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Nonprofit Radio for July 24, 2020: Black Philanthropy Month & Collaborations: MOU To Merger

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Jacqueline Copeland & Valaida Fullwood: Black Philanthropy Month
BPM 2020, in August, examines how all forms of funding can advance the economic justice so essential for racial equity. My guests are BPM founder Jacqueline Copeland and co-architect Valaida Fullwood.

 

 

 

 

 

Gene Takagi: Collaborations: MOU To Merger

Gene Takagi

Gene Takagi is seeing more interest among nonprofits in exploring co-ventures of some sort. We talk through how to start that journey internally and externally, and what form your collaboration might take. He’s our legal contributor and principal of NEO, the Nonprofit & Exempt Organizations Law Group.

 

 

 

 

 

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[00:03:13.34] spk_0:
on Welcome tony-martignetti non profit radio big non profit ideas for the other 95% on your aptly named host. Oh, I’m glad you’re with me. Id. Bear the pain of familial, benign Pem Fergus If you got under my skin with the idea that you missed today’s show Black Philanthropy Month BPM 2020 in August examines how all forms of funding can advance the economic justice so essential to achieve racial equity. My guests are BPM founder Jackie Copeland and co architect Valetta Fulwood. Also, collaborations MoU to merger Jean Takagi is seeing more interest among nonprofits in exploring co ventures of some sort. We talked through how to start that journey internally and externally, and what form your collaboration might take. He’s our legal contributor and principle of neo. The non profit and exempt organizations Law group on Tony’s Take Two planned giving accelerator were sponsored by wegner-C.P.As, guiding you beyond the numbers wegner-C.P.As dot com by Cougar Mountain Software Denali Fund. Is there complete accounting solution made for non profits tony-dot-M.A.-slash-Pursuant Ger Mountain for a free 60 day trial and by turned to communications, PR and content for nonprofits, your story is their mission. Turn hyphen. Two dot ceo. Here is Black Philanthropy Month. It’s my pleasure now to welcome Jackie Copeland and violate a full would to the show. Uh, anthropologist Jackie Copeland is co founder of Pan African Women’s Philanthropy Network, a global association of African descent, and allied women leaders, donors and activists of all backgrounds. Idea Whisperer. Wait, no, there’s more to say about Jackie. Sorry about that. Jackie founded Black Philanthropy Month in 2011. She’s founder and CEO of the Wise Fund, promoting human rights through equitable funding and technology towards a just society and sustainable planet. It’s at the wise fund dot, or GE, and she’s at Jackie Be Copeland Idea Whisperer. Valetta Fulwood has a client base that ranges widely and her interests center on social innovation in philanthropy, education and the arts. She helps people and organisations Dr Bold ideas forward by guiding their projects and by writing their stories. She’s at Valetta dot com v a l a i d. A. And at Valetta F Jackie Vallejo Welcome. Welcome to non profit radio.

[00:03:16.23] spk_1:
Thanks me.

[00:03:19.78] spk_0:
Absolutely pleasure to have you, Jackie. Let’s start with you. You’re the founder of Black Philanthropy Month. What’s it all about?

[00:07:00.44] spk_1:
Well, um is inspired by all of the diverse people I’ve worked with from the U. S. African Americans, but also to black diaspora worldwide for 30 years. And it’s clear that people give and give abundantly, but often do not fully recognize the power and impact of their individual giving and don’t even necessarily see themselves as philanthropists. So it was specifically inspired in 2011 by a very diverse group of black women in Minneapolis. At the time, it had the most ethnically diverse black population in the country, and everyone was giving. There were ancient giving circles that were being replanted and adapted to the U. S. All kinds of social enterprises. And I became like the pro bono adviser, and I knew it would be powerful. Even I knew all these women, but they didn’t know each other. And at the time I was teaching philanthropy at the University of Minnesota, which hosted the formation of this this group Pan African Women’s Philanthropy Network that I started and based on that experience, I thought it would be helpful if there were actual month where we step back. Ah, as a global community and recognize are giving is import and how to do it better, better and more collaboratively so that we can have a greater influence on the social and economic and environmental challenges that face black people wherever they are on the planet. So that was the genesis of it. It was also inspired by the U. N. Had an international decade for people of African descent. Also recognizing that there were these common, this common threat of history in common challenges that require more visibility and social action. It became a decade recognizing, um, people of African descent. And so now the U. N has recognized black philanthropy mom as an important pillar in um, acknowledging a celebrating black culture globally and now third, I think 30 plus different government entities from cities, towns and states have recognized Flat Philanthropy Month, and I think we’ve counted 17 million or so people engaged so far. So it’s becoming a global movement, which is part of what I was hoping for. But Valetta will tell the story of how they she got involved, and there’s another woman who couldn’t make it today who I always want to acknowledge. Tracey Webb, who was a pioneer in her own right. She created the first black philanthropy blogger I’ll call Black Gives Back. And she also is the founder of a prominent giving circle called Bled Black Benefactors. And so that’s kind of the story that was me as founding it. And I, um, for three years was doing it, um, largely alone and with some of the women from Minnesota and inflate a in Tracy.

[00:07:06.43] spk_0:
Okay, a poignant that it’s founded in Minneapolis.

[00:07:10.94] spk_1:
Uh, yeah, for obviously genesis of our whole reasons. Yeah,

[00:07:15.70] spk_0:
Genesis of our old racial conversation. Now, after the murder of George Floyd in Minneapolis.

[00:07:35.28] spk_1:
Well, Minhas Minneapolis is a unique place where the best the greatest social challenges of America and some of our best opportunities are sort of concentrate it. And so, as I look back, is not surprising that this new phase of the global racial justice movement would have come out in Minneapolis

[00:07:45.24] spk_0:
before we turn to Valetta doing Do you know the the impact of the rough dollar amount of black philanthropy in recent in last year? 2018?

[00:08:27.37] spk_1:
Well, there haven’t been studies recently. Eso Most of us are citing data from 2000 and 14 and for about 20 years there’s been research on US black philanthropy, and all of it confirms that African Americans continue to give the highest proportion of their income to philanthropy, and that’s even in recessions and effect. Our philanthropy goes up in a recession.

[00:08:28.64] spk_0:
There are

[00:08:45.64] spk_1:
always communities. Philanthropy goes down in a recession, but for a lot of cultural reasons, and people don’t realize this is like a hardwired part of the culture is how you become grown and recognized as an adult you have causes

[00:08:48.07] spk_0:
does. It doesn’t

[00:08:48.90] spk_1:
start ever amount that you are giving to and supporting with your time, talent and treasure as part of being black.

[00:09:46.64] spk_0:
It’s time for a break wegner-C.P.As paycheck protection program. Loan forgiveness. I got a message from my bank that they have presentations on this, but they’re only for bank clients. That’s fine for me. But what if your lender doesn’t have resource? Is if they just send you a link to their form? Wegner has you covered their latest free wagon are explains the state of P P P loan forgiveness. What’s forgivable? What documentation do you need? How to work with your lender? Go to wegner-C.P.As dot com Click Resource is and recorded events now back to Black Philanthropy Month with Jackie Copeland and violate a full would. Does it start or did? It doesn’t have its roots, its roots in churches.

[00:10:02.24] spk_1:
It has his roots in churches, but in part because the church is such an important social institution in our multi century history in the US But if transcends churches, it is also a voluntary associations is wherever two or more black people are gathered, they figure out something to give

[00:10:21.99] spk_0:
to, however later. Lett’s bring you in. Um, if you wanna talk a little about the black philanthropy months. But then I also want to talk about the summit that kicks it off on on August 1st.

[00:12:44.77] spk_2:
Oh, yes, great. So I was there in 2011 in Minneapolis when Jackie convened the Pan African Women’s Philanthropy Summit and um was really elated when she announced August is Black Philanthropy Month, in part because at that same time, I had just finished on my manuscript for the book, giving back a tribute to generations of African American philanthropists, and the book was gonna be released in October. So this convening in August in Minneapolis was some timely and to be gathered with other black women from across the globe to learn and also to share about. My forthcoming book was, um, really It’s for inspirational and just great timing. So I continue to follow Jackie’s work with black philanthropy months as I rolled out the book and engaged in book talks around the country. And then in 2000 and 2013 I reached out to my friend Tracy Web, which Jackie Jackie mentioned earlier. And Tracy had a huge following with her Blawg like It’s back dot com and also was building a network through my work around the book and thought, Hey, you know, we can really amplify and magnify black philanthropy. It’s the three of US war to join forces and use our respective networks and collective networks. Teoh, you really take Black Follansbee months to another level. So I reached out to Jackie, pitched the idea, uh, which I thought was pretty awesome. But I really hope she might see the same. And she was gracious and oh, saying yes to women that she only knew slightly and, um, when we rolled out, let Philanthropy Month in a new way, particularly leaning on social media engagement and our connections there. It really did take off and go to a whole, another level nationally and globally, which gave us a glimpse into the possibilities. So ever since then, we’ve been working in collaboration.

[00:12:47.90] spk_0:
Was just saying, I’m looking forward. Next year’s your 10th anniversary,

[00:12:50.74] spk_2:
you got

[00:13:19.02] spk_1:
way. I believe it because let’s just say this has been a labor of love and our own pocketbooks, Okay, because, um, this is not, Let’s just say this is amount of money making enterprise, but it is just there so much challenge in our community. And a lot of the media only reports what’s wrong with us. And as a social scientists and activists, I committed myself focusing on what’s right with us. So look over a week, and that’s what philanthropy is. And I forgot to mention you ask, how much for African Americans is at least $12 billion a year? Okay. And some people count the Remittances of African immigrants

[00:13:40.02] spk_0:
right going

[00:14:08.64] spk_1:
because a good portion of those gold to build schools and for healthcare scholarships, and so that’s $11 billion. Just so we’re talking about just the us $23 billion nobody has a true global number. That would be a great research project. I’m working on a proposal for it. I hope somebody funds it because you really do need to know globally, how much by country and then on aggregate global level is black black giving

[00:14:14.74] spk_0:
later. How about the summit that kicks off Philanthropy Month, August 1st black giving and beyond Virtual summit? Tell us,

[00:14:23.48] spk_2:
Yeah, we’re thrilled about it. It was Jackie’s brainchild that she shared with me and Tracy, I think, late last year, and we’ve been building on it again. It was before the pandemic before the outcries against racial injustice, but it seems right on time. So the idea is to host a global virtual convening on a high tech event platform that invites participation from all across the world. And we have, ah, really stellar lineup of speakers and Panelists, and discussions will focus on how we can aggregate funding and resource is in capital to help in the recovery and rebuilding of black communities. In the wake of these twin pandemics. As Jackie often says, any black racism and Corona virus

[00:15:21.78] spk_0:
info info on all this is that black philanthropy month dot com, right?

[00:17:06.79] spk_1:
Yes. Please. Thank you. We want to commercial. We want people to people to go to black philanthropy month dot com Learn about this summit and register and under build on what violator was saying We’re trying very. We missed being able to come together in person. I mean, I think that is one of the most difficult aspects of this whole Corona virus period. So we’re trying our best to simulate a, um a real life in person conference environment with this platform there. Four days August 1st is to kick off with Soledad O Brien Bakari Sellers, Benjamin jealous and a activist on racism and technology named Joy Belluomini. Um and then all his fourth and fifth are in Africa. We have the Kim Daymo Trumbo as a keynote speaker, along with a very prominent philanthropist named I Show Mohammed or you’re both day. Ah, and then we are having on August 29th a women’s rally and that will be headlined by some of the top women leaders of philanthropy. Like most communities, black women do a lot of the heavy lifting for giving funding, care giving, and let’s just say we’re under some really special stresses in this Corona virus period and with this severe economic downturn has got 20% at least 20% black unemployment, 40% of our small businesses, clothes closing and 1/3 of all Corona viruses. The virus deaths in the US are black on a lot of that

[00:17:10.90] spk_0:
is proportionate again.

[00:17:32.21] spk_1:
Yeah, a lot of that care giving and community giving falls on us. So we’re trying to also revive our ideas in our spirits through this entire summit. Siris for four events Let’s let’s talk

[00:18:03.91] spk_0:
some about some of the racial inequities around around broader philanthropy. I know black flan. Three month is devoted toe elevating black philanthropists and funders and investors. But I want to go a little broader and talk about some of those inequities in philanthropy generally. And, of course, you know, tie it to the the conversation that we’re all having about systemic, institutionalized racism. What’s the, well, the later listed contento? Later for Okay, please.

[00:18:52.34] spk_2:
Yes, The data says that roughly 2% of ah foundation funding from the country’s largest funders go directly to black led organizations and black communities, which is, you know, really shocking figure when I first learned of that. And so that is evidence of the chronic underfunding and also some of the racial bias that exists. The conscious and unconscious bias that exists in the philanthropic realm and black philanthropy Months and discussions at the summit are all centered around, uh, making things right and more equitable, and just in the philanthropic and just general funding round. So,

[00:18:53.18] spk_0:
Jackie, what’s the what’s the role then of black philanthropists and and funders, et cetera, In bringing about that change,

[00:20:58.39] spk_1:
right? Well, I want to note that the reason the summit is called black giving and beyond is we realize that there are Eddies and equities that we have to talk about our own philanthropy, our own giving his black people. But we also have to talk about the responsibility of institutional philanthropy to our community and address some of these longstanding disparities are delivering. In 19 eighties, when we were when I first started, we grabbing the same conversations. It is like deja vu all over again, cause it hasn’t gotten that much better. And so, um, philanthropy is a key piece of it, but with the figures, I just shared with you around Really, the decimation of black communities in this cove it era is going to take more than fully. And the truth is, when we look at social investment and venture funding, we get about 1% of those funds as well. So there is just there’s a problem with private sector funding toe black communities, whether we’re looking at philanthropy or business funding, and our nonprofits and our businesses have to be strong to rebuild what we’ve lost. Win had it much anyway, and we’ve lost so much just in the recession has just gotten started that this summit is inviting philanthropists. Community and institutional toe have this question discussion about equity, but also VC funders and social investors. And so, in fact, every session we have tried to have health care expert who can talk about the impact of Corona virus, but also institutional or community philanthropy and activist as well as a V, C or social investment funder. And so our model, our hashtag we have a couple of them. We call ourselves the Fund Black Summit. That’s our nickname and black funding matters. And in that statement is not just philanthropy. Of course, that’s that’s what’s driving us. It’s part of our culture. But our for Ray into the social justice movement, our current racial equity movement is to say, Look, there’s a serious problem with funding overall, what are we going to do about it?

