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Hello and welcome to tony martignetti non-profit radio big non-profit ideas for the other ninety five percent on your aptly named host our listener of the week is aubrey burghdoff, our she’s executive director of the california symphony, she tweeted, i love this episode! I listened a second time and took notes. She was talking about the march twenty fifth show this year on lead and matching gif ts and corporate matching gift she’s at aubrey. Why? Why that’s aubrey with two extra wise on the end thank you very much for loving non-profit radio aubrey, congratulations on being our listener of the week oh, i’m glad you’re with me i grow a gibbous if you backed me into the idea that you missed today’s show how we got here features of today’s charitable community emerged from clear points in history how did women come to outnumber men in the sector? Why is the northeast dominant? Dr robert penna returns to reveal the formation of our modern charity complex. His book is the non-profit outcomes, toolbox and new overtime rules. The u s department of labor has issued new rules for classifying which employees are eligible for overtime they’re effective. December first so you need to know what’s up, who’s got your back. Jean takagi are legal contributor and managing attorney of the non-profit and exempt organizations law group neo on tony’s take two fund-raising fundamentals round up. We’re sponsored by pursuant full service fund-raising data driven and technology enabled, you’ll raise more money pursuant dot com my pleasure to welcome dr robert penna back to the studio he’s, author of the book the non-profit outcomes toolbox first brought him to the non-profit radio studio in september two thousand eleven he’s been a consultant to charity navigator and has presented in canada, africa, the middle east, europe and australia. Nothing in the antarctic and oh, i see he grew up in the bronx, lives in wilmington, north carolina, and knows more about dc comics characters than an adult should admit you’ll find robert penna at outcomes toolbox. Dot com bob, welcome back to the show. Thank you for having me. It’s a pleasure. Pleasure. Thank you for hustle on your way to the studio today. The train was late. I understand, but you’re you’re not you’re not. You saved it non-profit outcomes. Toolbox. Last time you were here was five. Years ago, how’s the, uh, how’s the book doing it. Just come out when it’s been phenomenal. Yeah, it was that just released two thousand eleven. It was released in two thousand. Okay? Yes, it was sixty days before i was here. It’s it’s got me all over the world. The response has been incredible. Not antarctica, but not an article. I think the the penguins and the puffins and particular interest serious in the performance. But the good news is that word has been spreading that there’s nothing else like it out there for non-profits they want to learn howto tio be performance based on dh really start working on outcomes. And it’s got me all around the world. Places i never, ever thought i’d get to see. Saudi arabia and nairobi australia’s been phenomenal. Outstanding. So international organizations are interested in outcomes measurement as well out the united states actually is the leading non-profit sector in the world. Everybody hopes to see what we’re doing. Eso when non-profits started looking outcomes here non-profits in other parts of the world started looking as well. And so i got invitations and there i was. Excellent. Love it. Okay, i’m glad. He’s doing well, i’m i’m i’m even happier than you are. Not literally. The checks are pouring in. Finally, the first one. All right, the first one takes five years. Depends on how big your euro your advances. Jeff, work off the eye. I see. All right, but i finally did. Okay, i don’t want to get details about your personal finance is all right. Just get a a short subject. You know, we have to film. Remember, you have to be together twenty five minutes to fill twenty. We’re going to because we’re going to talk about the history of the charitable sector, which is a part of a new book, part of a new book that you’re working so and so exposes to what the new book is not out yet. Yeah, what’s that going to be about the new book is basically a donor’s guide. It really is basically what you should know about the sector every year we individual americans give billions of dollars. Last year was two hundred seventy eight billion dollars from us, and most of us know nothing about the sector. And so i am, depending upon the metaphor you choose, i’m either. Lifting the curtain or lifting the fig leaf and we all know what usually has been so all right. Ah, fig leaf, i, for that matter for all right. Okay, so when is that? You have a big fat advance that you’re working on now? Yeah, yeah, i’m working on a big fed events. I really can’t tell you because the book is i’m trying to do very, very thorough job. There’s an awful lot that we’re going to talk about today is just some of it today, when we talk about the history part, right, this is not it’s, not a history. Mode is not understanding. This is one chapter isn’t right, you know, one piece. Okay, so all right. So let’s, uh, still into it. Okay, let’s, go back, tio, old england. Oh thing. Which is where our charitable sector started with with queen elizabeth the first what was going on under her fig leaf? Oh, don’t do that to me! Latto charity, as we think of it, was, was vastly different back then. It was it was virtually all individual. But it was not really designed to help the poor. The old christian idea was that by the act of being charitable, the person who was being charitable got some sort of divine grace e-giving charity had nothing to do with ameliorating poverty or helping the poor. It was i’m doing this so i will get good graces. Most of the poor laws had to do with trying to corral and chase the poor from place to place to place. But they were also the divergence of opinion as to really what was charity. And so what elizabeth did was she did a there was an actor. Royal acted in sixty no one. The the charitable uses act and what she did in one fell swoop was she secularized charity. Because in addition to the usual type things poor, the needy, the infirm, the agent she now included as perfectly valid charitable uses things like building roads, building bridges, building causeways, supporting the troops. If you donated money to to to raising an army that was considered charity, the things that you might consider to be almost social engineering a fund for the marriage of poor maiden’s. Because in those days you needed a dowry. If you had no dari your chance of being married, we’re even lower. So this was a fund for the dowry of a poor maiden so they could get