadership options. We talked leadership options with jean takagi are legal contributor and principle of neo the non-profit and exempt organizations law group co ceos. Anyone? How about holacracy shared leadership on tony’s? Take two. My finger is still wagging, responsive by pursuant full service fund-raising data driven and technology enabled, you’ll raise more money pursuant dot com, and by we be spelling supercool spelling bee fundraisers. We be e spelling dot com for all his fans. And, of course, for everyone else. Here is crystal bat with health care funding options. My privilege to welcome chris lay back to the studio as regional executive vice president at marshall mclennan agency, chris is an authority on employee benefits, including customer driven health plans and alternative funding. He shares his expertise and twenty eight years of industry experience to help you see how innovative employee benefits and hr programs can lower your costs. The company is at mm a hyphen and e dot com crystal bat. Welcome to studio. Thank you, tony. Pleasure to be here. I’m glad you are. Thank you. Read your colleague last week. Mark. So you’re going to shine like mark shine did yes, i know you’re up to it. All right? So we are we’re talking about funding funding options for employee health. Let’s, let’s reassure listeners first, this is not going to be impacted by health care reform that may come or is not going to be impacted seriously, right? Yes, that’s that’s correct? Most likely, the funding options will stay the same. Okay? Because we really can’t predict what’s coming out of congress, but we don’t expect the general ideas around funding that you and i are going to talk about to be impact. Correct, okay. Right? We don’t make the show irrelevant in two weeks after. Okay. All right, so it turns out you don’t have to fully fund. I mean, i think probably the majority are ah, now i know you do have some stats, actually, but i’m thinking small and midsize non-profits probably most of them are just osili insured, fully insured, really insured plan. Correct, but you have options. Correct. So? So in a fully insured plan, you’re just paying a fixed monthly rate that the insurance carrier sets for your organization and if its profitable to them it’s profitable them. If it’s not profitable, they’re taking on the all the risk skin and losing out. Yeah, okay. They probably don’t lose out too often, though. I’m guessing they might lose one year, but they’re probably gonna lose two years in a row over the long term state business. They have to make profit. Okay. Exactly. All right, so i think pretty. Yeah. People are pretty accustomed to that. The fully fully insured and ah it’s easy it’s level payment, i mean, and you know exactly what to expect. Her employees have a set of benefits and it’s all easily defined and of course, insurance, company’s, managing it right. So we’re just talking about the financing of the benefit plans, right? So that’s, often transparent to the employees, don’t get involved with that. So the employer is just paying the fixed costs, and they’re all there are alternatives to the fully insured, called self-funding, which can be explored for more, most organizations, five employees on up. Ok, so even for the smallest organization, correct benny on the state. But, yes, okay, okay, cool. S so this is going to be impacted by state law. Also, correct, yes, all right. Um now, if we are, if we are self-funding then we’re taking on some risk, correct, you’re taking on a portion of the claims risk so that portion you’re going to fund as the claims come in, but what’s often misunderstood about self-funding is that there are insured components built into self-funding so it may not be at the same level that you have. You’re fully insured, fixed rate, right? But you do have insurance components to protect you. Two different suits to specific types. There’s ones called specific insurance to protect you against any one person having a claim over a certain amount. Okay, you decide is the employer and you purchased that coverage of twenty five thousand fifty thousand. If a claim hits that level, the insurance kicks in, and then the second is called aggregate insurance, which is protection that your total claims that going don’t go over certain amount. Okay? All right, so i got you. I got you so you can. There are some. Yes, there are some insurance protections built into self-funding. All right, now you do have some stats about, um um about what? What? The percentages are around. Who’s self-funding. And how it’s. Been changing since nineteen, ninety nine like percentage self-funding vs versus the full, fully, fully insured thank you write. So especially since health care reform has has kicked in there’s been a movement towards self-funding on dh that basically is benefiting employer groups that have a favorable risk of benefits around the country. They’re showing. About sixty one percent of covered workers that have health insurance through their employer are covered under some form of a self-funding plan. Yeah, well, okay, so almost two thirds correct under some form of self self-funding and that’s changed from nineteen, ninety nine that was forty four percent correct. A big change. Okay, okay, um, so if we’re if we’re going to consider this self-funding option, there are some different kinds of costs that we need to be aware of, correct. Right now, we’re just like we have about two minutes before break. So why don’t you just kind of tease out the idea of these different kinds of costs we have to be aware of? And then you’re not going to more detail. Perfect after right after that. So in general there’s, two categories of cost, you have your fixed costs that you’re paying on a monthly basis and you have your variable costs will be, which will be your claims costs as they come in. Ok, fixed, invariable. All right, we’re going to dive into that a little more. We take our break a minute and a half earlier, so and then kristen are going to keep talking, finding out what your options are around, maybe self-funding all are a part of your employee health stay with us, you’re tuned to non-profit radio tony martignetti also hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a quick ten minute burst of fund-raising insights published