[00:21:30.43] spk_0:
And so you need to be talking and not just you. We all need to be talking beyond the black philanthropy and funding and investing community. I mean, you do

[00:21:35.55] spk_1:
you want me? Oh,

[00:21:54.64] spk_0:
you won’t be talking more much more broadly because every $3 billion is sizable, although, you know, roughly half of that is leaving the U. S. We have is valuable, which has its as its place. But but roughly only half is staying here. And in the big scheme of of giving, you know, that’s a that’s a small amount. So

[00:22:58.79] spk_1:
in the big scheme of get funding, we’re talking trillions when you air in. I’m venture funding and you add in social investment. And so we really are talking about how do black folks get fair Access to the capital doesn’t necessary to sustain any people or community. And so it’s an economic justice summit as well, and we hope that the practical outcome and belated alluded to this is the’s on just fund black new black funding principles that include philanthropy but moved beyond it to ask the hard questions of veces Why do you have why is it OK to funding young man who dropped out of college and had a good idea but has no track record? Give him millions and millions of dollars and dope hold him accountable for it. But then you can have Ivy League educated black business leaders who have created a profit proven themselves, and they have to jump through all kinds of hoops because of this hoops on

[00:23:06.14] spk_2:
fire at that.

[00:23:48.44] spk_1:
Now this implicit bias you have around how women can’t do certain kind of business or how you know black people aren’t good with numbers, even though people aren’t doing that on purpose. That that’s what implant implicit bias is sure, Um, and it really has an impact in our communities. Folks in Minneapolis, we’re saying we don’t own anything. We can’t own it. We can’t own our businesses. We can’t on the house because of the price of living. When you have a whole group of people who feel like they have no stake in the future of the community and the country cause they can’t get fairness is back for democracies. That’s what we’re partly up to. Yeah, later you have Valetta Door has something to add to that

[00:24:36.91] spk_0:
I was gonna go. I was going to say bad. It’s devastating way We were nowhere near realising our full potential as a country where, what 1/4 of the population is It has just been victim to institutionalized structures, processes racism times Well, 400 years if you want. But certainly I’m thinking even just of more modern times. But, you know, of course, the tragedy goes back. 401 years were nowhere nowhere near reaching our potential as a country. When when that kind of that kind of proportion of the population is not ableto not able to achieve what the other 75% can. Yeah.

[00:25:46.04] spk_1:
Yeah, And I think that George Floyd video as tragic as it is and I still haven’t seen it because I don’t have the emotional I can’t really say I will not see it because I know it. I live in I can’t see it and continue to focus um but I’m glad the world saw it. And it was a very, very brave young woman. Darnell afraid her in Minneapolis recorded it because I think it was a wake up call for the country on the planet. Look, something is seriously wrong. We can’t just keep our heads in the sand and say that, you know, we’re often told. Well, you got a chip on your shoulder. That was the old days. The civil rights movement has come. You have overcome. But that could have been that could have been President Obama. I hate to say it. It could have been any black man or woman with the U. S. Who was subject to that kind of treatment that our education levels are. Achievement are meritocracy does not protect us or give us equal. It’s all off my soapbox. But you asked.

[00:25:48.77] spk_0:
All right, put Europe. Now I put you up there. I want to hear it. Yeah,

[00:27:26.64] spk_2:
Particular points I wanted to add about the summit specifically is one point we always like to make. While liberation is not free, the summit is so it is open to the public and free to register. I’d also like to emphasize the global aspects of it. As Jackie mentioned, It’s a summit series that kicks off, kicks off on August 1st and continues on the 4th 5th and 29th. And I think, um, you referenced 16 19 and the 400 now 104 101 years of documented black life in America. And the fact that this summit is inviting a global conversation I think is significant, particularly at at a time when black people all over the world are recognizing. Or, uh, I guess that we know. But their headlines and media stories from China to Europe to, you know, here in the States and Brazil about anti black racism and the disparities in health and economics that exists. And so we all recognize our connections wherever we are. And there’s also the fact that, um, kind of the the year of the return that 2019 marked for many of us. Many, like people and families, return to Africa to connect to their roots. Um, ancestry dot com and other DNA testing companies have made popular people finding their roots and tracing it back to Africa and being curious and interested in reconnecting with communities there. So the fact that this year’s BPM has ah, very specific global focus and invitation is a significant variety ways. And so we’re excited about that.

[00:29:34.11] spk_1:
Yeah, I will say that the black I asked for was always involved in part because of those Minneapolis roots there were when Minneapolis had, at the time, the largest populations of Liberians and Somalis and Kenyans in the U. S. And they were. It’s still our cause. That coalition is still alive and, well, part of this coalition of women. Um, that put on the first summit. Okay, but now actually having an Africa base, especially for like, for me as an African nous anthropologists focusing on Africa and a diaspora it’s sort of our track into the global economy as well. Global economy. Israel You can’t just focus on your backyard. We all have to figure out how to collaborate across borders is just and do business. And so it is really, um, an act of also, um, not just solidarity for practical economic empowerment. We’re asking the question. How could we support each other’s issues? No matter where you go, black women tend to have the highest rates of maternal mortality in their communities. And that’s triple in Africa that strictly Europe. That’s true in the U. S. S. So there are these global questions about our future, and we can Onley come up with the answers is if we’re collaborating across the lines of national origin, ethnicity, religion, and we define ourselves in many ways, just like Asian or Jewish people. There’s a lot of diversity within. Diversity is beautiful to bring it all together in this summit experience.

[00:30:13.70] spk_0:
Are we gonna leave it there then? All right, that’s beautiful. Wrap up Black Philanthropy Month Black Philanthropy month dot com kicks off August 1st we all well, we all are wanted to participate. We all are sought after so black philanthropy dot com We didn’t say it, but I’ll just shout out quick. The theme for this year’s Black Flam three month is Foresight 2020 which is cool. That’s very good. Thank you very much. Jackie. Jackie Copeland. You’ll find her at the Wise Fund dot or GE and at Jackie, Be Copeland and later Fulwood Valetta dot com. And at Valetta F Jackie Valetta. Thank you very much.

[00:30:21.39] spk_1:
You can tony and later

[00:32:36.04] spk_0:
we need to take a break. Cougar Mountain Software. Their accounting product Denali, is built for non profits from the ground up. So you get an application that supports the way you work that has the features you need and the exemplary support that understands you. They have a free 60 day trial on the listener landing page at tony-dot-M.A.-slash-Pursuant non. Now it’s time for Tony’s Take two. I’m very proud to announce the launch of planned giving accelerator. This is a yearlong membership community where I am going to teach you everything I know about how to start and build your planned giving program. Just like this show. It’s designed for small and mid sized nonprofits. I’m gonna produce an exclusive podcast for members. Exclusive. Webinars. We’ll have asked me anything Sessions on Zoom in small groups. There’s gonna be a Facebook community that’s private. Just for members will have all kinds of resource is checklists, templates, everything you need, and I’ll share everything I know on how to start your planned giving program. It’s planned giving accelerator go to planned giving accelerator dot com. You’ll find all the info there. That’s where you sign up to join the membership. Our yearlong membership community. I hope you’ll join me if you don’t have a plan to giving program. This is the time to get started. You’ll pay a lot less for a full year. Then you’d pay to work with me directly in just a month. Everything you need is that planned giving accelerator dot com that is Tony’s Take two Now. Time for collaborations. Mou to merger It’s my pleasure to welcome back Jean Takagi. It

[00:32:38.49] spk_1:
always is. You know

[00:33:00.14] spk_0:
him. He’s our legal contributor and managing attorney of Neo, the non profit and Exempt Organizations Law group in San Francisco. He edits the wildly popular non profit law blogged dot com, and is the American Bar Association’s 2016 outstanding non profit lawyer. He’s a part time lecturer at Columbia University. The firm is that neo law group dot com, and he’s at G Attack. Welcome back to the show, Gene. Always a pleasure to see you.

[00:33:07.84] spk_3:
Thanks so much. Great to see G tony

[00:33:10.02] spk_0:
doing okay out in California. So

[00:33:11.80] spk_3:
I am thinking Okay. Um how about how about you?

[00:33:15.04] spk_0:
Yes. The beach on the ocean are still across the street from me, so I mean,

[00:33:19.09] spk_3:
that’s fantastic. Very angry.

[00:33:26.34] spk_0:
I wake up every day with a notion across the street. And how bad can it be? Thank you. Yeah, I’m doing fine too. Thanks.

[00:33:29.64] spk_1:
So we’re talking

[00:33:58.99] spk_0:
about, um, you know, joining forces on and there’s Ah, there’s a broad spectrum of possibilities that this can take on, but without getting too technical on before we get to some of the summit of possibilities, you’re seeing an uptick in your practice and research is showing their stats. They’re showing their arm or not profits considering or exploring some kind of collaboration. You know what’s going on? What are you seeing?

[00:35:42.54] spk_3:
Yeah, and, um, I appreciate kind of being able to tell you that I’m doing well, but I know that there are a lot of people out there that are going through some pretty tough times right now, and there are a lot of organizations that are going through some very tough times, and that’s definitely not restricted the for profit sector. It’s hitting the nonprofit sector very hard right now as well. On top of that, the demand for many non profit service’s are higher than ever, as a lot of people are struggling through these times, so, yeah, non profits are getting hit hard on the revenue side. They’re getting hit hard because of the man, for their service is on their limited ability to deliver them with all of our shelter and place orders. So, through all of that, um, you know, there have been some conjecture that that many, many nonprofits are not going to survive. Over the next year on, we’ll see the loss of many nonprofits. And there’s this desire that many of these nonprofits air serving communities that are not getting the attention that they might from larger, stronger, financially organizations it might go under the radar and looking to see how their programs and what they’re trying to do is going to fit in. And in this time, where we’re also seeing this huge movement towards greater equity, racial equity, social justice, picking up these small nonprofits and their programs, and saving them so that the beneficiaries who are most impacted by the pandemic and all of the associate ID bad things that happened around it has become important. So nonprofits were struggling looking to save programs may be looking for some sort of collaborative partner to help them through and some of the bigger funders and bigger organizations are saying yes, we want to do more of these severely impacted communities that we’re not reaching as much as you know, some of these smaller organizations are. We want to collaborate with them and keep those service is alive.

[00:36:28.23] spk_0:
So if if we feel like we’re in that boat, uh, I mean, I guess it could be either were way. You feel particularly, um, strong in our community, or we feel like we’re at risk and vulnerable in our community. Um, where would we start this? Where would we start the possible collaboration conversation? We said we start internally. I’m sure what? What we need to be talking about among our C suite and are board.

[00:37:59.43] spk_3:
Yeah, it’s a great question. And hopefully there’s a sense or ready with some organizations that you do know your allies in the space. They may not exactly overlap with you. Probably they shouldn’t, you know, for reasons of competition. But you generally know who your allies are, and I’m marrying you. Want to call collaboration? If you want toe equated to a marriage in some form, you don’t want to marry a total stranger. There’s, um, a huge risk to that. But if you do know some organizations out there that are allied with you, um um, or if you go to your community foundations if you kind of know about them but don’t really haven’t inside sort of a deeper relationship with with some of their key stakeholders and board members and C suite officers getting introductions from community foundations from large funders who being be funding multiple organizations in the same area. That’s kind of how how I would start to get started. Teoh first have the executives start to just talk about it in general, hopefully from a position not like a urgent panic, Um, but from a position of well, let’s see how we can best serve our communities that we’re both trying to do well it and do it in the best way possible.

[00:38:53.57] spk_0:
I read an article that you suggested, written in response to ah question that was submitted by a museum that was on the stronger side in the community and wanted to open conversations but didn’t want to appear predatory. And as I said, you know, there are there are a lot of ways to work together short of merger. There are different, just sort of service agreements and mutual understandings could be a contract or that’s legally enforceable or not. But there are a lot of different ways to work together. So at this early stage, you’re just asking or inviting. No, we all know that we’re struggling. Would you be open to, ah, a conversation about how we might work together, how we might collaborate to serve the community in this, you know, increased time of need.

[00:39:17.03] spk_3:
I think that’s exactly right, tony. And the greater emphasis that you could put on your common missions and forget about, at least in the initial discussions, forget about, like, power dynamics and all of that. But just go in two people talking about their organizations and what they’re trying to do to strengthen their communities and say, What are we trying to do? Where are risks to those communities? How is our missions are common mission at risk? And what can we do? The best address that as we’re facing these unprecedented forces right now, um that are really hurting on the communities were trying to serve and could eventually you’re gonna enter into the discussion that it could, you know, possibly, uh, cause a cut in service is or possibly three eventual shutdown of a program or a worst case, the dissolution of an organization. And I wouldn’t lead with that. But that’s something that that both parties want to be transparent about as they continue their discussions.

[00:40:58.51] spk_0:
Right, Right. But initially, you’re just exploring. That’s right. We’re not talking about shutting down here program or us shutting down hours. We’re sharing about where we’re struggling and where we’re succeeding. Know some organizations are doing well in fundraising in the midst of this triple crisis dream, healthcare, racial equity and and recession and others are not. So you’re just that the exploration stage, I guess, is what I’m is what I’m saying and then going beyond that is that when you would start to draw your board in? You know, I’ve had a couple of conversations with the CEO over at whatever agency we’ve been exploring some some ways that we might be able to help each other. You know, is that the stage you would start to bring this conversation to your board?