married. There was ah, charity was seen to be also thie encouragement and support of young learning artisans and artists and things of this nature. So what she did at that point was expand the concept of charity beyond the usual idea of helping an individual or helping individuals, and more towards what you and i would consider efforts of public benefit public good. And that strain has never left us. Okay. And also similar mints of social engineering. Yes. Helping see the women get married? Yes. You said you said moving the poor around moving the paralysis is moving the poor round. That is the poor laws we don’t talk about. That was that was not very nice. That was not there was rather know thiss was. This was in terms of helping young artisans helping argast supporting them, supporting young young academics. All of these. Were included in the list had never been thought of his charity before they’re they’re after yes, okay, as part of explains, it can just finish white today you can have the opera, you can have a bird sanctuary and you could have a battered women’s shelter all considered charities because going back to elizabeth, all of these sexual things became part of chuck, and now we have just a minute before break, we brought this concept over with us. Well, the puritans i shared i’m in italian, so i didn’t bring it over. We brought something else over, but, um, puritans brought these concepts with them. Yes, it is, yes, but they also brought some. They also had some very, very important individual ideas of their own. I’m not quite sure if you’re trying to go into it right now, but i could go over just over the top number one. It was every person’s responsibility to take care of his neighbor. That was your duty to god, and that was your duty to the king arika secondly, very, very important thing, the puritans, unlike anyone else who came to north america, had the sense that they could use the law to enforce changes in attitude and behavior so if we’re talking about moral standards and we’re not talking about that shot, not till we’re talking about ideas towards social behavior, their idea of a city on the hill, their idea of the new jerusalem, they were going to create a better society, and if you wanted to live there, you had a full flowing line one hundred percent we always see these pictures of them wearing dark clothes that said, all of this was enforced by law, we can get back to it after the broker. All right, well, we’re going to move on from the puritans, actually, because i want to start talking about some of our features of charity today we only have twenty five minutes and, uh, okay, so we’re going to look a tw. What? What characterizes charity today and how that how we got here? That’s what it’s all about let’s, 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. Oppcoll welcome back to big non-profit ideas for the other ninety five percent. This is our two hundred ninety fifth show. The three hundredth show is coming up on july twenty ninth. That’s the sixth anniversary of non-profit radio july twenty ninth. Very special show for you with us. Okay, bob. So the so i want to look at some features of charity’s today. Like on this has relationship to the puritans the northeast. So is sort of the first explain. How is it that way characterized the northeast as being dominant in charity philanthropy? It’s, not the northeast is nominated ways going culture is what you have to go again. I hate to do this. You have to go back to pilgrim’s idea of creating a better society. The pilgrim’s. This was their fat. One of the founding ideas you and i chatted briefly before about the split between charity and philanthropy. Weight of these two split well, one of the things that happen is that when philanthropy started developing that that protestant strain of creating a better society informed what they were doing and that has never changed. Most people would think would agree today that in terms of its humanistic goals in terms of the kinds of things that embraces that, more or less, the non-profit sector truly has sort of a liberal caste or a liberal bent by no means to be political. But in terms of things that it embraces. Those all go back to creating that better society that started with the pilgrims and through the eighteen hundreds through the organized benevolence that they spread, this stuff was not down south dahna south at a totally different kind of culture. This all came from the north east. When you look at the non profit sector today you’re looking at the direct descendants of the of the organized beneficence off the northeast going back to the eighteen hundreds. Okay, and today we see that way see just concentrations of charities in the northeast. But you but you always did a cz early as eighteen. Twenty. There were over two thousand of these voluntary associations in doing a little, vastly outstripping the numbers. Any places? Yeah, americans have a have a penchant for tokyo breeding association doesn’t talk to us. You have a quote in the chapter from the total talks about that and he says anyplace. In in europe, will you see a great man at the head of some endeavor, or in france, the government in the united states? You will find an association and that the world that in eighteen thirty? Yeah, and the association’s became associations are non-profit non-profit we’ll talk about how we got there, through laws and recognition and etcetera. Okay, all right, what about women will be very interesting sixty percent of the employees in non-profits air women do i have that rough? If you pray it’s probably more than that, and several women, when they’re friends of mine, would point out that ah, shameful number of directors are actually women, particularly with not latto yeah, with larger number i mean that’s. The staffs are overwhelming when i when i speak in front of groups of very often, there’ll be a hundred people in the room and they’ll be like four males. Honestly, that’s normal where this start this actually was in the early decades of the eighteen, eighteen, twenty just again thinking about this society due to the social mores of the day, women were not allowed to do it in twenty there weren’t even voting well, they weren’t voting they weren’t working. Certainly the middle class and upper class when we’re not working, however, this was a victorian era that had this notion that women were more sensitive, that women had a more perceiving i was also something very, very important going on male world. And that was the beginning of what we call today. Contract theory. It changed. Changed working relationships. I created the world we think of in terms of dickens. What means? Contract theory. Contract theory was its. We write it down. I owe you nothing past what’s in the contract. And if i fire you, i don’t