once a month. Tony’s guests are expert in crowdfunding, mobile giving event fund-raising direct mail and donor cultivation really all the fund-raising issues that make you wonder, am i doing this right? Is there a better way there is? Find the fund-raising fundamentals archive it. Tony martignetti dot com that’s marketmesuite n e t t i remember there’s a g before the end, thousands of listeners have subscribed on itunes. You can also learn maura, the chronicle website philanthropy dot com fund-raising fundamentals the better way welcome back to big non-profit ideas for the other ninety five percent with chris sabat when we’re talking about funding options for your employee health now, christine, you do not have lots of letters after your name. Last week we had i says that mention mark your colleague market lots of letters especially easy, like sees after name there’s all your where’s, all your credentials, they’re all just built into yourself. Yes. You know, i’ve been in industry since eighty nine, and i have my master’s in finance and marketing. I’m just really the experience in the industry on the benefits side. Okay, okay. Your bona fide? Yes. Okay. Okay. All right. So let’s. Now, zai promised diving a little more on these. Some of these costs that you have to think about taking on if you were goingto fundez self-funding fixed costs like like what? Like what? So the first fixed costs you would have is your cost to administer the plan. And typically you’re hiring an insurance carrier or a company. It looks like an insurance carrier called a third party administrator to perform all the tasks that that insurance carrier would under a fully insured plan. So paying claims customer service id cards for employees booklets. So from the employees perspective, if they don’t know what the funding is, it looks and feels like a fully insured plan to them. There’s no difference. Okay, so you’re outsourcing this administrative work. Exactly. No need for you to hire people to be doing this for you. Exactly. Cos that’ll do it for you. Yes, at a fraction of the cost of a fully insured plan. Okay. Okay. Um and the what? What else? Fixed costs. There’s this ways that now we now we get into some of the insurance coverage mentioned earlier, protecting us against a really unhealthy employer employee or or or or or aggregate. Go ahead. Absolutely. So so most companies that self-funding will have two types of insurance associated with their plan and their purchasing this protection. And the first is called specific insurance protection against anyone large claim going over a predetermined amount. And as the employees you, you picked that amount, whether it’s twenty five thousand, fifty thousand and as that amount goes up, the premium associating it kind of goes down exactly. Okay? And the second type of coverage is called aggregate insurance. And that’s protection that your total paid claims will not exceed a certain amount. Okay. And that’s, very inexpensive coverage. All right. And so these air part of your fixed costs that you’re going to be absorbing? Yes, if you’re if you’re exploring self-funding, you’ll get a monthly bill with your admin costs and your stoploss costs all printed out per employee, just like you get a fully insured premium bill. Okay, okay. On. And then you had the variable costs, which is basically what you’re going to be paying out for doctor visits. Right, etcetera. That right. Exactly. So the variable cost will be the claim’s paid out for your employee population covered under the plan. And in general, when you’re purchasing your stoploss insurance, the underwriter at the stoploss carrier will determine what they expect. Your claims to be given your employee population and then they’ll determine a maximum exposure. So if your claims go above this maximum amount, the insurance will kick in and cover it. Okay, that maximum exposure is usually set ten to twenty percent higher than your expected claims for your popular do-it-yourself kush. Exactly. Okay, exactly. Now, what about reserves in all this? I mean, if we’re going to be doing that, we have to have money set aside for the payment of claim. Exact. Exactly. So when you first go into self-funding plan in the first few months, you typically will not see any paid claims. Somebody goes to a doctor today. It doesn’t get reported two to three weeks from now when it gets paid. Okay, so there’s a cash flow advantage upfront going into a self funded plan, but on the back and if you ever terminate a self-funding plan, there’ll be claims coming into the third party administrator or the carrier that need to be paid based on service states prior to when you terminated, right? Right. That’s called run out or term a terminal liability. Okay, yeah, while you were self-funding toe at the end mean, you benefited in the beginning, right at the end. Claims are still going to be coming in as you exact your i guess. Or now fully insured. And you ended your your self-funding crackers. But but so that has to be a reserve fund, right? Don’t law must require something like you’ve gotta have ah dedicated account or something with the money. For the old yes, so typically a joint bank account set up with the third party administrator there paying claims out of this account when you had that crash flow advantage at the beginning of the program when your first during out self-funding we recommend that you just bank that money and that’s setting up the reserves for the event if it ever happens where you cancel the self-funding plan, okay? And how about knowing? Oh, well, i guess that goes into your expected cost. Me knowing how much to put into this reserve correcting for for a decent sized organization, i don’t know, like ten employees, i mean, could conceivably be half a million dollars or something. I mean, i’m just numbers don’t stop my head, right? You’re going to be more precise, you’re probably gonna say, well, it’s gonna depend on age, right and correct help histories, etcetera and it’s broken out by the underwriters on a monthly basis. So, you know, so when you get your stoploss coverage, they’ll give you a claims factor per employee per month. And that is how you calculate the number of employees times that claims factor gives you your exposure for the expected exclaims focus