[00:41:27.81] spk_3:
Yeah, it depends upon or soon, yeah, it depends upon the board that you have. So it might be bringing in the board chair if that person is particularly strong, um, in their leadership on maybe is well connected if you have some board members who are who can take that role without necessarily bringing the full board in,

[00:41:35.88] spk_0:
right. Oh, I’m sorry. I just meant when I said bring the board and I meant make him privy to your conversations. Yeah, bring them to meetings with the other agency.

[00:42:35.97] spk_3:
Yeah, even even in the conversations before you bring it out to the full board. Because sometimes confidentiality is hard, especially with larger boards. You may want to keep it to a smaller group until you feel like you’ve got something serious. Um, so sometime I was blowing confidentiality because you shirt with too many people off the coffee meeting, Yeah, can kill the whole deal. So just to be careful about, then it depends upon your board. If you have a board of three people, you’re probably best to shirt with the whole three board members right away and make sure that they’re going to keep it confidential. If you have a board of 25 people, maybe not sure with them your first conversation, but take it to the board chair executive committee level. I feel like if there’s something there, then bring it to the board. It’s The board will come in early. But after maybe a couple conversations

[00:43:52.25] spk_0:
time for our last break turn to communications relationships, the world runs on them. We know this turn to is led by former journalists so that you get help building relationships with journalists. Those relationships will help when you need to be heard, so that people you know so that people know you’re a thought leader in your field and they specialize in working with nonprofits. They’re at turn hyphen two dot ceo. We’ve got, but loads more time for collaborations. MoU to merger You have an excellent post at non profit law block dot com that lists a lot of different possible alliances from the least least legally in encumbering, I guess, which is the MOU, or memo of Understanding through merger, which is a total sacrifice of independence on the part of one non profit in favor of another. Um, so there’s a there’s a broad spectrum of possibilities, and at this exploratory stage, we’re not No, we don’t have anything particular in mind. We’re just trying to find out how we might be able help each other.

[00:44:02.89] spk_3:
I think that’s right, tony in and for people to just make it a black and white decision of like, whether we merger, we don’t merge. That’s you know that’s just too serious, that that’s like proposing marriage on your first date,

[00:44:35.89] spk_0:
right? Right. That’s a mistake, and it’ll scare somebody away. It might scare both parties merger, and neither one of us are ready for that. But there’s a lot of possibility. So, um, I let’s see, How can we find this article at non profit law block dot com, the one that lays out all the different methods of aligning?

[00:44:38.74] spk_3:
I I think, non profit collaborations, structural options. And so if you go onto the non profit la blogged dot com, there’s a search far. If you hit non profit collaborations, you’ll find it.

[00:45:08.19] spk_0:
Okay. Excellent. Thank you. Okay, I’m now. Okay. So now let’s say we have furthered our conversations and we see some possibility, but we don’t know what structure to take. How do we how to read procedure? Help us out?

[00:48:05.87] spk_3:
So e think you’re really aiming to see exactly what you want to do, what each party wants to do and where your meeting in common. So if there’s this idea that we want to work together, but we don’t know each other very well, Um, let’s see what we can do. That might be kind of the non binding MOU, the sort of the least amount of commitment made by either organization on that spectrum of collaborations. Um, so you know, we don’t know each other yet. Let’s get to know each other a little bit better. Let’s see if we work to work on this project together. You do this, I’ll do this on and it be their side fails to do it in the way the other side wants. Nobody gets in trouble. I mean, that’s just your your own thing. If you feel like there’s something more to it and it’s more urgent, it’s like, you know, we’re about to, you know, get to the point where we seriously might have to curtail. Our service is to this group of people. Um, and we know you’re also serving them, but in a slightly different way. Is there something we can do to help strengthen our ability to continue our service of of this group of beneficiaries through some sort of thing that we do collaboratively, you know? Can we do it jointly? Are there any efficiencies that we can have if we coordinate our activities together and in this case, one party might be or both parties might be a little bit dependent upon the other party meeting their obligations because they failed to do it, what the other party could could not be able to do their job either. In that case, maybe a simple sort of contract would be involved. T make sure that we’ve got it binding, that we owe this obligation to each other, um, and will formalize it in a contract. Um, all the way to if we know that this organization may not make it, but we want their programs. Um, and both parties want to say this single program that is essential there might be a transfer, an asset transfer of programs, intellectual property associate with the programs of employees that were working on the programs they might shift toe work for. The new employers of the program is housed in two different entities that would be some sort of asset transfer agreement and merger might be kind of at the very end of that spectrum of where we think it’s in the best interest of both organisations. It might not be that one would go away, but we think that there’s so much synergy. And after really thoughtful discussion and due diligence, we think we’re gonna be more much more powerful in delivering our mission, our common missions together rather than apart.

[00:48:10.33] spk_0:
It sounds like some legal help may be appropriate here if we’re gonna enter into some kind of collaboration with another non profit.

[00:48:59.57] spk_3:
Yeah, I like the idea, and this is a little self serving, because I but I like the idea of Brown wears in early, so you can. They can give you kind of you all of the options menu, if you will. Sometimes merger consultants, which I think are absolutely necessary as well, can come in there, and they may be trying to attain their goal. Eso if their merger consultant very thinking merger kind of because a surgeon think surgery is the response to a health issue. That’s the tool they know for the more experienced consultants who deal with these array of options. You know, if you if you’re sure you have a consultant like that, they’re probably gonna get get you far down the path as well. But the lawyer might be able to just sort of add those little tips on and steer you away from certain traps at the beginning. You don’t have to hire the the lawyer to do kind of full blown due diligence surfaces off day one, Um, but bringing them in early might lead you down the right past.

[00:50:06.66] spk_0:
There’s some psychosocial aspects to this to, like, ego and trust. We’re we’re gonna have to put aside our ego if we’re going to, if be willing to admit that we can’t continue on our own, um, and trust, you know, even if even the most stringent contract still requires trust between between the parties because no, no contract can envision everything. And if there isn’t trust going into a contract, I think you’re I think you’re doomed even with one that’s well written. So there’s some interpersonal aspects to this do

[00:50:43.06] spk_3:
absolutely, um, and trust. But to the extent you can verify, so make sure you know the individuals that you’re putting trust in, You know, when coffee meeting is great, but you’re gonna want to know that person more. You’re gonna want to know what their culture is more since culture is going to be really important in any kind of collaboration, whether there’s a culture fit if you don’t know, you know who the people are on the other side that are suddenly gonna be working together with your organization’s people. Um, that that could be a huge risk factor that you have to know how, how this is going to blend together

[00:51:08.40] spk_0:
so that if you do have the luxury of time, neither neither non profit is failing and in crisis. Then, you know, basically your advice was, hold hands before you get married, take things slowly, and then maybe you can expand the collaboration as you see whether the cultures match whether the objectives are being met. Are we actually delivering better service is or more service is Have we saved money? So, you know, have some of these goals been met cause a lot of times they’re not.

[00:51:44.66] spk_3:
I like that, tony. And so when organizations are operating both in a position of strength, even if one is bigger and what color that works out really nicely. So you can you can hold hands and get closer before you finally decide what ultimate step you want to take together. Um, so that’s what I prefer. I know, especially in these times, that may not be the reality for many organizations.

[00:51:50.56] spk_0:
What do you want to alert listeners to around this topic? Gene,

[00:51:56.86] spk_2:
I think one

[00:53:20.05] spk_3:
thing is not to be scared and not to get lost in not only your personal ego, which may mean for some people. Well, if we merge, I’m not gonna be a board member anymore because they’re the existing or surviving organization, has a board, and maybe they’re willing to take on a couple of us from the smaller organization. Um, but I’m I may not be part of that, but I’m not gonna let that drive my decision as to whether to merge or not. Because that’s now That would be about me, not about, you know, the organization and its mission. Um, the same thing goes with the name. So you know, often times people are, you know, deals get killed and mergers because the smaller organization or the disappearing organization is not willing to let go of the name. Um, And, yes, you could negotiate around naming. Keeping your name is a program and having some sort of of recognition on the website of the merged entity. But some people are so locked in on it, they’ll fight tooth and nail to make sure that their name is standing out as, like, part of the same merged entity’s name. So they combine both names, and it’s really clunky, and it just doesn’t really make sense. But, um, people get lost in that and start to make it a power play of, like, who could negotiate and exercise the most power in this transaction rather than what is in the best interests of our mission on both short term and long term.

[00:53:41.35] spk_0:
Okay. And again, merger, of course, being the extreme possibility for for collaboration. Okay. Yeah. Okay. Um, if you feel comfortable, we can leave it there. Gene, You all right?

[00:53:44.77] spk_3:
Yeah, I’m good. I’m good.

[00:53:47.95] spk_0:
Okay. Okay. Jean Takagi, find him in, uh, neo law group dot com and at G Tack and Gene talk to you in a couple weeks for the 500 show.

[00:53:56.36] spk_3:
I’m so excited for you.

[00:53:57.90] spk_0:
Thank you. Back cheese did. Thank you very much, Jeanne. So long.

[00:54:02.24] spk_3:
Okay, but

[00:55:34.44] spk_0:
next week, non profit radios. 5/100 show. It’s our 5/100 show and 10th anniversary. Live music, Lots of guests and giveaways. Send me your story. How did you get into non profit work? Hardly anyone chooses this as a career. How did you get in? Well, read the top three stories on the air. You’ll be preserved forever in our 500 show, and you’ll win a bag of Cure a coffee. Be with me next week for the 5/100 non profit radio. If you missed any part of today’s show, I beseech you, find it on tony-martignetti dot com were sponsored by wegner-C.P.As guiding you beyond the numbers wegner-C.P.As dot com by Cougar Mountain Software Denali Fund Is there complete accounting solution made for non profits? Tony-dot-M.A.-slash-Pursuant her mountain for a free 60 day trial and by turned to communications, PR and content for non profits. Your story is their mission. Turn hyphen two dot ceo. Our creative producer is clear. Meyerhoff Sam Liebowitz managing stream shows Social Media is by Susan Chavez Mark Silverman is our red guy on this Music is by Scots with me next week for non profit radio big non profit ideas for the other 95% Go out and be great

Special Episode: Nonprofits & CARES Act

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My Guest:

Gene Takagi

Gene Takagi: Nonprofits & CARES Act
The CARES Act was passed late last week. We’re recording on Friday, April 3rd. There are benefits in the Act that nonprofits can take advantage of. Benefits for your org and your staff. And they’re pretty good. So you may want to apply. Plus, longer term relief for nonprofit fundraising. Gene Takagi explains it all. He’s our legal contributor and principal of NEO, the Nonprofit & Exempt Organizations law group.

 

 

 

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[00:01:07.49] spk_3:
Hello and welcome to tony-martignetti non profit radio big non profit ideas for the other 95%. I’m your aptly named host. This is a special short episode of non profit radio to meet the needs of nonprofits during the Corona virus pandemic. This is our fourth special episode. Non Profits and Cares Act. The Cares Act was passed late last week. We’re recording on Friday, April 3rd. There are benefits in the act that nonprofits can’t take advantage of benefits for your organ and your staff, and they’re pretty good, so you may want to apply. Plus, there’s longer term relief for nonprofits. Non profit fundraising. Jean Takagi explains it all. He’s our legal contributor and principle of neo the non profit and exempt organizations Law Group Jean Welcome. How are you?

[00:01:09.60] spk_0:
I’m doing well. Thank you very much, tony, for allowing me to share information with your with your audience.

[00:01:15.42] spk_3:
Oh, it’s my pleasure. I know you’ve been ah, believing it is my pleasure. You’ve been busy all week talking about the Cares Act, I’m sure.

[00:01:26.18] spk_0:
Definitely everybody interested in in, uh, how nonprofits can take advantage and really thankful that there’s some advocacy groups out there that got nonprofits considered in these in these Lost?

[00:02:11.24] spk_3:
Yeah, for sure. Explicitly in in some cases. So all your work this week has led you to this to this pinnacle non profit radio. So it’s all led up to here. So thank you for all that preparation that you’ve been doing toe to talk to our listeners. Um, is it is it best if we, uh, you want to start with an overview? I mean, I definitely want to get into the paycheck protection program and the economic injury disaster loans. Do you want to start a broader than that before we get in that specific? Well,

[00:02:51.14] spk_0:
I’ll just mention that the Cares act is this $2.2 billion package. And, um, when provisions were put in for small businesses, it was really important. Thio note that nonprofits are out there who are also employers who are also desperate for assistance at this time. And thio have non profits put into provisions like the payroll protection program are really important. But this is, um, just part of the legislation that’s come down since the Corona virus pandemic has hit us and and our federal government has started paying attention to what needs our country’s having great now desperate needs in many cases. And there was a set of laws called the Families First Corona Virus Response Act. That duck with leaves a swell paid leaves by employees. And so that’s another component that I hope we get a chance to talk about in addition to the care, Zach.

[00:03:19.34] spk_3:
Okay, Um, all right, so why don’t we? Why don’t we take care of that? What’s the what’s the the leave? The leave provisions? So the

[00:04:46.65] spk_0:
leave provisions in basically apply to again small businesses, including non profits with less than 500 employees and provided for two weeks of emergency paid sick leave. Now, sick leave isn’t required to be federally from under federal law to be. I hate it. In many cases, some states do require it. But here is a federal law ah, that required now all small employers, including non profits, to provide two weeks of emergency paid sick leave. Now there are some exceptions that might be possible for employers that had less than 50 employees for undue hardship, Um, for really, really small organizations where that’s just not at all possible that that is a standard that they might be able to to meet. But generally this applies to everyone, and the amount of paid sick leave is at the employees regular rate up to $511 per day. So it’s captain a 10 days or 5100 and $10. Okay, um, and if it is to take care of ah, child or, you know because of the child is is the one who’s sick or the child is, uh, needs child care because their schools of clothes because of quarantine rules, then the amount would be the employees regular rate up to $200 per day. So not the full 511. But it would be. Actually, I’m sorry. The employers rate times 2/3 that 2/3 of the employers rate or a captain $200 per day for that 10 days. So that’s the first section required. Paid sickly.