owe you anything. It changed working relationships throughout europe and it hit the united states, the northeast, particularly the east coast. Particularly in the very late seventeen hundreds. Early eighteen hundreds it began to change the relationships amongst people amongst neighbors amongst the merchants and the people with whom we do business. Life got very, very sharp, hard angled and different. Almost a cruel is supposed to have had been women. Women started to see in ways that men refused to recognise the downside off of this, you know, hyper capitalism on the crass commercial world every other evan who was close to them. But this was not. They started pushing for a cz earliest seventeen. Ninety five women were behind the idea of pushing for penal reform. I had a list here i think i could have looked at but every they were against war, they were getting against press gangs. They were against dueling there against inebriation. They were against the abandonment of children. One thing that was a big issue throughout the eighteen hundreds was women being, shall we say, would seduced and abandoned. There were numerous groups, but if you look back as early seventeen, ninety five was the first formal women’s association for social betterment. Again, i have the name somewhere. My notes here. Wait, we don’t even know so we don’t need the name. But the point is it goes back to seventeen, ninety five. Yeah. And by the early decades of the eighteen hundred eighteen ten, eighteen twenties, this movement was almost entirely driven by women of the association’s thes associate these associations that were geared toward social betterment. Now yes, there were associations. There were associations of fishermen there with grange, as they were. Those were not female dominated. But those warm or those worm or industry related those one male dominated because they had to do with the trades. Okay, trades right? Because the men were but doing use the work this think about abila first of abolition. Where was the capital of abila? Abolition? It was boston. It certainly wasn’t down south. And yes, there was a gentleman whose name escapes me. Who ran the paper. But most of his field troops. The shock troops were women. Abolition, suffrage, suffrage, temperature tendered. Yes. Take carrie nation. Yeah. Thes wall women driven and there’s. Many, many, many more. Particularly when it gets around the, uh, child welfare and abandoned women. Orphans, widows. Ah, help the prisoners. All right. Reform price. You mentioned a prostitute. Refund forms pressure not only help for prisoners, but penal reform, penal reform. They recognized the cruelty of the institution. Well, actually, you know, they thought the institutions are better than what preceded it, which included the pillory that stock in public whipping and branding. And so they thought the penitentiary is we’re better than that. And so they were pushing initially for jails rather than bilich stop whipping and brand. Okay, that should have his peanut that’s that is penal reform is compared to what had been okay. Yes, all right, i thought so. They didn’t. They didn’t move out of the prison system or no, they were trying to prove that they were trying to get to a person to person comes whipping, etcetera, whipping, branding, and all right, so it’s ours and feathers. So there was so it really emanated from the with women recognizing the softer side of of life actually know. And there were a diversion and performing over contract the capital prize, the emergent males perception that they had a softer side. They were very shrewd. They knew what they were doing. It was this was not they were soft, and they had these these flowery ideas that just happened to work. They knew exactly what they were doing. But the thing was that the male population stepped aside because it deferred to what it saw. Women’s keener insights in other words, they weren’t playing, that they might have been playing the gender card. But they did very, very, very intelligently. They got what they want. They had their male allies when it came to having people write checks deeply. Clinton for mayor of new york. He was the mayor of new york and the head of one of the biggest societies of social improvement societies in the city at the same time. But it was all being run by these with women, sisters and daughters of the ruling male elite and let’s. See, what they did was they used the ruling male lead to get money for the rest of the men had it? Yeah. Okay. See, i think that’s cool. I get hysterical. All right. Anything you want to say about women, how they emerged as dominant. Well as as the century jin is very, very interesting. Because dominant in numbers, i should say, i mean, there are yes. There are a good number of women, ceos, executive actors, but a very small proportion of of the one, point, one million charities. So what are led by women? What is very, very interesting is the way they kept running and having the kipping resurgent. There was a move towards the early twentieth century which would have replaced a lot of them with male managers who was thought to be much more scientific. But when the sector got basically got into trouble and ones saying that trump latto did anything wrong. But it suddenly found it’s ah it’s, ah, its raison de tre questioned not to mention its sources of funding. It was the women who came back and were able to answer the need when the sector moved to the middle class as its salvation. And this was after the war. This was an era when the non-profits hadn’t what we call non-profits today they were called that, then they really know had no idea what they were going to do it, a lot of them there weren’t that many of them, but they were starving. They were drawing upon the vine, and they didn’t know really what to do with themselves. And it was literally women who saved them by virtue of thinking in terms of things like family counseling and marriage campuses around. This is nineteen forty, nineteen late nineteen forties nineteen fifties. Okay? And we’re seeing so so i guess another another area that i want to cover is services to the middle class. Yes, and it it emerged around the new deal when new deal legislation sort of the new deal captured the poor away from the association, the new deal people think in terms of the new deal is a couple of things i think of the w p a they think of the ccc they think of high was being built in things like this, but they they didn’t offer a lot more because they weren’t not just laborers and construction people that were out of work. They were thinkers, they were, they were artists, there were musicians, and so under some of the new deal programs, an awful lot of these people were hired and they provided services they provided thing, for example, there