and that’s the amount that’s got to go in this dedicated reserve for typically yes, now you can’t you can’t be using this money for other purposes correct it, sze designated restricted or something for the self-funding plan? Yes, it should be air marks for the self-funding plants. He had the money available to pay their letting your employees down your absolute, obviously seriously. Okay. Okay. We don’t want people run operating that. Okay, um all right. So we’re talking a lot about self-funding what are what are some of the reasons you that non-profit might actually think about doing it? There’s some advantages? Yeah. There’s some big advantage associate with self-funding the first is there are a bunch of hidden taxes and fully insured plan. So under health care reform, there’s four four and a half percent in taxes that get attacked right onto a fully insured great. Okay, now, health care reform. Today on the day now, we’re recording couple weeks earlier, then this is going to air. So health care reform by that you mean the affordable care act? Correct? Or obamacare? Correct. Okay, not something that may be happening in congress in april of this year in may of this year is that right? That’s correct. So in the affordable care act, there’s a tax on non-profits that are any fully insured krauz any fully insured plan has attacks built into it that gets funded, the funds go right towards offsetting the cost of the affordable care act. Was it attacks on the amount of premium? You correct? Oh, interesting. Okay, right. Forty five percent you sent were correct and there’s also in some states and local taxes that get applied to fully insured plans. So when your self-funding you’re circumventing the state rules and some of these fully insured taxes at a federal level, yeah. Okay. All right. This one advantage. All right? What else are there? Other reasons it we have? Ah, younger, healthier group. You’re going to benefit because you’re paid claims will be much lower then expected or similar to expected. And then you’re paying less than you would under a fully insured plan now wouldn’t and ensure offering full insurance? Wouldn’t they be factoring in that you have a younger, healthier workforce. So health care reform change some of the factors that go in. They do account. For age coverage, tear with a single or family coverage if you’re a smoker or a nonsmoker, but generally you’re paid claims in a small group will not count towards calculating your rate. Wait a minute, we better impact that statement. Hold on, you’re paid claims in a given group will not will not what? I came here if you’re unaffiliated, if you’re in a fully insurance plan small group market? Yes, your claims do not drive your rates typically. Oh, they don’t correct because it’s the law of large numbers, they’re playing, they’re not going to base your rates on your claims. If you’re five people or ten people that’s what healthcare form actually did away with to try to stabilize the small group market just like those of us who are individuals, we go to the exchanges. It’s my premium is not at all based on my history could i mean, i think they might have asked if i’m a smoker. But that’s all yes, that’s one of the factors taken you okay? So we’re getting very small. So that’s at one end of the spectrum, tiny individual. I see what you’re saying. They’re all right there it applies to small groups as well. So i’ll give an example of you if you’re in a fully insured plan, you’re paying fixed rate every month and say your premium comes to one hundred thousand dollars a year. Okay, now, if you wanna self-funding plan, you’re paying your fixed costs, which might be twenty or thirty thousand will estimate and then there’s seventy thousand and projected claims what your claims only coming at ten thousand, you’re only paying ten thousand wonderful insure plan you pay the full hundred thousand still alright, so there’s an opportunity here for a new organization to engage in employee health, health, health and wellness, right? Yes, if you’re going to go fully every, i’m sorry if you’re goingto self-funding you can enjoy some benefits of every every, every two weeks, we have a five k run or, you know, whatever i say, right? I mean it’s perfect segway twenty foot that one of the next advantages. If you have an active wellness program where you’re engaging your employees and getting healthy, that can parlay into fewer claims and under self-funding plan, you benefit directly from that you’re not paying out claims on un employees that don’t go to the doctor. Okay? What size organization do we have to be? Or was it eliminated completely under affordable care act, where they would start looking at our claims history and our wellness programs? If we were going fully insured so it vary state by state eso it khun b fifty employees, one hundred employees and and more. All right, you have to be that size for them to start factoring in your individual act. Your program’s done. But i mean, you could have, like, smoking cessation. You could have, i don’t know. Organization provided fitbits and everybody’s got eight or ten thousand step daily minimum, right? You can have all kinds of programs to try to save yourself. Money. Those air, those air common wellness programs. There’s not innovative thinking, innovative now company and fried. It provided fifty. Now they’re doing that. Yes. Alright. I thought maybe i had some some great insights. Okay, um all right. So i just happened to be a big wellness fan so you could save some money if you doing self insurance. Self-funding self-funding i should say on and there’s a couple there’s. A couple more advantages. Get more transparency. You see, you’re paid claims were under fully insured arrangement. You typically do not especially smaller employers, so you don’t get to see the claims them all employers typically, we’ll not see their claims history because they’re not allowed or that usually carrier policy not to give out paid claims to smaller employers, especially if they’re rates aren’t dictated by plane. So that gives you the ability to better budget for future costs because you have all the information and it helps you design with plan design. So if you know people are over using the emergency room, you might up the co pan the emergency