[00:05:05.28] spk_3:
Okay, where can we find this in writing somewhere? So because that’s a lot to digest. Yeah, it’s See this on the web.

[00:05:36.24] spk_0:
So if you just Google families first Corona Virus Response Act, um, the National Council of non profit actually had a good site on that. So that maybe a place to look Okay, Cool. Uh, the other leave that they have is a 12 week of emergency family and medical leave, and basically it’s a 10 week add on to the two weeks that you originally had. But this is only for care of family members again. Child care. If there’s a sick child due to the Corona virus or their school got quarantined, and child care is required to be provided

[00:05:50.87] spk_3:
that it is not to be child care, could it be care of someone else in the family who’s not a child?

[00:05:56.64] spk_0:
It could be another dependent. I believe that that’s Ah provided a family member

[00:06:02.02] spk_3:
dependent. Okay, but that wouldn’t be a parent then, unless the parent was independent.

[00:06:38.48] spk_0:
I don’t know that that currents are included will have to wait to see if, if the regulation spell that out become. And that’s an additional 10 weeks and again to the to the 12 weeks that sorry to the two weeks that that’s in the original act. And that’s a 2/3 of each employee’s usual pay up to $200 per day. Now, this is a huge burden on employers, right? All of a sudden, if they hadn’t been required to pay leave before now they’re required to pay leave. And obviously, a lot of employers are gonna be cash strapped now if their businesses have closed and things so the these air not available if the workplace is completely closed down. Um, and the other thing to know that employers can recoup these costs through a payroll tax credit. So details kind of in the regulations or in some of the sites, including the National Council of non profit sites I mentioned. But employers can recoup these costs. Employees are getting paid sick leave under these provisions. So that was one of the immediate loss that came out

[00:07:10.84] spk_3:
when you say the workplace must be closed. You mean the organization Shut down. You don’t mean the office closed, do you? Or do you?

[00:07:18.60] spk_0:
If the office is closed and the employees are unable to perform their jobs from home, so if

[00:07:38.18] spk_3:
and unable to be able to work from home Oh, correct. Okay. Okay. Because of the caregiving that they’re providing a correct. All right. Um, can we go to the to the S B a loans. Okay. Is that right?

[00:07:41.24] spk_0:
Yeah, absolutely. That’s that’s one. Probably critical.

[00:08:42.84] spk_3:
Okay, Yes. I want to make sure we exhausted the other. The other information that you had, I want to say just to get started. The S B a site s b a dot gov is very, very simple. I think I was able to understand it, Um s p a dot gov and then you’ll be looking at this basketball size picture of a Corona virus. You can’t possibly miss it on the site, and you just click in there and to learn more. And then you just scroll right down to Corona virus funding options. And then, ah, Pedro opens up with, ah, lot of what we will. Well, it’ll be. It’ll cover what? Gene and I are about to talk about the paycheck protection program. The e i D. L. Which is the economic interest, Economic injury, disaster loan. And then there’s a couple of others too, so it’s really very, very helpful, I think thea CSB a site s p a dot gov um Shall we start with the paycheck protection program gene that that’s also only for employers of 500 or fewer right employees.

[00:09:31.68] spk_0:
Yeah, fewer than 500 employees, including non profit. So really a big point to add that nonprofits are eligible for this. Ah, and agreed that this is an important provision. $349 billion was dedicated towards this. And on the date that we’re recording this tony is the first day that the application theoretically was released. Um, but these loans are available by S from S P a lender’s ah, that would include most F d I C insured banks. But not all of these institutions are ready to implement this, even though the application theoretically came out today. And one of the concerns that everybody is having on day one is that the regulations just came out as an interim rule last night.

[00:09:47.06] spk_3:
Yeah, so that just right, Just Thursday, just last night, something came out. Yeah,

[00:11:04.31] spk_0:
And while the application and and the SP a site makes it look easy, there are a lot of unanswered questions or ambiguities, and that is making with lenders have have a problem. Ah t implement this. Some people are guessing all of the loans are going to run out on day one because $349 billion. Sounds like a lot. But if you say every small business in the country is eligible thio to take this in every small amount profit, there’s only so much that that money is going to last. And there’s a question about whether the lenders are going to prefer their own clients. So their existing clients that have loans with the organizations are they gonna prefer the larger clients because they value their business, for which, you know their banks are going to reach some sort of reward over time. Are they gonna value them ahead? Was a small non profit that’s coming in? So my best advice is to try to go in to your own bank, find out if they are an SP a lender, uh, and make your case to them as quickly as possible. I don’t know that everything will be depleted on day one. I’m That might be the worst case scenario, I believe while Spargo Bank has not started yet because of issues with implementation, So there are there are going to be problems getting this rolling, but once it rolls, the money’s not gonna last very long. So I would say to the extent you can I get your paperwork together very quickly. The SP A site lets you know kind of what type of paperwork is required for this, and there’s not a lot. It’s not like a traditional known as well, tony. I guess that’s maybe the first thing I

[00:11:40.04] spk_3:
should be relaxed some of the some of the requirements and they’ve really streamlined the the application, especially for this. I know for myself, Um, well, we’ll get to the economic injury loan. But just from one day to the next the economic injury loan, the application went from like four different forms you had to fill out last Sunday night to Monday when it was just streamlined, like two or three. It was like there was three screens. You just had a pick selections and make a bunch of certifications, and you were done and it was much more burdensome just the day before.

[00:12:15.34] spk_0:
Yeah, and these things have been changing on the Fly, the paycheck protection program. In the best scenario about this, that nonprofits need to know which. Maybe I shouldn’t have hidden the ball, hit

[00:12:28.73] spk_3:
the ball, start figuring it out. That’s okay,

[00:12:31.40] spk_6:
is

[00:12:32.64] spk_0:
why it’s so great. If you can access, it is it’s alone. That’s forgivable. Meaning that it’s essentially a grant s. Oh, it’s a loan that you’re going to make. And then if you keep up your payroll force, um, you pretty much get to recoup all of it back. And that’s a huge thing, right? To be able to keep your work staff on so that that’s the big point.

[00:13:23.89] spk_3:
And the details of that are in the, uh, in that on that s B a site that I, uh that I that I was suggesting people go to says, You know, you’re if you haven’t kept everybody, you have to rehire everybody, I think, by June 20th or June 30th of this year. But the details are on the SP, a site. It’s really it’s in plain language. It’s really pretty simple to understand what you’re committing to. But even if you know, even if you’re not able to keep up your workforce on and not have it converted to a grant, at least it is. It’s a very favorable

[00:13:32.34] spk_7:
Hello,

[00:13:33.34] spk_0:
right? It’s 0.5% less than 1/2 a percent

[00:13:38.53] spk_3:
and deferred interest is deferred for the 1st 6 months.

[00:13:41.41] spk_0:
Correct? And do on a two years. Right now, though, they’re very likely could be an extension. And we may see variations of this and hopefully, more appropriations of more money. Should they run out of this amount. I I’m pretty sure the federal government knows that this is still phase one. Ah, and they’re going to be additional phases necessary on an individual level as well as on on entity level.

[00:14:15.84] spk_3:
Yeah, yeah. Um, all right. Anything more you want to add about Thea about the PPP, The paycheck protection program

[00:14:55.84] spk_0:
show? Sure. So let’s talk about what it what it what the loan is for Andi. That’s exactly what it refers to payroll to paying your payroll. But it also includes utilities interest on your mortgage, not the principal on your mortgage, but interest on your mortgage, uh, and rent. So you and utility so some some occupancy costs and employee costs. And generally the amount of the loan is going to be determined by 2.5 months, essentially 2.5 times the average totally monthly payroll costs based on ah, one year. I’m sorry. Based on the last year. A test period, right that times a 2.5 times monthly payroll costs. That’s something Thio think about as being a huge, huge help at this time.

[00:15:24.31] spk_3:
That’s that’s 10 weeks worth of payroll, plus those of expenses that you mentioned interest on mortgages, utilities, et cetera, And

[00:17:39.70] spk_0:
no collateral. No personal guarantee is not like other S b A loan. So, um, a CZ, long as you’re under 500 employees there, few other qualifications, some of them I’m not so happy about that. You know, if you if you’ve got a criminal record or anything yeah, an indictment, you don’t qualify for it. Um, not not even a conviction there, Justin Indictment. So it’s It’s interesting formulas that would come up with that. I’m sure there was, ah lot of haggling on the floor to get something up quickly, but that’s what we have that there are a lot of details in this one area of confusion that I mentioned tony in BET That’s maybe creating a little bit of headaches for for banks and lenders and also for organizations that are trying to share information about this, including May is what about independent contractor costs. So we talked about payroll and payroll. You know, from a legal accounting standpoint, we’re talking about employees, right? But what if what about the non profits that are paying people? Is independent contractors Ah, and my understanding. And based on the interim rule that came out last night from the S B A. That payroll costs do not include independent contractor costs. Although I’m seeing conflicting information from independent sector and the Council of Now, not the National Council of Nonprofits right now about that issue and partly because the application refers to do you have employees or independent contractors that are reported as 10 90 nines? That’s what the application says, which would lead you to to think that if you can have either or that there must be some benefit if you have independent contractors that you’re paying as well. But part of my rational, I’m thinking that the SP a interim rule is probably right on this issue is that independent contractors, even sole proprietorships, can apply for this loan forgivable loan program, the payroll protection program themselves, so they don’t have to rely on hiring entity to do it for them. They can apply for it directly. So we’re a little confusion. They’re not absolutely clear. I don’t think any of us can say with 100% that we know the truth. Oh,

[00:18:14.34] spk_3:
so at this stage, are you best leaving independent contractors out of your calculation of payroll for purposes of of the PPP just so that you don’t, you know, muddy up your application with a possible problem that would that would hold it up and then knowing that maybe you can go back when you get further guidance? If you’re If you are using a lot of 10 99 contractors, I think this is gonna

[00:18:15.17] spk_0:
be processed very quickly. And

[00:18:18.14] spk_3:
you think they’re gonna get you think they’re gonna gloss over issues like this in the beginning and very possibly clean up later?

[00:19:01.94] spk_0:
Yeah, very possibly. The problem with including the 10 99 contractors, Maybe Twofold. One is that if they weren’t intended to be included, will the government say that’s not gonna be forgivable? And is your budgeting based on you know, making these considering these grants rather than loans? And it very well could be that if you report independent contractors, they may just say No, this isn’t forgivable. The whole thing is alone. That’s one consideration. I don’t think as nonprofits think about this and end the limited amount of money that’s available. They shouldn’t count on this. They should definitely apply for it as quickly as possible. But they shouldn’t 100% count on it being available for them

[00:19:17.72] spk_3:
available and forgivable and unforgivable. That’s Yeah,

[00:19:21.63] spk_0:
that’s correct. That’s a really important. Okay, point. All

[00:19:56.70] spk_3:
right, balance, balance these things as you’re doing your application. You know, maybe get advice from a board member. Certainly legal counsel, if you have that. But but don’t you know, I don’t think you should let these potential problems hang you up and not not participate yet. Get your application in. You know, you might decide not to include your 10 99 contractors. Maybe that’s a decision you make. But you get it in at least for your for your payroll, your payroll, folks, your employees so that you know you could be covered for 10 weeks of, uh, 10 weeks of payroll. I mean, that’s that’s valuable. You get the get the darn thing in, make a decision and get it in one way or the other.

[00:20:22.40] spk_0:
Yeah, and have all the material available, including your independent contractor, information available. They’re asking for it in the application, so your bank will probably help determine whether that they’ll include that in the loan or not. Just bring it all in. Get your paperwork ready. I know everybody’s inundated with work that’s trying to keep things together. Leaders are, and this is worth the time.

[00:20:27.87] spk_3:
Yeah, is 10 weeks of payroll Yes, it’s

[00:20:30.10] spk_0:
time. It’s huge. So you’ve gotta put other things aside to get this done and get it done as early as possible because

[00:20:37.09] spk_3:
of you. You’re talking about the money. All right,

[00:20:39.48] spk_0:
get it, Get it ready early next week, if you can.

[00:20:56.04] spk_3:
Let’s move to the ER the i d l. You know, I hate jargon wth the economic injury disaster loan. Um, this is this is different. This is this is other types of expenses, Gene. Yeah. So it’s

[00:20:56.83] spk_0:
work. It’s a working capital loans essentially. So it could be used for payroll. But if you can’t apply for both in and put the same use for both, So if you ask for apparel protection program loan, you can also ask for an e idea alone for the same reason. But you could ask for a different reason for working capital in another other business costs that you’re gonna have. Um, and again, this is designed for small businesses and small nonprofits. But there’s only $10 billion that’s allocated here, So it’s a lot less than the other program. Yeah, but go ahead and apply for it as early as possible.

[00:21:45.37] spk_3:
Now, this has a great feature. Ah, $10,000 advance. That’s an advance on the loan. And that could be forgivable, right? And that’s it. Get their inherent

[00:21:52.04] spk_0:
right. Even if you get turned down. If you whether you get accepted or not, the $10,000 is years to keep.

[00:21:55.25] spk_3:
Oh, it’s whether you get turned out. So even if you’re approved for the loan, the $10,000 advance is still forgivable. Is that right?

[00:22:01.45] spk_0:
I I believe it needs not. It does not need to be repaid in either case.