was one course really interested me how to how to teach people to think critically, and so they were offering this ah, for free public expense. But what was very interesting is that when after the war, the the public, particularly the middle class, liked a lot of these services also think about it in the earlier days, you really couldn’t talk about marital problems that was very probably right, but you sure as heck couldn’t talk about sexual problems. You really couldn’t talk about having problems rear your young because in the earlier days it was but it’s supposed to be the male had a strong hand. Spare the rod, not the child, you know. Spare the rod, spoil the child, etcetera. It was only after the war that these things became started become things people could talk about. It was the salvation in many cases of a lot of these these non-profit agencies, because what they started doing was providing specifically these kinds of surfaces to the middle class. Interesting enough. One of the rationales was the middle class could pay for it, at least in part it didn’t have to all be free. You have to understand that a lot of the agencies that you think of now things like community chest, they really and truly number one wanted to get get away from relief. The experience of of the depression and the new deal when they’ve been pushed out of relief and forced to find other ways to survive. You had really gotten them to the point where they did not want to be back in the release in really space, which was really seen as a descendant of charity. They were much more comfortable in the benevolence, the philanthropy, the betterment of society kinds of kinds of efforts. And they said that on the brothers, all right, rather than charity. So we talked about that before the division between charity. We didn’t get into detail we’re going through, but this is where they were much more comfortable, and that led them directly in the path to be ready for when eventually came along. Great society. It’s such like that. Okay, now, is this the beginning of the divergence between charity and philanthropy? Now, at the beginning of the divergence is actually in the eighteen hundreds. Okay, what was the history of that? The history of that was life was we’re looking back, we think we have this picture of this very bucolic america, if you know, from the colonial era, most people don’t even realize all the things that happens. Say, from eighteen hundred eighteen forty we sort of jumped from george washington to the civil war, but an awful lot happening, like you’d be in the wilderness if you went to fill it beyond philadelphia. That was true, but it off. A lot of things was happening, and one of the things that was happening was that cities were growing new york city was growing exponentially. You had a lot of immigrant groups coming in you had but also think about the older areas of new england, massachusetts, et cetera. These have been farmed out that was there have a great soil to begin with. The ohio valley was opening. People were moving the tightness of the you know, we all have this kind of notion of ah, sturbridge village and the cute little yeah that existed at one point. But by the time eighteen hundred rolled around, ah, lot of that was changing. So that whole idea of direct community responsibility for charity was breaking down. Secondly, when you got to the cities, the city’s had anonymity and that alone attracted a lot of people. There was the structures that had created charity before, on allowed upon which charity had been based before. We’re breaking down tremendously. Number one, number two. The numbers were increasing. And the idea was that charity was a waste. It was a waste of time. Charity comes from the latin word careerist, which means tenderness, mercy and love. Philantech becomes from the greek, which means love of mankind as early as seventeen o four. It was recognized as a term meaning somebody who was interested in the public good in public works in public benefit. All right, they started looking not to help tony or bob because we had problems, but rather while the but problems that tony and bob facing exist nowhere when did this thinking this thinking started by eight by eighteen ten by eighteen. Twenty early very, very early. It was also seen as much more organized and much more scientific. All right, where is that? We can help? We can help the masses rather than one person at a time. They were we could get to the cause is exactly what they were looking to do. Was copy that. Go back to securing that center. I want to go back to the puritans, create a better society. Why do we have poverty? All right now their answer in many cases was very still to their answers. Was if only the pool without more like us. All right, that is. But that is true. Very helpful. No, it isn’t very helpful. But it was awful long for roughing long time. That was the answer they had was the whole period. Called the friendly visitors who went into places don’t like fight like five points, and basically the message is, if only you would be more like us. However, even though they were misfiring because they didn’t have the knowledge we have today, they didn’t have the theory today certainly didn’t have computers where they could crunch numbers. Their idea was this benevolence. The idea was they were trying to change society, not necessarily help people. So that was the division between charity, which has always been direct and specifically focused on individual family and philanthropy, which is always had much broader goals and has always been much more abstract. But that that split literally tony goes back to the early decades of the eighteen hundreds. Well, okay, cool. Um, let’s move forward a little bit, tio. Some of the recognition in the in the tax laws. That’s, that’s. Really? Not really about really, like two minutes left. So you’ll have to go through this little quickly charity’s. Well, first. Well, there was first non-profit status was like nineteen. Nineteen o nine. Okay, let’s, let’s, go back. We only have about a minute and a half. Now then let me do. The talking like men and they haven’t finished. Ah, before the before the turn of the last century, almost all taxes were levied by states churches had never been. Churches have never been taxed. It started with churches, property belonging, the church’s libraries. But all of this state law it was not until eighteen, ninety five something in that area when the federal government first mentioned not the charitable organizations that in caldnear non-profits charitable organizations, they were exempted. Then later it was codified that they had to be non-profit it was charitable organization first then non-profit what we think of today with the whole tax loss set up with the five o one sees