room copay and you might lower the copay on your urgent care centers or tele medicine to try to drive people with lower cost setting. Yes. Okay, so you could drive some behaviors. Okay. I could see that there’s one last one. It gives you the ability to not have to include state mandated benefits in your plan. And that’s, a big benefit for companies who have people across state lines because they can provide one seamless plan designed for all their employees. You say companies. But we non-profit organizations exactly. All right. So different. States have different mandated benefits, correct packages? Correct. Okay, i saw a bit of a little i mean, this is kind of interesting, well, privacy issue coming out of what you were just saying, if you’re self-funding you’re able to see claims history now you know who the unhealthy people are, right? Who’s got bad behaviors, etcetera mean, who wrecked a lot of so the reporting khun b done where’s d identified which just means you’re seeing general information, but it is if you have a smaller the company, you might be able to identify who those people are. S o typically you would want tohave an internal privacy policy, which which follows the hip national privacy standards with a privacy officer and a policy in place to protect that information and only have certain people buy-in certain people given access to the information within your organization. Ok, ok, that actually dovetails with what? What mark and i talked about last week levels of compartmentalization correct categorization, i believe he called. Okay, um, who typically would be looking at this data if we’re going self-funding who looks at this on a monthly basis so typically be somebody in hr maybe. Something in finance and it’s almost it’s, almost always d identified so you know, you’re not going to know who the people are, but they’re looking at it, just seeing what claims were being paid out and budget and future years, and then also the behaviours trying toe like you said, friends instance, if we see emergency rooms being overused, correct plan design, and then we could also just have meetings about listen, people, you know, you’re hurting our you’re hurting the organization by using the as your primary care or something like that, you know, you’re hurting. We’re trying to stay self-funding for for the these reasons because we think it’s better for you then than being fully insured. But you’re making it hard for us to do so right? Get a primary care physician. Yeah, you can have meetings about the right can you talk about? You can talk about that, you can have any things. And you, khun target wellness programs like you reference if you see your population has a history of high blood pressure or a lot of smokers, you can use that information to taylor educational program. Bring people in current, bring people in to talk about hypertension. Manage? Absolutely. Okay. Diabetic diabetes management? Yes. If people are having a lot of diabetes related issues. Okay. Okay. All right. So we still have some time left. What? My voice just cracked still. What? What happened? I asked you what else? What else could we talk about? Some of the some of the negatives with self-funding. So if you’re moving to a self funded arrangement, you have the variable cash outlay potential. So one month your claims can be very favorable. The next month you can have high claims. You do have those reinsurance caps built in protection. Stoploss is you’ve already examined all the jargon. I got tongue now, stoploss but you can still have some variants and some come organisations prefer the fixed costs associated with a fully insured plan. You know what you’re paying your budget for it and that’s your costs for the year where self-funding can vary over the course of twelve months. Okay, um, how does it work? This is a very basic question. But if you if you are self-funding, how does it work in terms of a network of hospitals and doctors? Have you that’s? Good cause. You choose what providers are available to your employees. So when when you hire the third party administrator or insurance carrier to administer the plan there, providing that service for you so you can hire a big insurance company and use their network, you’re renting their network to access those discounts. That’s part of the administrative fees it gets broken out into network rental fee utilization management, he gets into a very a lot, a lot of details broken out, focus. Okay, well, because you can use somebody’s network and not be insured by the exactly you’re taking the risk, you’re just using them to administer the plan. Roger. Okay, i say interesting. Okay, um, what else? We still got a few minutes left, so that zoho your disadvantages of having any of that was that was one big one. The other one is if you ever want to get out of self-funding you have that terminal liability. So if you say i’m canceling my self-funding plan today, you’ll have a couple months of claims to pay out. Still for claims that were incurred prior to your cancellation date. And at the same time, if you’re signing up for a fully insured plan, you’re paying the fully insured rates so it’s like a double payment for a few months to get out of this self-funding plan. I got to get to cool things. I got terminal liability and stoploss yes was going around saying, you sound like a genius, alright stoploss german labbate that’s a term reliability problem on dh that i could touch on to two other quick thing before you do, though dahna the terminal liability i mean, could that could that go on for years? I mean, suppose someone made a claim while you were still self-funding and then they continue to have related issues to that claim like so i don’t know what a surgery that went bad or something, and then years later, they’re still having, like following surgeries to that infection from when you were self-funding what good question so it’s driven by the nhk earl date of the claim? So if i go to a doctor today and i’m self-funding today, it gets paid dahna self-funding plan for that same condition if i go to the doctor next month and next month i’m under a fully insured plan gets paid by the flame. Shirt plan. Oh, so the general liabilities just the run out. They call it from the from the self-funding period when people