[00:22:49.34] spk_3:
Okay, okay. My understanding of it. And they’re saying that this is gonna hit your bank within 3 to 5 days of your application. Now, I already applied for my business more than three days ago and I haven’t gotten it. Hasn’t been quite been five business days. It’s been four on. I haven’t seen it yet. So don’t Don’t be wedded to the 3 to 5 days it’s gonna cause they do ask for your bank account. They ask for your account number, they ask for your routing number. Um, uh, so they are intending to deposit this $10,000 advance quickly, But you know, you may not get it within the 3 to 5 days, but it is forgivable and and it is an advance on the loan, so it comes fast, and then the loan consideration is a longer term process, right? So

[00:23:38.35] spk_0:
it gets paid without them processing the loan at all. And you just get paid based on the application, which is fantastic, um, and, uh, again really something to take advantage of, but limited funds. So go in as early as possible. It’s great, tony, that you went in very early. People should should do that again early next week, and this is separate from the paycheck protection program. But if you do get accepted for the forgiveness of loan under the first act of paycheck protection Program, that we talked about that $10,000 under this sea idea will be counted against the cap on that. So just just note that you can’t double dip here. Okay? Okay, but the loan interest rate is 2.75%. Ah, and the maximum term is 30 years. It’s gonna be dependent upon your credit worthiness. So it follows more standard procedures and the paycheck protection lung, which again doesn’t matter what your credit is. Doesn’t matter if you have outstanding loans or not. The first, the 1st 1 that we talked about the forgivable loans disciplined

[00:24:03.84] spk_7:
a

[00:24:26.00] spk_3:
little tighter requirements. Lending requirements more more typical than then what? They waved for the payroll protection. Her act. Okay. Okay. Um, anything you want to add about economic injury, Disaster loan? The e i D. L again, it’s all this is all very well. Very clearly laid out. Big pictures on the S B, a dot gov website. Yes.

[00:24:35.48] spk_0:
I guess I’ll just say that it’s available also for debt payment. So your your ongoing business expenses, including debt payment.

[00:25:21.30] spk_3:
Okay. Okay. Um, so we got some longer term relief. Uh, regarding the charitable income tax, the federal charitable income tax deduction that we, uh, you know, in the ER in the tax and, well, I don’t forget the formal name, Tax and Jobs Act. Ah, there was, uh, there was a reduction in the It took away an incentive for non itemizers to make charitable gif ts. And so And we’ve seen some hit there because the vast moon is that the vast majority the majority of people do not itemize their taxes. Uh, but we got some. We got some relief. So the

[00:27:17.08] spk_0:
tax cuts and jobs act from Thank you your job back from a couple of years ago raised the standard deduction, almost doubling it. The impact of that is it left about 8% of the taxpayers itemizers, so it’s a very, very small portion that actually get the benefit of a charitable contribution deduction. Because the charitable contribution deduction is one of the itemized deductions that you get. So more than 90% of taxpayers get no tax benefit for making a charitable contribution deduction until this act until the cars that came into play. Now, this is only a one year provisions, but I’m hope it’s a precursor for a change in the law to allow for a universal deduction so that there’s more equity across every taxpayer for getting some sort of benefit for making a charitable contribution deduction. So now it looks like it’s on Lee applicable to those generally who are a little bit more wealthier than others, that that have the ability to itemize, taxes, their deductions and get a tax benefit from that and this above the line deduction. How accountants refer to it It’s for $300 so anybody who makes a contribution can get $300 off if it’s to a qualifying charity. And some of the big charities that do not qualify donor advised funds. That’s kind of an important want to note. So don’t advice funds typically used by a little bit more wealthier individual that would tend to itemize taxes their tax returns. But that will not qualify. And that helps to get the money into the stream of operating charities quicker than those that are sort of keeping funds in accounts for years without a that payment respect provisions.

[00:28:33.24] spk_3:
I’m hoping that that $300 will increase in the future, but at least as you said, it’s a start. It’s It’s $300 up to $300 per per taxpayer. And it’s just for this year 2020 so that anyone itemizing or not, could get at least that much. $300 uh, removed from, you know, exempt from, um, you’re from your taxable income or, well, I’m getting into the weeds about how it’s calculated. Let’s not go there. You get it. You have a federal charitable income tax deduction, if you’re if you’re a non itemizers up to $300. So that’s something that when you when you are making your fundraising messaging again because we will get back to that, there will be times when will be the right time for you to talk about your needs and how your donors can help you fill. Those is maybe even these especially critical and unbudgeted needs. You can make it clear that, ah, that nine non itemizers among your donors can I get a federal income tax charitable deduction for up to $300. That may move some people. I

[00:29:32.64] spk_0:
think there’s an op ed. I can’t remember if it was in the Chronicle of Philanthropy or not earlier this week. Tony, that talked about the need to give to smaller charities at this time. Those were the ones that are gonna be really struggling. And if you really value a small charity, this $300 deduction that you wouldn’t have received before may be just what, you know, tip some people over to helping the small charities. And I’m hoping that that’s that’s true. I’m not sure what type of impact this will have for most people who are probably very fearful right now about where their income is coming from. A lot of unemployment going on right now. And there’s some chairs act provisions that deal with unemployment that we can talk about two. But it’s a scary time, but there will be a time when we’re back. Fundraising. Yeah, this is This is gonna be important, as is the case for a little bit, um, of the wealthier er taxpayer. That is capped by the amount of deductions that can take for charitable contribution. And the traditional cap had been 50% of their adjusted gross income. And if it was a cash donation, the tax cuts and job, Zack said. 60% of your adjusted gross income was your cap of how much you could take for charitable contribution deduction. So if you made $100,000 in adjusted gross income that you were going to report to the I. R. S, you could take up to a $50,000 or if it was a cash contribution to a charity $60,000 deduction off that amount, that was the limitation. This year, that limit is gone. So if you wanted to donate 100,000 of your $100,000 adjusted gross income, you could take a deduction for the full amount.

[00:30:21.51] spk_3:
Yeah, and this is this is a provision that’s mostly for the wealthy. Very few donors bump up against the limitations against there adjusted gross income in in their charitable deductions that it’s not very common, right. But we got some. We got some relief

[00:30:34.24] spk_0:
for older people who may not make very much an income anymore. That’s that’s maybe the primary beneficiary of this. To the extent that they have still disposable income to to provide for charitable giving.

[00:32:03.00] spk_3:
Okay, Okay. All right. We’re gonna leave it there, Gene. Sound good sounds get all right. I want to Thank you very much for doing this. Ah, you know, E. I usually give you a lot more Notice Thio to put a show together. So So thank you. Thank you very much for helping with this special episode. Because I know I know it helps our listeners. That’s that’s really the key. Thanks, Gene. Thanks so much. And I want to remind listeners that were sponsored by wegner-C.P.As guiding you beyond the numbers wegner-C.P.As dot com by Cougar Math and Software Denali Fund Is there complete accounting solution made for nonprofits tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and by turned to communications, PR and content for nonprofits, Your story is their mission. Turn hyphen to dot CEO creative producers Karl Mayer off Sam Lee Woods is the line producer shows Social Media is by Susan Chavez. Mark Silverman is our Web guy and the music you’ll be hearing shortly because it’s hard to put it in right over this when it’s on the fly. Special episode is by Scott Stein of Brooklyn. Many thanks to Sam, Susan and Mark for helping me get this special episode out to you quickly and, of course, to Jean as well for your for your time on fly, Jean. Thank you. You with me? Next time for non profit radio. Big non profit ideas for the other 95% Stay safe and be great.

Nonprofit Radio for February 21, 2020: Hiring Your Audit Firm & Equitable Compensation

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Yigit Uctum: Hiring Your Audit Firm
When it’s time to change your auditors, what do you look for? And how best to work together? I talk through the relationship with Yigit Uctum, a partner at Wegner CPAs.

 

 

Gene Takagi: Equitable Compensation
Gene TakagiIs your compensation schedule fair? What does that mean and why should you care? Gene Takagi returns for a full discussion. He’s our legal contributor and principal of NEO, the Nonprofit & Exempt Organizations Law Group.

 

 

 

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[00:00:14.24] spk_1:
Hello and welcome to tony-martignetti non profit radio. Big non profit ideas for the other 95% on your aptly named host. We have a listener of the week. It’s Debra Elizabeth Finn in Boston, Massachusetts. She shared non profit

[00:00:28.99] spk_2:
radio with her group, Mission based Massachusetts. I’m always grateful to those of you who share the show. If you do, let me know. I will shout you out as

[00:00:38.00] spk_1:
well. Many thanks, Deborah. Thank you so much. Congratulations

[00:00:45.00] spk_2:
on being our listener of the week. I’m glad you’re with me. I’d be hit with Roman. Is, um if you poison to me with the idea that you missed today’s

[00:00:49.97] spk_1:
show hiring your audit firm when it’s time to change your auditors, What do you look for? And how do

[00:00:55.96] spk_2:
you best work together? I talked through the relationship with you. Eat each tomb, a partner at wegner-C.P.As

[00:01:09.51] spk_1:
and equitable compensation. Is your compensation schedule fair? What does that mean? And why should you care? Jean Takagi returns for a full discussion.

[00:01:11.77] spk_2:
He’s our legal contributor and principle of neo the non profit and Exempt Organizations Law

[00:01:47.61] spk_1:
group. And he’s in the studio. Authorities take two planned giving relationship stories were sponsored by wegner-C.P.As guiding you beyond the numbers wegner-C.P.As dot com But Cougar Mountain Software, Denali Fund is there complete accounting solution made for nonprofits tony-dot-M.A.-slash-Pursuant. Martin for a free 60 day trial. And by turned to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen to DOT CEO. I’m very pleased to welcome back to the show and to the studio you coach Doom. He’s a partner at wegner-C.P.As

[00:02:06.41] spk_2:
with over 13 years of experience. He works exclusively with tax exempt organizations. He oversees Wagner’s Form 9 90 nationwide preparation practice and leads their New York City operations. The firm is that wegner-C.P.As dot

[00:02:07.94] spk_1:
com. You know that And at wegner-C.P.As. Welcome back.

[00:02:12.68] spk_3:
Thank you for having your back.

[00:02:13.94] spk_1:
That’s a pleasure. Stand a little closer to the

[00:02:15.72] spk_2:
mike so we can hear you. Yes. There. Thank you.

[00:02:18.34] spk_1:
Um, getting from Madison, Wisconsin.

[00:02:21.16] spk_2:
Thank you. How cold is it? There now is pretty called people.

[00:02:26.03] spk_3:
When I left, it was like like 10 degrees. I don’t know. I don’t pay attention after I leave. Okay.

[00:02:32.36] spk_2:
When it gets below 20 does it matter? And it

[00:02:35.14] spk_3:
doesn’t matter. What

[00:02:35.93] spk_1:
Can you tell that between 10 and zero.

[00:02:38.90] spk_3:
I can You can’t. The marginal difference it is called. It’s

[00:02:42.71] spk_2:
just all called anything

[00:02:45.12] spk_3:
below one of the state f

[00:02:47.84] spk_1:
in cold. Okay, um, so we’re talking about the audit relationship. So first of

[00:02:50.63] spk_2:
all, what? What goes into What are we asking an order for him to do before we get into how to hire them. What is it we’re expecting from an audit?

[00:03:20.94] spk_3:
So, basically from an audit by the professional standards, you expect someone independent to go over your and simple terms like, I’m gonna get technical, go over your accounting records and internal controls, overcome over financial reporting and basic issue. Their opinion based on their all its procedures bedroom, not your financial statements are fairly stated in accordance with generally accepted accounting principles.

[00:03:30.63] spk_1:
Yeah, I know. And

[00:03:31.50] spk_3:
I

[00:03:31.62] spk_2:
don’t have my college accounting class.

[00:03:58.16] spk_3:
Yeah, absolutely. And based on the audit, he also expect some recommendations like they don’t have to give one, but ah, that the relationship is auditors have the expertise working with similar organizations and know the best practices. And if they identify any weaknesses in your systems, they’re also required to report that. But in addition, they also make recommendations as evaluated service.

[00:04:01.79] spk_2:
So it’s much more than just a numerical analysis. Absolutely. You’re talking about going into processes, trains, accountability, etcetera,

[00:04:10.88] spk_3:
right? Absolutely. Yeah. We going to accounting systems, looking at the system’s looking, get who’s involved in certain procedures and what controls are in place and everything. So

[00:04:24.65] spk_2:
meaning board members, senior employees going into those depends

[00:04:27.80] spk_3:
on who were working it, like really small organizations that may be one person organization. Then he would want board the moment as part of the internal controls. If the non profit is large enough, they can have the internal control environment between the organization but typically organizations. Most nonprofits. They’re off a certain small size, and you you want some board government’s involvement in Internal Control says Okay,

[00:05:01.30] spk_2:
and then and then these recommendations. You’re saying that’s based on having done hundreds of audits of similar type organizations. You could make some recommendations, give advice about I could be doing some things better. Absolutely there. I guess they’re okay, but you could be doing things will smarter,

[00:05:14.40] spk_3:
like doing it more efficiently or doing it a little differently and again like that can be some best practice recommendations as well as some recommendations to address certain weaknesses in the internal control system. So that can be two different things.

[00:05:30.04] spk_2:
Okay, so it’s so It’s like including business practices is we’re

[00:06:16.49] spk_3:
losing business practices as well, so we’re not required to his auditors to look at certain things. But people expects us to look at things, even if it’s not part of thought. It se RV makeover some insurance invoices gonna required to make sure that they have enough coverage for certain things. But that’s something that, based on looking at it, such as like external fraud coverage, like looking at the today’s environment. Barry People’s a concert, getting hacked and everything. You may have an insurance policy for cyber security. Let’s say it may cover up to $10,000 with a $5000 deductible. Well, that’s not really very much money, exactly. So if someone, then the may look at that and maybe recommend that you know you may want topped us a little bit by paying just a little in premium. Say another 100,000 premium, you increase that coverage from 110,000 or something like that.

[00:06:29.20] spk_2:
Okay, Okay. So I mean there’s so there’s lots of different areas you can just

[00:06:32.48] spk_3:
a little bit.

[00:06:33.64] spk_1:
Okay. Um, so we have a couple

[00:06:39.89] spk_2:
of minutes before our before our first break? Uhm, why don’t we get into the, uh

[00:06:42.11] spk_1:
oh. I do want to ask

[00:06:43.00] spk_2:
you how long is an audit process that’s based on the size of the farm? Really?