that did not happen until nineteen. Fifty four and they were not in those days twenty nine categories of five a onesie. But just let again your listeners understand what we have today in terms of the tax exemptions. Number one this goes back centuries number two it’s started with the state’s number three. It became the law of the land when the feds put it in around red, around world war on dh that actually the exemption, the personal exemption for giving it inevitably goes back to the world will want here. Okay, so again, everything we see today, tony has roots a long time ago and that’s the overall theme of this particular part of the book. They’re working outstanding. We look forward to the book when it when it comes out, we’ll talk more. I’ll be back. Okay? Sounds like charity navigator between, uh, on the bookshelf. Dr robert pennant. You’ll find him at outcomes. Toolbox. Dotcom thank you again, bob. Thank you for having me. Future of e mail is coming up. No future females not coming. Who writes this copy? New overtime rules with jean takagi is coming up. All right, what i need you’ve heard me say this before. I need an intern. So i have somebody to blame for this crappy copy. So if you have, if you are interested being an intern, i don’t know. Or if you have a son or daughter andi, you don’t mind them being blamed for my mistakes. Sammy. Sammy the resume. Tony at tony martignetti dot com new overtime rules with jean takagi that’s what’s coming up first, pursuing there’s an opportunity for you to join a groundbreaking panel to raise the bar for us fund-raising pursuant is partnered with rogue hair, which is a fund-raising think tank in england. Dr adrian sergeant was a guest. Oh, maybe four, five, six weeks ago, roughly from from rogue hair to bring this. This joint venture is to bring what’s called critical fund-raising to the u s and they are recruiting a panel of pro fundraisers to make sure that new ideas come out of rogue ares research like the relationship fund-raising study that dr sergeant and i talked about was the march there was a march eighteenth show, so it was more than six weeks ago, march eighteenth so they want to put this you know this this thought into practice and that’s why they are recruiting a panel and also help the two companies identify while one’s accompany one’s a think tank let’s be precise. Now identify gaps in fund-raising knowledge so that rogue air can research them and fill them in. And, you know, i keep saying no, gary, i don’t know if it’s rogue array that’s the latin that it comes from, which is to ask, i don’t know if i don’t know if over there they’re pronouncing it. Rogue air or rogue ira, but any case they’re they’re partnered with pursuing. You can join the panel. The deadline to apply to be a panel member is july first. So you still have about a week. Go to tony dot, m a slash pursuant rogue air r o g a r e and you have to put a capital p and you have to put a capital r, because that’s, the way bentley works. So tony dot m a slash pursuant rogue hair and get your application in before july first. Hopefully you will be on the panel and improve fund-raising practice in the us. That’s the whole purpose of this now tony steak too fund-raising fundamentals it’s the podcast that i produce for the chronicle of philanthropy but doing this for three or four years you know that part i put together a round up of shows that are excellent that i think deserve your attention. There’s one on donor empathy called put yourself in your donorsearch news ideas for giving tuesday there’s ideas for boosting your plan e-giving and there’s more now this is a short form fund-raising fundamentals. Only each one was about ten minutes, so i could never squeeze dr penner into fund-raising fundamentals. It wouldn’t work. Um, he’s still here. So he i’m not saying anything behind his back. Um, anyway, i did a round up the video and the links to the to those short episodes of fund-raising fundamentals are at tony martignetti dot com. And that is tony’s take two. Jean takagi. I know he’s on the phone and you know who he is. He is the managing attorney at neo non-profit and exempt organizations. Law group he’s, our monthly legal contributor times. Many, many years he edits the popular blogger at non-profit law blogged dot com. And on twitter, he is at gi tak gt a k welcome back, jane takagi. Thanks, tony. Happy summer school. Happy somebody. You do? It’s a sweltering one here in in here, in washington. I almost said new york city’s the mid eighties what’s it like in san francisco. It’s actually a pretty comfortable, like, seventy two out here. No big deal. All right, san francisco’s. Always bragging about their weather. You always boasting about that? Not in juno. You have june gloom you had. Did you have fog earlier today, june gloom we’ve had some june gloom way we’re headed towards july and the sweet whether or not yeah, well, we’ll worry about that. All right? Another time, all right, overtime rules, overtime rules have changed, gene, and it take a takes effect december first, so there’s still time to plan, but this has some serious implications for non-profits it does, and i think most of us are sort of generally aware of overtime rule that enough if you’ve had hourly jobs before, like i have tony, but, you know, we sort of get used to that idea of if we work more than forty hours per week is a narrowly employees were entitled to overtime time and a half, so i remember being an hourly workers that was actually sometimes a great thing to have to have that extra income, no, but i think what’s less known is that even if you’re paid a salary and so let’s say you’re paid, you know, thirty thousand dollars per year or something and not on an hourly basis, you might still have the time. The right tio overtime if you work more than forty hours per week that sometimes little known and little understood both. By employees and employers and generally the way people think is that salaried employees if you get a salary and not an hourly wage, you’re kind of in that category of exempt employees, which are those who are exempt from the overtime pay right, but not all right. And so that the most common forms of exemption are referred to as the white-collar exemptions. I mean, those are the executives who are, you know, usually managers managing two or more employees. Um, the professionals who are like, you know, teachers, lawyers and doctors. And usually it requires a degree and some sort of certificate, our license and the administrative imp ploys that are performing office and non manual work that’s directly related to management or business operations. So those are the typical salaried exceptions, the white-collar exemptions from from overtime. Okay, let’s, let’s acquaint listeners were, uh, and me with what