went to the doctor during that plan here. All right, so it’s not considered like a pre existing condition. Correct? Where the now insurance company, because you’re fully insured kicks is going is going to kick it back to you from what? Your self-funding days doesn’t work like that. Correct? It does not. Does not. Okay. Okay. All right. That’s, some reliability thisyou xero everywhere you’re in our daily lives. Term liability stoploss okay, what else you got? I could do real quickly to other hybrid type products between fully insured and self-funding. So you have some combination once called level funding, and this gives you the fixed costs of a fully insured plan where you paint a rate every month for employees. But at the end of the year, if your claims are favorable, there’s the potential to get a refund of a portion of the terrible claims. Oh, so you benefit if if claims air. Good. Act. Okay. And if claims are are not good. You’ve paid your rate for the year and you walk away. Okay, well, that’s, because you have what you want had some stoploss coverage it’s all built into, like, a fully insured rate. So you have that fixed rate, and then if your claims are favorable there’s something called a settlement done at the end of the year, you know, if you would get money back, but there’s no potential. The additional dellaccio more correct. Okay. And then you have you said in which another hybrid? Yeah. There’s there’s one more call the minimum premium arrangement. And this is sort of like a fully insured rate, but you’re carving out the claims part of it and your funding the claims as they actually come in. So similar to level funded. But you don’t have the wait till the end of the year to get the benefit of favorable claim get, like month the month? Correct. Exactly. Well, okay, so there’s. A lot of issues to think about, and i guess way just have, like, a minute and a half left or so, but i guess this all comes down to risk tolerance. Exactly. Do you do? Do you want to just write off the wrist completely and give it to an insurance company? Or would you like to get some of the benefits of doing it yourself and maybe even having healthier employees? But you’re taking on some of that risk. Correct your risk tolerance and your ability to handle some cash flow changes from one month the month with self-funding and it really comes down to analyzing what would my costs be under a fully sure plan. Total costs. What may cost being herself funded plan at the maximum claims that’s where the stoploss carrier says you would not pay more than that. Yes, you’re a total costs on. Then what would your cost be under the expected where they expect your claims to be? Given your employee population and looking at those numbers will give you a good feel for where he should be. Okay. All right. Crystal bat. Andi. I demoted him because he’s, a crystal bat is a regional executive vice president at marshall mclennan agency. Okay. I wanna thank you very much, chris. Thank you. Tony called my pleasure. Coming up. We have jean takagi and shared leadership options. More options for you first. Pursuant, they’ve got a new webinar. Big surprise. It’s free designing experiences. That inspired donorsearch every brand elicits a feeling, you know this like think disney, starbucks, united airlines and each of your donors has an impression of your organization based on their experience and interactions with you with your brand. On thursday, may twenty fifth, you can join lutheran, our ministries, brad never ary and pursuance senior vice president hillary noon and learn how to create immersive experiences that inspire greater engagement from your donors and potential donors. Brad is going to share how lutheran our explored the journey of a key audience identified opportunities to improve on their experience with his brand, and they put in practice places that are goingto make measurable impact trying to make change. Of course, this will be archived if you can’t make the live session, but if you can, you register at pursuant dot com quick resource is and then webinars we’ll be spelling who needs to engage millennials? Maybe you’re bored has raised that as ah as a possibility or a need. Do you feel it’s important for your sustainability? Perhaps what you waiting for? We be spelling dotcom get started for pete’s sake. Hosta fund-raising spelling bee. This is not your seventh. Grade spelling bee. You know this. Check out the video at we b e spelling dot com and then talk to the ceo alex career. Set something up or just get more information. We be e spelling dot com. Now, time for tony’s. Take two. That damn finger is wagging again. Are you properly registered in each state where you solicit donations? You need to be listen to my admonishing tone. It’s not going to stop. Where are you sending e mails? Sending direct mail hosting events, maybe buying ad space. Do you have a donate? Now button that admonishing tony’s not going away. Each of these things is a solicitation, and it triggers the registration requirements. Charity registration. You need to get it done. I can help you. You could do-it-yourself. You need to be in compliance in each state where you are soliciting donations. My video is that tony martignetti dot com that is the admonishing tony’s. Take two live lesser love. I’ve got a ton here in the united states of america and not too much abroad. Really. So let’s, uh, let’s. Start here in the us of a with tampa, florida. Very loyal, lifeless and live. Out to you special tampa. You’ve been with us for a long, long time. Woodridge in new jersey, swan’s borrow north carolina, new york, new york and brooklyn. New york really got two out of three borrows this week last week. Course we had all five. But brooklyn. I’m glad you’re with us. Manhattan. Thank you so much, but gives he with that westchester that’s. Not bad. North of the city. Poughkeepsie live. Listen, i’d love to you also, white plains neighbors in westchester live. Listen level so to newjersey caldwell, new jersey, hackensack, new jersey. Still no altum pandu jersey, where my mom and dad are sitting right now. Uh, moving ah! Moving way down south san marcos, texas live. Listen, love out to you, san marcos on then coming back to the northeast, stratford, connecticut were all over except on