[00:07:00.19] spk_3:
Yeah. Absolutely. Yeah. On the duration depends on how responsive each part iss basically so and so it can very quickly

[00:07:02.05] spk_1:
doesn’t have to be done on site or

[00:07:48.06] spk_3:
it does not have this day and age like out of organizations keep records electronically and it can be them through video conferencing, teleconferences and looking everything online and just document sharing. Yeah, and and absolutely and out off times, man. Dorrit is done on site daughter. They’re sitting in a conference room. Email the client email E Glendale back. So it’s like, you know so. But it’s face to face is good summits depends on preference. A cz Well, so are some people prefer it that pay and there’s advantages and dissidents just off face to face, like onside auditing versus virtual Auditing one is flexibility, but the danger is the order can direct longer if it’s totally virtual. And if both parties will not commit to the timeline. So,

[00:07:53.24] spk_2:
yeah, the timeline and document sharing like responsiveness,

[00:07:57.83] spk_3:
but it does not have to be done on site.

[00:08:08.83] spk_2:
Okay. Okay. Cool. Um, all right. So we got another minute or so before before break. And so I So let’s start to get into what we’d be looking for in a firm, and then we’ll go more detail after our parents just want to be looking for

[00:08:16.64] spk_1:
I think

[00:08:48.37] spk_3:
the number one thing, that’s the most important thing. The expertise and experience. You want a firm that is capable off doing the audit. They have experience working with organizations that ah, have your the same needs. You may be operating under a separate federal grant. Let’s stay and on everything is different. Like just because an organization is a non profit, it doesn’t mean they’re doing the same things. They don’t have the same requirements. I think number one thing is to have the expertise toe do the audit. Okay,

[00:09:03.48] spk_2:
so that’s interesting. Like if your revenue stream is different than a similarly sized organization than the order is going to be very different. You’re saying if it’s your old federally funded versus revenue for service is

[00:09:05.10] spk_3:
or purely foundation

[00:09:10.11] spk_2:
foundation. Okay, so the different character of revenue not just don’t base it on they do audits of organizations that have 20 employees. And that’s about what we have, so that

[00:09:20.17] spk_3:
I know it’s all different. Okay,

[00:09:22.83] spk_1:
okay. All right. So let’s take this first break, which you’re a part of because it’s wegner-C.P.As, which I’m grateful for. So wegner-C.P.As, of course. Thank you. I’m saying all time

[00:09:43.53] spk_2:
forgot. Take their CPS way. No, we’re getting a dick. We’re getting detail about what the audit is, but basically, it’s kind of like a dentist. You get an idea of what? An order what wegner-C.P.As firm does for you. I’m typically saying, start your due diligence at wegner-C.P.As dot com and then pick up the phone because that’s how I like to communicate. But it is going to

[00:09:49.38] spk_1:
talk to you because you know, a partner in the firm, cause serious. So what’s that? If I’m picking up the phone

[00:10:08.10] spk_2:
and calling you and saying I looked at your was on the website, you might help us. We need some help with our, uh 9 90 Wait. I feel like we can’t. It’s beyond our capability doing in house anymore. What would that What would that look like? That call look like

[00:10:34.01] spk_3:
that Cole would look like. Basically, I would be asking some questions. Will identify your needs better on Do we have, like, Haman states? Are you registered then? And kind of try to understand what you have kind of try to understand your organization. And I would liketo look at your previous 9 90 kind of to someone else’s and such. And basically that you know what we can do for you. And if it works out, you will start working together. So

[00:10:41.70] spk_1:
Okay, Thank you. Start your

[00:10:42.09] spk_2:
due diligence at wegner-C.P.As dot com and then pick up the phone.

[00:10:45.04] spk_1:
Talk to you. It’s friendly, guy. I mean, he wouldn’t be on the show. I wouldn’t have it back

[00:10:51.13] spk_2:
if it wasn’t that way. So wegner-C.P.As dot com. Okay, let’s go back. Thio.

[00:10:56.35] spk_1:
So now this is a This is gonna

[00:11:01.03] spk_2:
be our audit. Hiring already firm is an

[00:11:01.34] spk_1:
r f p. Typical in this

[00:11:11.66] spk_3:
kind of peace. Typical. Like I would say 80% 90% off the time we receive an R F P and on. Then the process starts after that.

[00:11:15.16] spk_2:
Okay, how do we, as an organ, decide who to send the R. P too?

[00:11:55.88] spk_3:
Basically, um, ask for references, referrals from from somebody that you trust. So usually ah, it can be the board that may be deciding that. And they may be serving in other other organizations, which they may be familiar with. Their audit firms. Like that might be one thing. The other thing is a lot off firms are now using our source accounting firm that dough there today. Today, accounting. And they may. They work with a lot of water firms as well, and they may give you some recommendations based on your size and such. And or you can go Google firms. Yeah, Lam profits in the year, for example, and see who come up and then send our fees that day. So it’s got multiple ways off.

[00:12:13.56] spk_1:
It doesn’t have to

[00:12:16.45] spk_2:
be local, though. I mean, the point was you could do this. Could be done virtually. It

[00:12:19.26] spk_3:
doesn’t have to be a local. No,

[00:12:20.79] spk_1:
but use your networks

[00:12:21.94] spk_2:
absolutely aboard other CEOs, you know, rather CFO’s. You know, if that’s your situation, you know, use your networks. Okay. Um

[00:12:31.08] spk_1:
are there other sample R f p C

[00:12:41.24] spk_2:
o r. I mean, is this stuff on the web like, all crappy are thes. I mean, how do you develop this R p? Basically,

[00:12:52.84] spk_3:
you can start with a template and there’s a lot off them on stone line. You can point some, but I highly encourage people organizations toe really like first determine why you are looking for a change. Like, what is that you did not like with your current relationship and make sure that how you want that relationship change, make sure that you put those criterion the ft so that you’re looking like you kind of identify your needs and what you’re looking for. What’s important to you.

[00:13:13.84] spk_2:
OK, so, like, of turnover bothered you or fee or timetable?

[00:13:20.44] spk_3:
Absolutely. I think timetable is one of the many reasons by organizations Look for a new firm because the day prior firm are the firm that they use are not meeting their timelines.

[00:13:44.48] spk_2:
Okay? Meaning what? Like the organization should How does how does the timeline get get determined that that the firm may not be, er yeah, complying with

[00:14:26.74] spk_3:
to say, um and you’re an organization and you want to present your audit in June, tow the board of directors. Okay, The audit firm somehow cannot meet that deadline or a lot of times thes here. Some complaints from prospects, they say, Okay, our audit is done. Mother 9 90 doesn’t get done for another six months. So that maybe like a I was look at the tax and the audit as one engagement. Okay, it’s part of one relationship and that maybe time spared the audit is done on time, but then maybe the audit firm are the accounting firm has a separate department that does the tax work your 9 90 maybe that gets late. Guess it. Still, it is also, I think, is the point is like, I know what you want and have kind of like try to think about how you want that relationship to look like and put all those as your criteria in therapy. And as questions about have the firm would address those.

[00:14:50.09] spk_2:
What’s another reason besides the number one timing failures? What’s another reason you see people wanting toe change firms,

[00:15:25.64] spk_3:
increasing fees, and the other reason is if you’re a startup organization or some changes are happening, they say your small organizations. But you have growth plans, and the firm we are working with doesn’t have the expertise that you need as you grow so certain times like the small. When you’re small, you start with one firm. As you get bigger, your niece change and your current form is not able to meet them. And the other part might be responsiveness like you may not. You may be contacting your audit firm, and they don’t get back to you for weeks or, like the relationship kind off way,

[00:15:57.14] spk_2:
will feel that crappy customer service. Right? You are a vendor, you’re providing service. I don’t expect an email back in five minutes, but I think within 24 hours somebody should get back. Even if it’s this is a really busy day, you know? Can we talk later in the week or something? Give me something you’re inviting service something for

[00:16:07.53] spk_3:
the other reason is errors like sometimes errors are made and they don’t get found out until later. And once that’s why not. You know they may wanna change firms because then your expertise is being questioned.

[00:16:16.15] spk_2:
Yeah, How do? How do audit errors get found? I mean, it’s the audit. That’s just be finding errors. How do you find errors in your audit?

[00:16:32.34] spk_3:
Basically, maybe the audits firm missed procedure or Mr An Error that was present in the financial statements, Baby, they didn’t do enough. That’s thing. Maybe something may happen. I mean, that can’t be errors. How

[00:16:35.34] spk_2:
do you just how does the organization discovered the error

[00:16:38.18] spk_1:
It’s got me

[00:16:48.38] spk_3:
discovers in to waste. One is internally. Someone looks at it in a different from a different perspective, or something else comes up, they need to go back. And something doesn’t make sense. For example, today and then you go back and look at previous documents and find out that all this should have been treated differently, for example, and the audit firm did not catch it. Okay,

[00:17:05.89] spk_1:
okay. I’m guessing it’s probably

[00:17:07.13] spk_2:
not a board that often, you know, in in its review of the audit, I don’t see your average board member finding the mistakes in the audit.

[00:17:15.28] spk_4:
Typically not. They

[00:17:17.80] spk_1:
may

[00:17:37.69] spk_3:
find errors in maybe some narrative descriptions and such, but sometimes they do like some some board members are financial is everyday, be sits on the boards. They look at all the financials and they may be finding errors. But those errors are found before the artist gets issued, but still an error. So that kind of like whenever there’s an area that auditor didn’t catch, kindof like damages the credibility.

[00:17:46.96] spk_2:
Right? You’ve submitted it to the board as final. Okay.

[00:17:51.11] spk_1:
All right. So yeah, I mean, some

[00:17:52.95] spk_2:
organizations even have an order committee. Those are bigger non profit maps. Probably the universities, hospitals or whatever. Just a bigger. So they have no other committees, or presumably, yes. Then there’s expertise in that committee to scrutinize

[00:18:11.52] spk_3:
supposedly, hopefully rebuttable presumption in the year. For example, if you are required to have an audit your also required in order to comedy.

[00:18:18.78] spk_1:
Is that right? New York, you have to have an order

[00:18:20.31] spk_3:
committee will have toe.

[00:18:21.25] spk_2:
Okay. And what’s the threshold for an audit in New York? Current

[00:18:28.73] spk_3:
$750,000 in total revenue, assuming you have more than $25,000 in donations from New York.

[00:18:34.88] spk_2:
Okay, 25,000 in donations from New York and and 750,000 in total revenue

[00:18:40.80] spk_3:
or more yet

[00:18:42.15] spk_2:
born What? Right then That’s the trigger for in order to New York State. Yes, And I’m sure it varies widely across the States.

[00:18:48.65] spk_3:
It does. It does not. Every not every state has an audit committee requirement. For example, California has it, but their trash Holt is two million depends. And it’s also all its committed Rules are different in every state. Ho can be on the committee what they have to do. Everything is different. So

[00:19:06.82] spk_2:
you’ll be gratified to know that that Gene Takagi is in background nodding when you said the $2 million.

[00:19:15.74] spk_3:
That’s good to hear. I was right. You’ve indicated? Yeah,

[00:19:19.33] spk_2:
because I certainly don’t have the expertise. Not this question. Um

[00:19:21.34] spk_1:
okay, s so anything else you want to say

[00:19:23.71] spk_2:
about the therapy process before we get to evaluating the proposals that come in?

[00:19:30.86] spk_1:
Um, I think

[00:19:32.96] spk_3:
I think that’s pretty much it again. Like that said yes, you’re a portrait. It toe make

[00:19:37.24] spk_1:
it

[00:19:37.38] spk_3:
like a visual ist like, what do you wish tohave in your audit relationship and kind of go with that?

[00:19:44.16] spk_2:
Okay. All right. So now you get these, Uh, I guess you get what’s a reasonable. Number 44 proposals back or

[00:19:51.03] spk_1:
usually I

[00:20:13.75] spk_3:
see an average off three threes. The most common sometimes Thio. Sometimes more than that. I’ve seen up as much as 10. Yeah. Yeah. So they kind of issue for will not respond And something like that sometimes. Like something like when you center FB you asked, like, Are you going to respond or not? You know, So that’s the wrong questions that gets asked something. So

[00:20:20.75] spk_2:
and then if the firm doesn’t even respond to that

[00:20:23.01] spk_3:
than their low life Yeah, yeah.

[00:20:37.52] spk_2:
Don’t never refer them again. Exact. They don’t respond to your Are you going to respond to our f B question? Okay. All right. So you got you got your 3 to 4 proposals back. What are we doing now? I was looking for I would

[00:21:32.03] spk_3:
actually look for the, um, the overall response process like, are they? How did they respond to your initial when you sent direct appeals? Say, usually, now they come in e mails like, how are they responding to their art? A timely. And when you make appointments, are they late? Are they not late? Like in this stage, like a proposal stage if they’re not giving you the attention. Yeah, on. Very That’s a very bad sign off the overall relationship. I think the first impression, maybe last impression tow the time. So it’s really important to see how they handle things and always look for writing. What’s important relationship is not never make errors. But once you make an error, how do you recover from that? And I think it’s really important as well. And during the process, I think initially they take the time toe, ask us questions and today, or are you just sending like a blanket proposal without even

[00:21:47.09] spk_1:
That’s like asking a couple questions

[00:22:00.68] spk_2:
about what the perp, the R F P, says. That’s a good That’s a good sign. I mean, the firm is actually scrutinizing it. Paying close attention wants to be responsive to exactly what you’re asking. But they’re not sure exactly what you’re looking for, but also, but

[00:22:39.03] spk_3:
also basically see if they’re trying to identify your knees. I mean, you can put so much in writing in the Riviera. Peas are usually standards, and there’s so much else goes on at the firm. Are they trying to like understand? You’re really needs and how they can add value. Are they asking questions? So usually photography. You sent your most recent order to report and your 9 90 and ah, nde sometimes, like, put some description off what organization looks like now. But I think, um, the audit firm should be interested in the organization enough to ask some more questions on Try to learn more, as opposed to just

[00:22:48.29] spk_2:
just giving back the RP. But yeah, by the deadline,

[00:22:50.92] spk_3:
you have just told me in the other budgets for to me in the other speech church this much this is your fetus is the proposal versus taking the time to talk to them and asking questions and see

[00:23:04.96] spk_1:
OK, some engagement, like applying standard a common sense. You

[00:23:33.10] spk_2:
know, if you’re trying to hire a contractor for your home on dhe here, she’s not getting back to you, you know, at the at getting the business stage. That’s a bad sign, you know, or if they don’t seem to be listening to you about what it is you want to do. You know, you’re asking for their ideas and they don’t come back with ideas. They just come back with a fee you know the same. Same as same as hiring a vendor for your your audits facility. No, I haven’t sense, for God’s sake.