what’s what’s changed. What’s the that’s not bury the headline what is new about overtime? So what is new is those white-collar exemptions were subject to a minimum amount. So even if he falls under the definitions of executive, professional or administrative straight of professional if you were making less than twenty three thousand six hundred sixty dollars, which is currently the threshold. You were entitled to get overtime if you work more than forty hours. So that’s what little known if you made less than twenty three thousand six hundred sixty dollars, you were entitled to overtime even if you were a salary. Now the law that’s changing says that minimum threshold is going up by more than double, so the new threshold is going to be forty seven thousand four hundred seventy six. So more than forty seven thousand where the old threshold, which will apply until december first, is only twenty, twenty three, twenty three so many more people now eligible for overtime pay, right? So basically, everybody who was salary between twenty three thousand six, sixty and forty seven thousand four hundred seventy six are entitled. Teo will be entitled to overtime pay time and a half based on their salary starting december first. And how do you calculate? What is the hourly rate? You just you just divide the weekly salary by forty? Yeah, i think you’re just going to do on on a pro rata basis. You, khun divided by the number of hours that you work in a year for for for a worker and then that’s the hourly rate your time and times it by time and a half. Okay, now this applies to all employers, right? This is not just non-profits that are being hit, it applies not all employers, but non-profits don’t have a special knows i’m from there. Okay, no special exclusion for non-profits and it comes from the us department of labor, right, not california law. Now this is not right for once it’s, not california, but people should know that they need to look at the state laws because the state laws sometimes might be even more strict than the federal laws. In some ways, that could be more difficult for employers, and in some ways, this increase will be much, much less for for state law. Under under state law in california, for example, are current minimum for exempt employees is forty one thousand, so that jumped to forty seven thousand isn’t so big. The federal level is jumping from twenty three thousand forty seven thousand much much hyre increase affecting many, many more employers and employees. Are there any states going above the forty? Seven, four. Seventy six and none that i know of. Okay? No. None being more generous. All right. Right. But i understand important. You do need to check your own state law. Yeah, and california will will probably be over that that amount in a few years as they’re targeting a fifteen dollars, minimum salary, hourly rate and the example categories will go up with that over a number of years. All right. You said no special exemption for non-profits, but some non-profits are accepted. No, no, no umbrella exemption for non-profits. But there are some excepted non-profit categories. Yeah, so not non-profits so generally you khun get you can fall under the coverage in three ways, and one way is just by operation of state law. So i’m going to leave that out for now, because the states will all differ on that. But the two other main ways to get covered is one if the non-profit is considered a covered, enter surprise. So a little bit of jargon there, but generally that means one of two things. One is that they’re one of these named enterprises. So if it’s a hospital or an organization that takes care of older adults or people with disabilities who reside on on the organisation’s premises or schools for children who are mentally or physically disabled or gifted preschools, elementary school secondary schools and in colleges and universities all covered so all their employees air covered as well the other type of non-profit but that would be great, but i need to understand something covered means they’re they’re subject to this rule, or they are not right. They’re subject to the new to the new law, right? So, employees, uh, all of those named enterprises are going to be subject to those those new rules in the new threshold for overtime. Okay, so those are categories named enterprises. All right, so you still might be outside the named enterprises? Absolutely. Okay, most non-profit they’re probably not just in the strict categories hospitals and schools. So the other way you get covered is if you have ordinary commercial activities that result in sales or business done of at least five hundred thousand dollars. Bonem so that the church here is its commercial activity, so they’re not talking about donations, and they’re not talking about income that’s directly related to furthering your charitable purpose, they’re talking about commercial activities that they’re more like unrelated business activities. So if you’ve got that type of commercial activity and i should say that commercial activity and unrelated business activity under the tax code with unrelated business income tax, they’re defined slightly differently. So i’ll just say this is more broader. So if it’s a commercial type activity that’s being done for-profit and you’re you’re intending, tio, i run a business to generate income for the non-profit no matter where the profits go, you’re just running a real business, and if it’s you’re making at least five hundred thousand dollars on it, then you may be a covered enterprise, and then all of these the new thresholds for for the overtime are going apply to your organization socially. So still a lot of charitable organizations that are not covered yet, but well, based on what we’re going through because you’re right, you have the named enterprise. Is the covered enterprises the named ones? Yeah, half a million dollars threshold in commercial activity. If you’re over that in commercial activity, then this these new rules apply to you, but okay, we’re still talking about a lot of charities that are not going to be impacted? Not yet. Okay, what’s your other category. All right, so any non-profit who has employees who are engaged in interstate commerce so that business transactions basically between or amongst different states and including whether you’re on on the phone or whether you’re doing business not on a very, very rare basis, but somewhat regularly interacting with folks or businesses or other organizations across state lines that does that include fund-raising activity? Yeah, that could that could. Well, this is a close one having this’s not not not going to just be donations there so it’s beyond just simple fund-raising it’s beyond okay, now i’m gonna i’m sort of putting you on the spot, so if you can’t