the west coast. I know what west coast person who’s listening but he’s on the line so it doesn’t count. Not this week. And let’s do germany got to live listeners in germany? We cannot see your they’re so concerned about privacy in europe we cannot see your cities in germany nonetheless live. Listen, love guten tag the podcast pleasantries. They got to go, you know that you’re tired of me saying it, but i’m not going to stop the podcast. Pleasantries have to go out to the over twelve thousand, listening in that method pleasantries to you. Thank you for being with us on your schedule on demand, and the affiliate affections were looking to grow that affiliate list. Our outreach director, belly, betty mcardle belly. No, she’s. Not ever. Billy. Betty mcardle is working on that. But for the effect for the affiliate stations that exist right now. Of course i am. And fm stations affections to you. So glad that you’re station includes us on your schedule. Thank you. Jean takagi is with us waiting patiently. He’s the one i was alluding to, um and he is the managing attorney of neo the non-profit and exempt organizations law group in san francisco. He edits the wildly popular non-profit low block dot com and he’s the american bar association’s twenty sixteen outstanding non-profit lawyer he’s at g tack on twitter and i believe he’s calling from an airport. Welcome back, jean takagi. Hi, tony. How are you? I’m very good. Very well, are you, in fact, in an airport? Is that what happened? I’m now at an airport hotel. A little bit better. Okay, where are you? What city you’re in? I’m in los angeles, los angeles. So that’s not far from you for san francisco. Okay. Okay. S a little background noise. I kind of like that. Mixes things up a little bit. Um, if anybody gets difficult while you’re on the phone, you know if you have to drop the phone, you know, and fight somebody off, just explain what you’re doing first before you just dropped the phone. Okay, i’ll make sure i hold them off, ok? All right, well, do what you have to do but inform me first that’s the first your safety is secondary to informing me that’s what? I’m that’s basically, what i’m saying, it makes understood, ok, thank you very much for that. So we’re talking about some shared leadership options. Um what? What brought this to your attention? You know, shared leadership has kind of been a little bit of a hot button issue recently amongst non-profits that are thinking of more equitable practices and in attracting younger people. Millennials, you might refer to the you know, to that group and say that they may not be is ingrained with the hierarchical structure that those of our generation tony, maybe comfortable within used to, and they’re really wanting tio have more of a say early on in their careers, so, you know, shared leadership issues, all sorts of forms are really starting tio to take hold in some practice on dh starting t gain in more popularity so are you seeing this? I guess mostly then in organisations where the leadership is thirtysomething or so well, you’re seeing it from from a lot of younger people, for sure. So living in the san francisco bay area in with silicon valley nearby, and this is not just a non-profit management or organizational structure, this is started in the for-profit world in this sort of spread into some non-profits but yeah, it’s a lot of younger tech companies, like suppose that that sort of kicked it, kicked it off some of experimented with it and left it like medium, but one of my organization that i’m on the board of a compass point non-profit services also experimented with holacracy and while it isn’t continuing in a whole keeping the whole model, we’re keeping aspect of it because you feel it’s really valuable. Okay, now i’m not going to put you in jargon jail because i know we are going to talk about holacracy but you just try to slide by me, and i want you to know that i’m quicker than you. So i i noted it, but you’re you’re you’re pardoned thiss time because where i know we’re going to talk about holacracy alright, so so sort of following from what you’re suggesting i can see the advantages there’s empowerment, there’s, there’s, there’s shared, there’s shared buy-in and empowerment of others. Yeah, and i think that works for leadership development with the team more people having more voices, teo impact what’s happening with the organization, what they’re doing, they become more interested in it that probably helps in recruitment and retention. It helps internal communication and collaboration, and it i think, necessitates cross training because you’re talking and trying to understand what your little part of the organization, how it may impact every other part of your if you’re one of the decision makers, are you’re making decisions as a group? You got to know the other three other parts of the the organization how your decisions are going to impact them. Yeah, i can see that this is not something you embark on overnight, right? Especially in the need for cross training and understanding. What’s going on across the crust of our organization for the thing people are going to be sharing in leadership now. Yeah, absolutely. The other, you know, benefit that has some people. Have been writing about it lately than it actually helps facilitate and succession planning. So we have more people who maybe pull, you know, in the pool of candidates to take over for for a ceo or an executive director. That maybe leaving the organization? Yes. Okay, that’s a good one, right succession plan. We’ve talked about that. Uh, ok, alright. See cem value. Um, but i see some potential downsides to this is going to be a lot more cumbersome for decision making. Yeah. I mean, you can imagine when you have too many chefs in the kitchen. I guess it is the metaphor analogy that people make on dh. So yeah, definitely neo-sage delayed decision making and that khun delay implementation of ideas. So you’re kind of the slow ship that takes forever to turn around. It can result in inefficiencies, and then you may lose opportunities, not acting’s. Quick enough cause confusion at the start. A cz you’re trying to figure out, you know, who’s accountable. How how do we, you know, make a decision? What if we’re split for? For what? If we start tio a form cliques