[00:24:09.96] spk_3:
The other thing I would look at as have they addressed all your points in the F B. Have they read the appear? Are you getting like a blanket proposal? I think that’s really important to you. And the hurting I would look at would be like, How is the presentation off the proposal like Is that looking sloppy? Are their errors like the spacing looks, beard or just aesthetics off the off? The proposal and errors in it like spelling errors, grammar errors like this? It’s free off errors. I think it’s important. Yeah, spokes. That looks like it’s somebody reviewing them before you send it to you.

[00:24:19.00] spk_1:
Um, what about a presentation? Is that is that typical

[00:24:21.84] spk_2:
toe have? Ah, maybe you narrow it down from 4 to 2 and you want them both to make a presentation to the board. Is that is that an unreasonable? That’s not

[00:25:16.25] spk_3:
unreasonable, And but that does not happen too often than the smaller organizations. Probably your listener base probably doesn’t happen. The presentations doesn’t happen that way. what does happen, though They, uh, there’s like a conference call the Save it with the treasure or the audit committee chair at the accountant or someone just follows up. Let’s say they I don’t. You get three and you eliminate Bond. Now you have the two, and you just have a called them or a meeting with them, but it doesn’t typically become like a formal presentation. But that does happen, though that’s not unusual to ask. Or definitely, I would encourage. That depends on how much time you want to spend, too.

[00:25:21.49] spk_2:
Okay, and then whether you want to get your board involved,

[00:25:24.17] spk_3:
I mean, it’s really hard to get people together. And Monroe

[00:25:28.00] spk_2:
suffered rumors to that effect about how difficult that can be. Um,

[00:25:33.64] spk_1:
you refer to something

[00:25:34.59] spk_2:
called AA Peer Review report on non ordered firms. What is that?

[00:26:23.45] spk_3:
Basically ah, every C p. A firm that does attestation engagements like audits reveals they need to go through a peer review every three years. Peer review is another C p. A firm basically comes in, doesn’t audit off your order to brag or like attestation practice, so it’s not only artistic look at reviews, they look at complications. They look at audits and just to see your following to professional standards and look at the quality off the work. And if you’re not doing good for Earth than you get findings just like you give findings. Oh, non profit organization in your artists. Yeah, the peer review C p a. Firm does the same thing for you. There’s, like levels or findings and such. But typically, I would look for I would definitely request that period the report. Even if there’s findings, you need to know what they are and have the firm responded to them.

[00:26:37.17] spk_2:
Okay, so it’s not something that’s public, but you can ask for it from the firm’s you’re considering.

[00:26:41.85] spk_3:
I I believe it’s public, too. You can go to the I. C. P s website and look for it. I’m pretty sure the American Institute of Certified Public Contents Yep. And find

[00:26:52.87] spk_2:
all the peer review reports for all

[00:26:54.24] spk_3:
the servi. They should be all day. Okay, Okay. But I would just ask for it in the part off the f B and they should put in the proposal.

[00:27:05.99] spk_2:
Okay, We have just about a minute left. Okay, So how about getting started. What? You’re like a number one or two. Top advice for for getting this new relationship off the ground,

[00:27:49.51] spk_3:
I would say, Set the expectations specialty timelines and make sure everyone is on the same page. So I think the dissatisfactions happens when there’s an expectation gap this one person is thinking it’s gonna have on this bay and the other one just don’t assume, just confirm and just have a meeting with thought it firm and come up. It agreed upon timeline. I think it’s really important, and it will work sport they like. If the organization still not provide the information, the auditors cannot do the work. So what we do in every audit, the established time lines, we start with men, they need order to be done by. And then we sent them the list and they can tell us when they can be ready. And then we’ll find time between when they can hear them and they need it done. I kind of like established dead pay,

[00:28:04.93] spk_2:
working backwards from when they

[00:28:06.08] spk_3:
need exact Exactly. So it just always keep the end in mind. Okay,

[00:28:15.78] spk_2:
let’s wrap it up there. Thank you. Very much you do. Partner wegner-C.P.As. The firm is wegner-C.P.As dot

[00:28:17.12] spk_1:
com and at wegner-C.P.As Thanks for coming back to the show and studio. Pleasure.

[00:28:23.62] spk_2:
Having a big thank you You okay? Cracking like a 14 year old, uh,

[00:28:29.10] spk_1:
need to take a break. Wegner. No cook about software. So

[00:28:30.99] spk_2:
what’s all the kinds of Whitney wegner wegner on the head?

[00:28:33.47] spk_1:
Cook a Mountain software is this one quote. We’ve been very happy

[00:28:36.64] spk_2:
with Cougar Mountain. It’s rare to encounter a problem with the software, but they’re always there to help. Walk me through it and

[00:28:42.74] spk_1:
quote that Sally Hancock in Altuna, Pennsylvania. Cougar Mountain

[00:28:46.63] spk_2:
has a free 60 day trial, which you’ll find on the listener landing page at tony-dot-M.A.-slash-Pursuant.

[00:29:17.39] spk_1:
Martin. Let’s do our live love. Ah, and it goes out. Thio Tip of Florida Washington D. C oh, cool Washington Not too often to Washington. Tucson, Arizona, Brooklyn, New York, New York, New York, Ontario, Calif. Ontario, Canada. Um, Seattle, Washington. Awesome. Upper West Norcross, Georgia South east of it Going abroad Moscow, Russia Thank you for being with us. Live love out to Moscow, Seoul, South Korea On your jasio consomme. Nita Live love out there. Tehran, Iran Also, Tehran’s been with us a couple times getting turning it, Theo loyal,

[00:29:41.74] spk_2:
live listeners. So the live love goes out and the pleasantries go out to the podcast audience. That’s our over 13,000 listeners on your

[00:29:45.55] spk_1:
own device, your own timetable, whatever fits into your life. I’m

[00:29:45.79] spk_2:
glad that it does. Thank you very much. Pleasantries to our podcast listeners.

[00:29:53.49] spk_1:
Time for tony Steak, too. Planned giving relationship stories

[00:29:55.60] spk_2:
is the current video that you will find a tony-martignetti dot com because when I did

[00:30:14.64] spk_1:
plan giving relationships, I left. The story’s out. Relationships are with people, and I left the people out of the first video. I talked about how the relationship gets started, the value of long term relationships to your organization and to you personally. And then I left out all the examples, so that’s that’s not I mean, it’s good as far as it goes, but it’s like half the story. If you can talk about relationships, how about some examples? So

[00:30:56.15] spk_2:
in plan giving relationships to the stories I give you some stories of, um, Eleanor and, uh, Evelyn and Barbara and James the before I tell stories about and, uh, you know I’m sure there have been hundreds. Well, there’s definitely 100. But, you know, some people are more memorable, memorable than others. And those are the four that came to mind first. So some touching stories in that video, which you’ll find at tony-martignetti dot com

[00:31:07.05] spk_1:
Now what a pleasure to welcome to the studio. Jean Takagi. He’s here in the studio in New York City. He’s the managing attorney of Neo, the non profit and Exempt Organizations Law group in San Francisco. He edits

[00:31:15.33] spk_2:
the wildly popular non profit law blogged dot

[00:31:24.34] spk_1:
com. He’s the American Bar Association’s 2016 outstanding non profit lawyer. He’s at G Tack. He’s Jean Jean, the law machine. Welcome to the studio, Gene. Too cocky. This is awesome. Done. It absolutely is. It’s 10 years since your first appearance on the show,

[00:31:35.23] spk_2:
and you’ve been a contributor for, like, nine and

[00:31:41.43] spk_1:
1/2 years or something. And here you are in the studio. I love it. Absolutely love it. Thanks so much. I’m so glad it worked out.

[00:31:43.37] spk_4:
I’m so happy to be here. It’s actually my first time in any studios, so it’s Ah, it’s a pleasure,

[00:31:49.80] spk_1:
Your life to your life up to this moment has brought you here. It’s all culminated here. This is the pinnacle. It’s all downhill from here.

[00:31:56.06] spk_4:
Mom can be proud.

[00:31:58.08] spk_1:
Sorry. Going down from here. Now, Um, this is

[00:32:00.83] spk_2:
wonderful. Really Is very, very good to see you. Um,

[00:32:04.67] spk_1:
So, um, this is a This is a little tough, touchy topic. We, uh you and I had a touchy topic

[00:32:10.01] spk_2:
when we talked about diversity equity and inclusion. Um,

[00:32:19.21] spk_1:
this one is, Ah, equitable compensation. Uh, you know, you you frame it for us. You please do. I think we

[00:32:39.13] spk_4:
could look at it in so many different dimensions. Tony mean one is is Do we pay? Everybody is Lois. Salary is absolutely possible, so we can try to serve as many people as possible. And that’s one level one level is we have this huge pay gap between men and women. What are we doing about that? There’s also gaps based on race on and other protected class issues as well. And sometimes it’s not just the legal problem.

[00:32:49.42] spk_2:
It’s not just the protected classes,

[00:32:57.34] spk_4:
right? It legally protected. Yeah, it’s just why are we paying this person differently from this person and is that institutionalized. Is that just personal discretion? Who are the decision makers there? Is there so many levels to this? But I agree can be a very controversial area,

[00:33:30.36] spk_2:
controversial and insightful. These are hard questions, you know? What should the gap be between the highest paid person in the organization and the lowest paid person organization? What should that ratio look like? And how do we justify it? Um and yeah, I I just I think I mentioned it, but I want to make drive home the point that we’re not just talking about classes that are legally protected.

[00:33:32.58] spk_4:
Yeah, I think we go go beyond that. And I think what you said about the highest paid to the lowest paid gap is really interesting. I think for CEOs it’s close to 285 to 1.

[00:33:44.60] spk_1:
Is that average non profits

[00:33:48.15] spk_4:
for for profit companies, non profit? It’s probably better. I don’t know if there’s been a study done on that, Um, but California is considering, Ah bill. Now that says, if your gap is more than 300 to 1, highest paid the lowest paid, typically the CEO versus sort of the average line worker We’re gonna increase your tax anywhere from like 2 to 6% on that. So it’s interesting to see now that the lock take over and say, We don’t like these pay imbalances and this is what we’re going to do about it,

[00:34:23.72] spk_1:
Yeah. How did Attorney practicing in California, How do you feel

[00:34:24.23] spk_2:
about the level of regulation in California? Do

[00:34:30.80] spk_1:
you feel it? You feel it’s burdensome? Or do you? I’m sure it’s. I’m sure you feel it’s right headed, but do you feel it’s excessive sometimes, or or not?

[00:34:37.30] spk_2:
Just like it’s the role of state government Thio make things fair and equitable for everybody.

[00:34:44.29] spk_4:
It’s a tricky question. I

[00:34:45.56] spk_1:
think some of

[00:35:30.68] spk_4:
the intent is is right. So the intent of the A G on the attorney general, typically the charity regulator in California, is to protect donors protect charitable dollars to ensure that they’re not being misused. But the problem can be is when some decisions are made about how regulations should be shaped or what type of bills the E A. G should sponsor or find a sponsor for, um, are they taking a few isolated, high profile problems in creating a solution for that and then that is, in effect creating a huge burden for everybody else who’s never done anything wrong. And what are the pros and cons when you look at its sector wide? And I think they don’t have the expertise or the people power to be able to make those decisions on their own Now, to their credit, they’ve been good about reaching out. We’ve actually sort of consulted with the A G from time to time in working discussion groups about how laws might impact the broader sector. But oftentimes, big corporations are in there here more often than the small Guy

[00:36:07.66] spk_2:
G is reaching out to you right now. They have lobbyists and professionals. Alright, alright, just I’ve wondered about that because it’s an activist state and a lot of states follow the California leader. At least look to see what California’s doing in lots of different lots of different areas. Environment, non profits of its wide

[00:36:10.71] spk_4:
Yeah, well should should add, though, that the non profit activists have actually been very good about this as well. In part, it partly why, when you eat was talking about the audit threshold in New York being 750,000. I think in California’s two million, because the non profit said That’s too low. It’s gonna be too expensive to have audits at that level. So we actually we’re more lenient on that front on the audit.

[00:36:36.18] spk_1:
Okay? All right. So, yeah, it’s not always stringent.

[00:36:46.03] spk_2:
CE stringency greater stringency. But it’s, you know, sort of recognized as, ah, highly legislated ST Ah, highly regulated state.

[00:36:49.07] spk_4:
I think that’s fair to say, and it makes it all the more important for nonprofits to actually speak up. Make sure that their legislators on dear regulatory bodies know what they want. Really important.

[00:37:03.12] spk_1:
So we’re talking about the

[00:37:29.82] spk_2:
compensation way, said it briefly, But again, it merits a little more attention. We’re talking about going beyond what the laws call for me. We have the Americans with disability act. We have the Civil Rights Act of 1964. We have other law bodies of law that govern compensation. But we’re looking as this more at is ah, as a just an equitable ethical moral issue.

[00:37:30.52] spk_1:
Yeah, and even if

[00:37:31.31] spk_4:
it doesn’t violate the law because I’m a lawyer, I always have to say

[00:37:34.44] spk_1:
Well, the law plays

[00:37:35.38] spk_4:
a part because even if you win a lawsuit when there’s an employee claim, just a have a lawsuit against you is incredibly demoralizing. It looks bad to your stakeholders, internal and external. So even if you’re lawfully doing everything right, if you’re ethically having some challenges or your stakeholders stopped believing in, you don’t believe that you’re you’re living into your values. You’ve got much, much bigger problems and just legal ones.