say definitively, you know, of course, you know, use your usual loyally skills toe qualify, but this is going to be the biggest one that would potentially potentially that’s why i’m asking the question sweet lots of non-profits in if you’re if i’m a california charity and i’m making calls to nevada for fund-raising or sending e mails or any of these other things that our solicitations that you and i have talked about when you get into that whole charity solicitation registration realm, if you’re doing these things across state lines, is that the kind of activity that you’re talking about? Yeah, if you do it on a fairly regular basis, that could be activity that that we’re talking about. That’s, a book category, if you’re looking for donated items that are going to cross state state state lines, that maybe what we’re talking about, a swell. So any movement of persons or things including donated goods across state lines, that’s going to trigger and just the employees who are engaged in that activity that doesn’t cover all of the non-profits employees it’s just the employees that are engaged in that particular activity. Okay, so most likely this is going to be your fund-raising team, if you’re going across state lines and, you know, depending how big you are, you might have ah, corporate sponsorship team that just just does that sabat crowd funding is going to be implicated, right? Yeah could be we’re not really sure crowdfunding is so so new and not really caught into how the rest of the laws are our thinking about interstate commerce, and i don’t exactly know how that will. Work, especially with different intermediaries that that help out in the crowd funding. Provoc okay, yes, the intern, yes, those platforms as well. All right, gene let’s. So let’s, go out for a break. When we come back. Of course, we’ll keep talking about this, and you know, you have some ideas for what non-profits need to do and also coming up. Live listener, love, stay with us. Like what you’re hearing a non-profit radio tony’s got more on youtube, you’ll find clips from a standup comedy, tv spots and exclusive interviews catch guests like seth gordon, craig newmark, the founder of craigslist marquis of eco enterprises, charles best from donors choose dot org’s aria finger do something that worked and they only levine from new york universities heimans center on philantech tony tweets to, he finds the best content from the most knowledgeable, interesting people in and around non-profits to share on his stream. If you have valuable info, he wants to re tweet you during the show. You can join the conversation on twitter using hashtag non-profit radio twitter is an easy way to reach tony he’s at tony martignetti narasimhan t i g e n e t t i remember there’s a g before the end he hosts a podcast for the chronicle of philanthropy fund-raising fundamentals is a short monthly show devoted to getting over your fund-raising hartals just like non-profit radio, toni talks to leading thinkers, experts and cool people with great ideas. As one fan said, tony picks their brains and i don’t have to leave my office fund-raising fundamentals was recently dubbed the most helpful non-profit podcast you have ever heard, you can also join the conversation on facebook, where you can ask questions before or after the show. The guests were there, too. Get insider show alerts by email, tony tells you who’s on each week and always includes link so that you can contact guests directly. To sign up, visit the facebook page for tony martignetti dot com. I’m jonah helper, author of date your donors. And you’re listening to tony martignetti non-profit radio. Big non-profit ideas for the other ninety five percent. Welcome back live listener love as promised! Oh my goodness, we’re gushing! San jose, california, stamford, connecticut, south bound brook, new jersey lovett welcome, south bound brook, morristown, new jersey live listener loved to you, boston, mass talking all about new england today with with with bob penna, rockford, illinois live listener love, i think that’s so that most of the domestic up st louis, missouri it was early early on live listen love, so grateful to have ah, that many live listeners love goes out to you. Of course we got to go abroad. I would be remiss if we don’t i have to do it. Tokyo, japan three three different listeners in japan in tokyo, specifically konnichi wa. We have three, listeners in seoul, south korea, anya haserot lot of times we can’t see had just how many? We just know it’s multiple, but, uh, you see three today and also multiple from tehran, iran welcome live listener loved to tehran three listeners, they’re also love it love it, my voice cracked little bit malaysia, we can’t see your city i’m sorry, but we know you’re with us live listen love to you and we got any other let’s see? Oh, yeah, of course. Hustle be sweden. Welcome live listen, love in noble park, australia live listener loved to you also, i believe that is all the yes. If we didn’t shut you out, then i’m sorry, but live love love to the live listeners. Absolutely. Podcast pleasantries. You know how many you are? Well, over ten thousands of you listening, whatever it is you’re doing. You know, i get tired of me in nouma rating the activities that i’ve heard. So just simple pleasantries to the over ten thousand podcast listeners, the vast majority of our audience and they affiliate affections. Got to send that out to our am and fm listeners throughout the country. Our affiliate stations. Let your station know that you listen. You listen to non-profit radio. They would love that feedback. I would be grateful. Thank you very much. Am and fm affiliate listeners. Jean takagi. Thank you for that indulgence. Thank you for being on the phone with me while i, uh well, i think all our listeners it’s important, important it’s. So impressive in an international scope of your listeners. It is it’s cool. Did you know? I don’t know if you were listening earlier today. Did you catch our listener of the week at the top of the show? The executive director of california symphony. I did not. I’m sorry i missed that’s. Okay, aubrey burghdoff hour. Do you don’t know? Do you patronize california symphony? I patronize symphonies in california. Ok, well, hopefully audrey’s. Not listening any longer. Okay, um, let’s. See? So we have ah, you know, we have our standard, like five minutes or so left. What? What are some things that non-profits should be looking at doing to make sure that they are in compliance come december first? Sure. So, first of all, make sure you check to see whether you’re covered or not. And the one broad categories i just refer to very offhandedly was coverage through state law. And note that there’s the national council of nonprofit says that in at least eleven