within our organization and then we start to battle or engage in disputes with other factions of the organization. So their their potential bound falls that you have to actually really account for careful. Yeah, potential for open conflict. I mean, one of the things we’re going to talk about his co ceos and, ah, i mean, if the two people don’t agree. I don’t know. Yeah, get factions and jesus, you could start running like our white house. I don’t know. Okay, we’re gonna get to co ceos. All right, um, let’s. See? Well, we may as well go there. Um, what air you saying? Have you seen this? Have you have you seen this one in practice, where there were two ceos? Maybe any of your clients execute this? I mean, i’m just i’m just wondering if you’ve seen it firsthand co ceos, yeah, way have so definitely on. And i think this is actually becoming more of a trend, and i’ve seen it more in the nonprofit sector have limited exposure to for-profit sense since since i left that that world but i think you know, times are getting much more complicated. Management has also become much, much more complicated with, you know, technology changes non-profits are exploring earned income and advocacy and collaborations and employees laws are changing and then non-profit corporate and tax laws are ever changing, and right now there there’s some big, big changes that are planned, of course, on dh. So with all of that complexity, can one person really be the leader through the organization understand all of those those factors and be ableto lead the organization through all of it and that’s kind of why there’s been a little bit of a draw forming co ceos and succession planning is the other thing is, i think there’s supposed to be a huge turnover of executive lake leadership is the baby boomers are starting to age out of their employment, and they’re starting to retire on dh succession is, uh, is a problem if we don’t have adequately trained and experienced people in those roles, and coke co ceo platform’s can really help ease that problem. Ok, but with with all those issues that you mentioned for leaders to deal with, i’m not even sure that to people with their combined skills could manage, you know, can understand all that in the level of depth that that’s necessary. I don’t know, i’m not even sure two people could do it, so yeah, ee don’t know that i’ve ever seen three tio, no, but i’m just wondering if if i’m not sure to really adds that in my sense of it, too doesn’t really add that much more value. You could say it doubles, but i’m not even sure that’s enough, so if if i’m right, then why not just stick with one who has a strong team of people directly reporting to him or her it’s an interesting argument, tony, and indefinitely the single ceo structure is the one that were more comfortable with and probably the one that’s going to teach comin in for a long time still. But first, for some organizations, experimenting with two ceo structures can work out. And i think where we’ve seen this practically is where the two leaders share kind of a long term relationship, so they’ve already comfortable with how they work on dh, how they would make decisions together hyre the areas of responsibility, maybe divided so that one person has final decision making over these fears of the operation and the other one over other spheres, and sometimes, you know, in a very simplistic way, some people just refer to it is the internal management and the external management. Yeah, okay, some of that makes me makes me think of mika brzezinski and joe scarborough. I don’t know, okay, all right, let’s go out for a break and when we come back, jean, i’m going to keep talking about the shared leadership options. Stay with us. 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I’m peter shankman, author of zombie loyalists, and you’re listening to tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Welcome back to big non-profit ideas for the other ninety five percent um, jean, i’m thinking this is goingto take some time to to implement and, uh, before you start to reap benefits from it, if you if you do it’s not you, you’re not going to see this immediately. The advantages? Yeah, you know, i think it’s going to take an investment on depending upon what level of shared leadership you’re talking about co ceos is probably the a fairly simple level, relatively speaking of shared leadership, but yeah, it’s going to require an investment, it may take a failure, teo, actually get it going the way you want it. So there’s definitely a lot of learning. It relies on it, you know, having a shared vision and common values amongst the shared leaders on if you don’t have that established, you really shouldn’t do this. You have to be careful of the amount of money, time and other resource is that you’re going to have to invest because that’s all got to be budgeted in if you don’t incubated and invested and nurture it, it means it’s probably not going to work. We’re also gonna need a lot. Of patients among our staff. Yeah, yeah, i think that’s absolutely, absolutely right. You run the risk of having that go to mom, go to pop kind of run things, right? Good cop, bad cop. Yes, right. Somebody’s, thie other ones said this, but i said no. So i’m coming to you, right? Right? You got to beat that stuff down. All right? Interesting let’s go to one that i want to make sure we spend enough time on this. To me, it sounds like anarchy, but you’ve said your organization you’re on the board of is doing some of this. The pro you call it program autonomy is what is that? So the general idea and they’re different forms of this, but this this is on the other end of the spectrum of complexity. So this is a complex form of shared leadership where each program or each division oven organization is fairly autonomous, so doesn’t all rely upon going to the ceo on the ceo makes the final decision. Each group within the organization which might be divided into programs, will make their own decisions now don’t know, probably be working with the budget that’s been approved by the board on then segregated out into the different programs. So they know what the operating rules are within within their group. But figuring out how to distribute the leadership and that’s the one of the buzzwords, sum, sum. Avoiding