states, including new york and new jersey, the federal rules will apply to virtually all employees and employers, including of non-profits. So watch your state law coverage as well. In addition to the different coverages we talked about, can you a gene? Can you name any of the other states in that eleven has, according to them, it was alaska, dc, illinois, maine, maryland, massachusetts, missouri, new jersey. In new york, they said north carolina and ohio ok, and, uh, the national association non-profits believes most of the non-profits most or all non-profits in those states will be covered by this subject to this bye operation of state law regulation or administrative ruling will automatically apply to virtually all employees and employers. Okay, thank you very much for that in nouma rations. All right, so you got to know if you’re if you’re subject to it, then what if you are? Well, then you’ve got to do a lot of planning, right? So if you’re going to be subject to it, then you gotta start managing and figuring out your budget and what’s so difficult about this is it starts in december, so not too many people are going to have a chance to react to this with their next year’s budget. They’re gonna have to figure out how this is going to impact. They’re this year’s budget um and so so then they’ll have to figure out what do we do? Are we going to do we regularly use over? Time first of all, on our employees covered on are we going tohave teo find different alternatives? Do we need to maybe hyre part time employees or spread out the work in a different manner? So we discourage? Oh, our lesson are need teo give overtime pay? Or do we provide pay raises that increased the worker’s salaries to the new threshold? So so we are sort of been sink overall on we don’t have to pay overtime if we can get them up to that new threshold, and if they’re very close to it, that might be a cost. So one of those is heartless and the other is altruistic, but if we start cutting workers, reducing them to part time that’s ah that’s bad for them. Oh, actually, what i was suggesting and, you know, there’s there’s good and bad to all of this, but when i was first, suggesting is hyre part time employees, new employees so your current employees don’t have toe work the overtime. Oh, hyre new employee. Okay, i was thinking, reducing current employees to part time and bringing on more. Yes, so what? What the critics they’re going to say, though, is that that may not happen, but what may happen is that with the increase costs that are going to result because of the additional overtime taste, some non-profits they’re goingto have to pay starting in december, they may just lay off workers or cut programs instead. That’s a scary thought has that i’m sure somebody has raised that. That doomsday scenario yeah, i mean, it’s interesting. I’m not sure how you feel about it, i’m you know, without having a chance to sort of really study it, but there were over two hundred thousand comments that were sent when the first proposed these regulations to the department of labor. Most of them were pretty negative, and a lot of those negative comments came from non-profits that we’re saying, you know, first of all, we had no chance to really react because the rules come in place so quickly by december, and we didn’t really account for different geographic, you know, cost of living issues. So, you know, making you know that amount forty seven thousand in new york is probably one thing or san francisco and making it in oklahoma city or somewhere else, maybe very, very different. So there’s some really good criticisms about it and some difficulties, some non-profits especially in those rural areas that are going to have to face, on the other hand, they’re people that say, you know, we shouldn’t be taking advantage of workers just because we’re a non profit organization and paying them at a rate that’s below poverty level for a family of four. And that was the reason why the administration had justified that shift has not been changed since two thousand for so where twenty three thousand is below the poverty level. Yeah, family. In fact, i think the twenty three thousand is well below poverty level for a family of four serving one person making the income from that family okay? And where does the new forty six or forty seven and where’s that in respect to the poverty level, do you know what this is? How they defined it’s? I’m not exactly sure how they compare it exactly to where the poverty level is defined, but they say it represents the fortieth percentile of earnings the forty forty out of one hundred forty percent of that’s not very a fulltime salaried workers in the lowest wage census region, which is the south so forty percent out of full time salaried workers, that’s forty seven thousand in a place where the cost of living is lower, right is the lowest and okay in south. Okay. All right, well, you got to take these things, maybe incrementally, but it definitely, you know, it’s yeah. I mean, it has budget impact. And, you know, i’m not surprised that a lot of the comments from non-profits were negative. This this is gonna cost. Yeah, it’s definitely going to cost and it’s going to hurt some people in services, you know, maybe the counter is sometimes you’re gonna have to take some steps back is on on an organizational level. So on a national or or broader level, we’re moving forward. All right, gene, we’re gonna leave it there. I want to thank you very much. Thank you so much, tony. My pleasure. As always, jean takagi, you’ll find him at non-profit law block, dot com and also at g tak next week. Purpose driven branding and the new guide star platinum. If you missed any part of today’s show, i beseech you, find it on tony martignetti dot com. We’re sponsored by pursuant. Online tools for small and midsize non-profits data driven and technology enabled pursuant dot com. Remember to check out the three hundredth show. Hope you’re gonna be with us july twenty ninth. You could play the music, sam, go ahead, don’t be shy. July twenty ninth, thirty three hundred show, sixth anniversary. Our creative producers, claire meyerhoff. Sam lee broots is the line producer. Gavin dollars are am and fm outreach director shows social media is by susan chavez, and this music is by scott stein. Be with me next week for non-profit radio. Big non-profit ideas for the other ninety five percent. Go out and be great. What’s not to love about non-profit radio tony gets the best guests check this out from seth godin this’s the first revolution since tv nineteen fifty and henry ford nineteen twenty it’s the revolution of our lifetime here’s a smart, simple idea from craigslist founder craig newmark yeah insights, orn presentation or anything? 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