drug in jail again, it’s. Really just distributing the leadership amongst the different programs or the different groups within the organization and there’s. One particular type of model that i mentioned earlier, which i should have waited until we got to this segment. That’s called holacracy on dh. That is a particular form of distributed leadership, where the different groups that that are taking on these local decision making authority rolls are called circles. No, james, no, jane. Yeah. Can you still hear me? Yes, i hear you. Okay, last thing we heard you say was holacracy is made up of circles, but you need to explain. Yeah, so you know, generally the way holacracy works is so it’s a form of program autonomy, although again, the circles or self managed groups don’t necessarily have to be divided into a program that could be divided into function. So there might be one for fund-raising for service delivery, for grants, for events, for public communications. So however, you decide you want to divide up the circles, it’s going to be an iterative process where you’re always modifying it. So every month you’re going to consider whether you should have the same circles or different circles, and each individual is actually going to take a role with multiple circles, and in some cases they’ll be the leader of a circle that’s going to help decision making and help facilitate that circle or that group of individuals within that circle to make a decision. And in other circles they may not be see that that leader on dh, so they’ll just be part of the group that makes the decision making, and they might be on three or four, five circles depending upon what their skills are. All right, this is anarchy to me, but you’re saying it works a compass point, it weaves we’ve tried it for maybe a year and a half, and we’ve decided to modify it so we’re keeping aspects of it. But we’re not keeping the whole thing, so you’re anarchists of anarchy. You can’t even follow the anarchic model of program autonomy. Okay, well non-profits pride themselves on their ability to experiment and hopefully do yes, alright, yeah. So who is but who’s orchestrating the overall? I mean, there’s got to be, doesn’t there? Well, i’m i’m answering my question, but better ask it as a question, doesn’t there need to be one or maybe two people if the co ceos overseeing the coordination of all these pola craddick circles yeah, there, you know, so it’s it’s, largely governed by two principles, one is you’ve got the law on the latto has the board of directors on top of the organizational hierarchy and does require a ceo in most states, or or a president that that’s going to be ultimately in. Charge however, they’re going to be a set of rules and systems, and this has to be very transparent and holacracy so you’re not leaving everybody to go. I don’t know who to go, teo, you know, maybe i’ll ask this person so in holacracy there’s a large set of rules that everybody knows and everybody has to abide by, including the ceo and that’s where how the different relationships between the circles are all codified and how the decision making goes from one circle to another. But ultimately again, it would be a non non-profit corporations you have a board of directors and ceo have to oversee the whole thing and can decide how to modify accordingly. Okay, maybe something for listeners toe look at program autonomy, let’s say i wanted to jump to the most complex one because i want to make sure enough time sometimes our talk at the end, our topics at the end get cut off a little bit. I don’t want that to happen with program autonomy and the holacracy pola craddick circles still feels very crystal lee to me, i don’t know dahna all right, let’s, go to we just have about two. Minutes left explain how the ceo and the board might be the leadership share well for small organizations that particularly all volunteer organizations it’s usually all hands on deck, right? The board is completely active in running the programs of the organization as well as just doing their regular board duty. So, you know, you got the ceo because somebody has to be ceo of a corporation that might be called president or chair of the board, but somebody has got to be identified in that way, and what their decision making authority is going to be will depend upon what the board wants to give to that position, but board make decisions board takes actions on lee at meetings or by written consent, so whenever individuals are actually running programs, they’re not running them as board members. They’re running them of volunteers with certain delegated authority. And what the board has to really be careful of is that they’re making sure that they’re delegating authority for somebody to run an event or somebody to run a specific program there delegating with due care, meaning that they’re not quitting somebody who would be totally unqualified and in experience latto lead. Something of importance to the organization because if it is, gets into trouble, you know, the board could be held for violating the produce very duty’s not exercising reasonable care in making that delegation, and they can’t just say, well, that was another board members, i couldn’t tell them what to do. That’s not the case. Yeah, yeah. Ok, i see. I see i see a greater responsibility and risk for for the board under this one, but it makes sense. I mean, they’re taking a more active role in the leadership of the organization. That’s, right? So that’s, that’s very much shared leadership where all board members see themselves as equal, but when they’re exercising roles that are different from meeting at boards and taking actions like approving contracts are approving, you know, the by-laws there acting as volunteers, so they have to realize that they’re wearing a different hat and the authority has to be properly delegated. We’re gonna leave it there. Jim takagi from ah hotel in los angeles managing attorney of neo and you’ll find him at g tak neos, the non-profit and exempt organizations law group. Thanks so much, gene. Thanks. Have a great day. I pleasure. Thank you. Next week, diane lettered returns with your grants team in and out. If you missed any part of today’s show, i’d be seat. 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