[00:38:03.01] spk_1:
Yeah, you’re trying to do social change,

[00:38:04.55] spk_2:
work social good. But your own organization is unfairly compensated that the salaries are out of whack in your own organization. But you’re trying to improve conditions for the porters or

[00:38:17.14] spk_1:
even if not, if it saves the environment. You’re trying

[00:38:19.23] spk_2:
to do social change, work and improve the state of the world. But your own organization is not a model for that.

[00:38:40.26] spk_4:
That and you can imagine. This gets really controversial when we talk about minimum wage and say, Well, we’re a social service organization that serves low income communities. We’ve got to pay minimum wage for workers. But in a city like New York City or San Francisco, that means they can’t even afford to live in the city right Now I’ve got to commute from the suburbs. And is that really equitable to your staff? Is that what you want to display to everybody else supporting you?

[00:38:50.72] spk_1:
You have this poverty myth, right? There are a lot of

[00:39:16.52] spk_2:
assumptions underlying what we get, where what we’re talking about the inequity on and one of them and then they get deeper. But one of them is this poverty myth that we’re doing social change, work and improving the world. And so, you know, that should be gratifying enough to you. So you get a 40% lower salary than someone doing comparable work. I don’t know another organization or because we feel we feel way can’t afford to pay you more or you get you get a discount from the for profit sector because you’re doing social good work. And that should be gratifying to you. And that has value. So we pay you less.

[00:39:31.73] spk_4:
And it’s really sad to say that actually, some employers, some non profit employers, see that as a legitimate screen that we are going to pay lower than we even can in order to find the most altruistic people possible. I don’t like that kind of idea, but you’ve heard

[00:39:47.22] spk_1:
that articulated.

[00:39:55.47] spk_2:
Yes. Okay, So to find the most altruistic people we’re gonna we’re gonna pay the least. So we’re gonna

[00:40:03.71] spk_1:
get what you pay for, you know? And And what kind of what kind of commitment or you’re getting out of workers who know that there being paid a bottom feeder salary?

[00:40:06.41] spk_4:
Yeah, again, something I strongly disagree with. But that thinking is still still out there.

[00:40:20.07] spk_2:
Okay, I wouldn’t have thought that it would be articulated, but you’ve heard it. A CZ. A theory of recruitment.

[00:40:21.88] spk_4:
Yeah, you’ll hear it in research studies done where they do surveys of organizations, and they explain their compensation systems and you’ll see what some of the rational czar and it pops up.

[00:40:35.01] spk_2:
Okay. All right. We got a couple minutes before break.

[00:40:36.25] spk_1:
Let’s talk about some

[00:40:36.82] spk_2:
of these other cultural assumptions that are underlying cause

[00:40:39.40] spk_1:
this is

[00:41:11.45] spk_2:
where it gets, you know, kind of ah gets unfair. Um, the professional degrees, um, immediately convey or no are automatically convey a value to the organization. So somebody who’s an MBA or an attorney or a c p a. No. Irrespective of whether the professional designation enhances the value. Literally, really. But just way value that over way immediately imply a value to that, even if the job doesn’t require that kind of skill or that kind of professional education.

[00:41:19.15] spk_4:
Yeah, and not to knock professional education.

[00:41:22.54] spk_1:
I got one. You’ve got one? Yeah,

[00:41:24.66] spk_4:
it’s great. But, um, life experience can sometimes be much more valuable or experienced in the job sort of characteristics and duties itself could be more more valuable than professional response are some sorry professional experience in an unrelated field. But so many organizations use education is kind of a factor of where they’re going to set their pay, and they set educational standards that they want when it doesn’t seem applicable to what the job requires. And we see organizations in the four profit world actually leave that thinking, especially in the tech industry, right? They don’t care if you have a graduate degree from Stanford, if you’ve got a bunch of coding experience that’s directly relevant to what they’re creating at the moment. So I think more non profit have got to get away from that thinking that somehow an educational degree in whatever is necessarily going to be something that makes the person more valuable to them,

[00:42:54.49] spk_2:
then the network life experience. Correct. Okay. Okay, um, the, uh the belief that, um, productivity or output is more important than, um the relationship building and how you’re making people feel in the organization and and outside the organization to know, producing paper reports and Versace the ah, the feelings toward the organization that you’re you’re engendering through your work.

[00:43:06.08] spk_4:
Yeah, I think that’s also another danger. Where there’s in the thinking of professionalizing the sector, we’re all about metrics, right? We need to get metrics that we have to get back to our funders to show that we’re creating value. So all of a sudden the employees are incentivized to create better metrics on that may be at the expense of developing longer term relationships. I will actually move the mission forward Maur in the long run than it will in the short run. So we get caught up in the whole same problem that Fortune five hundred’s get caught up in satisfying shareholder spirit. Immediate short term returns, not thinking aboutthe long game. So I think that that is an issue

[00:43:40.56] spk_2:
being too short term thinking for the next board meeting what what our numbers look like for this quarter versus long term value.

[00:43:46.95] spk_4:
Right? Long term value. Also, employee retention being part of that long term value and the value that that having employees stay with you and doing their work, feeling that that sense of pride in what they’re doing, an accomplishment could be so much more valuable than serving an extra 5% meals. In Week three,

[00:44:24.77] spk_2:
we just replayed Adrian, sergeant on relationship fundraising for just last week for a valve on the Valentine’s Day show February 14th and he talked a lot. Now this is just devote to fundraising and where you and I are talking broader. But as it relates to fund raising too many organizations ignoring the lifetime value of a donor, how do you make your donors feel over the long term versus did you get? Did you get a 20% increase in their annual gift this year?

[00:44:36.39] spk_4:
Yeah, and so what do you mean organizational level? And what are you telling your employees? If you say no, you should try to get as much as he can. Now, don’t worry about the long term value of the donor relationships that don’t spend extra time with them. You can hit more people. That’s the wrong message.

[00:44:50.56] spk_2:
Get the car last break. Ever wonder why some nonprofits are always mentioned in the news? It’s because they work to build

[00:45:02.52] spk_1:
relationship. We’re talking about relationships again. I mean, it’s it’s pervasive relationships, Just like last week again, they worked to build relationships with journalists who mattered

[00:45:21.29] spk_2:
to them so that when you pick up when you make a call or you send an email, the journalist replies, That’s because of a relationship. A preexisting relationship. Turn two can help you do that. Their former journalists, including at the Chronicle of Philanthropy. They will help you build meaningful media relationships that can lead to great coverage there. Turn hyphen to dot CEO. We’ve got

[00:45:29.38] spk_1:
butt loads more

[00:45:29.86] spk_2:
time for equitable compensation with Jean Takagi in the

[00:45:36.93] spk_1:
studio. Um, where do you want

[00:45:37.58] spk_2:
to go from here? Uh,

[00:45:44.76] spk_1:
any any other cultural assumptions that annoy the hell out of you? Well,

[00:47:18.32] spk_4:
I I think generally speaking, we think we may be as employers giving people benefits when we say, Hey, we’re gonna give you a plus, you know, added match matching contribution to your +401 K plan, for example. But we may not take into account. A lot of our employees have their own financial issues and may not be able to contribute to +41 K plans, so they don’t get that benefit of all of the match, right? So again, equitable considerations would say, Well, maybe we should open up this benefit so that everybody can access to it has access to it. So maybe it gets put into a flexible spending accounts so they can take care of their elder parents, and not just to their 401 K. Or maybe we give them the cash so they couldn’t pay off a student loan. So things like benefits have a place in this. The other cultural assumptions. To make it, we have to figure out more. And I think maybe the biggest issue for the pay gap on the gender basis, maybe letting people figure out where and when they can work and don’t live on to the assumptions that you have to provide face time. It has to be in the office always because so many people who are the primary child givers who are in the workforce that’s where the pay gap gets hit really, really hard. And that’s where women, who once they once they have child Children and decide that they’re going to be the primary caregiver, which is most of the time relative to the man. You know, that’s That’s where they never recover

[00:47:28.33] spk_2:
their career. Yeah, it’s a downward trajectory for their career. For what, 18 years or something? Conceivably. Okay,

[00:47:28.90] spk_1:
another thes. They’re all

[00:47:30.66] spk_2:
good issues for a conversation in the

[00:47:32.72] spk_1:
office conversation with board. Another one is

[00:47:37.57] spk_2:
the the how percentage increases in in salary perpetuate the gap because you’re giving everybody a percentage of the high or low that they’ve

[00:47:48.78] spk_1:
already got. You’re not. You’re not. You’re not, uh, quill a breaking that a word equalizing, not equalizing. You’re just continuing

[00:47:56.74] spk_2:
the the disparity through percentage, you know, annual percentage increases.

[00:48:30.73] spk_4:
Yeah, and I think a payout. It is probably something that every organization should do and actually just ask themselves. How did we determine what the pay rates are for each of these positions? Ah, and is it equitable? Not just top to bottom, but across, you know. Are we paying one person for the same position so much more than another position, another person, even though the other person might actually be doing better work just because they had more of an educational background. So all of those things need to be looked at? Questioned, I think, tracked. So you’re if you’re gonna make these decisions in the future that are more equitable, you have to be able to explain what factors you’re looking at in order to change somebody’s compensation. And why that and how that’s applied is it applied evenly and doesn’t explain why there’s a disparity now in pay between two different people or three different people who occupy the same position.

[00:48:56.37] spk_2:
Um, you can create in your organization a pay equity team.

[00:49:04.22] spk_4:
Yeah, that’s yeah, I’m on the board of an organization called Compass Point in San Francisco.

[00:49:07.61] spk_2:
In a point to that article shortly

[00:49:54.01] spk_4:
Terrific and, yeah, having an removing the decision making from just one executive director, but who might set the caps just to make sure that there’s no overcompensation involved in that the budget is being complied with. But having an equity panel within the organization made up of peers, um, looking at self evaluations and trying to determine what the compensation rates should be within again. A permitted range. Think that’s a really great form of distributed leadership where you’re giving more power to your team, um, and letting them decide what the compensation rates can be now. There were definitely some cons to that issue as well. With more responsibility, there’s gonna be more criticism. But we found out that that it can work really, really well. And people sometimes are actually more conservative about what they want to give than the executive director. And then just having a conversation about that, um, can can be very helpful. But it’s ah, it’s a really interesting a strategy to employ for some nonprofits who have reached that level of, ah, evolution, if you will, in inequity considerations.

[00:50:24.40] spk_2:
Compass point, um, walks through. I think it’s the interim executive director wrote The Post’s Walks through there. I guess it was a three year process. Was it a three year process there of evaluating and adjusting pay throughout the organization, I think, was a two or three year process. It’s

[00:51:15.93] spk_4:
actually been ongoing since 2016 which is really when it started, and it’s still it’s still an ongoing and sometimes a painful process of making things more equitable as you raised the issues and surface them there. You know there’s some pains. You find out some inequities of the past and you try to correct them. And some people are happy about that. Some people aren’t on and you know, the intersectionality of different ah issues if you well, it’s not just gender. It’s not just ages, not just race. There’s so many issues to think about in determining whether compensation is unfair or fair. Andi can be interpreted in different ways, so it is a challenge. But having a team there to help decide this instead of one person makes

[00:52:26.44] spk_2:
a huge difference, also empowering as well. And you know it defeats this myth that we can’t talk about pay at work because everybody’s pay is now known to the to the, uh, to the Pay Equity committee, the team that you’ve just created. So we are talking about it. I want to point people to the this article. It’s it’s actually two different block posts at Compass Point dot or GE on their blogged. It’s called reimagining compensation. It’s time to stop building inequities in the past from the past port. Wanting to Andre is very open about the difficulties that they went through and some people got very large increases. And she alludes to even there, being some decreases over time in salary like stage decreases, Thio make things fair and equitable. It’s quite a process we talked about. Yeah, and I

[00:52:49.76] spk_4:
think you know that’s a team decision. People have to look at this from a state law perspective as well. And so you have to be careful. Not Thio, through mandatory action, decreased one person’s salary to raise another. You have to be careful about that. So we had the luxury of having some change capital because the foundation was really supportive of what we did. And so here’s a big shout out to foundations for for unrestricted support, it really can do great things for for creating equity within an organization.

[00:53:03.75] spk_1:
Um, let’s talk some

[00:53:04.64] spk_2:
about, uh, well, the board. The board has a role here, too.

[00:53:22.97] spk_4:
Yeah, I think I’m still even when we talk about distributed leadership, which I mentioned before, the board still sets the tone at the top. Um, and I think it’s really incumbent upon the board to actually set the values of the organization. So it makes sense that not only are organizations acting to further the mission, but they’ve got to do it in a way that furthers their values as well.

[00:53:38.25] spk_2:
A cz part of their oversight on

[00:53:43.34] spk_1:
and really they’re there. Yeah, their responsibility to

[00:53:44.69] spk_2:
the organization. I’m taking it out of the fiduciary capacity and just making it, Ah, moral obligation that they have to the organization.

[00:54:09.96] spk_4:
Yeah. It’s not just about looking at the financials and saying, Can we survive another year? It’s It’s about creating the relationships, as you said, to make this the sustainable organization that lives its values and furthers its mission for a number of years so it can really actually drive through what they’re trying to do.

[00:54:11.29] spk_2:
Okay, we have about another minute or so before we gotta wrap. So, what would you like to whatever not talked about that? You want to say what?

[00:54:20.07] spk_4:
Um well, they’re a couple things, so I’m gonna leave the parking tax issue aside, then.

[00:54:26.26] spk_1:
Oh, I forgot. The host is so lackluster. This show it’s unbelievable. I don’t know why people listen. The hostess so crummy. Um, yeah, the all right next time we’ll get that next time. This is just about him. Report. God the hostess

[00:55:26.85] spk_4:
So crummy. Um, so I guess along the lines here some tips, maybe of creating more of an equity based compensation system within an organization. And I think, first audit, audit the organization. Try to figure out why you’re paying a tw what level? I have a board level awareness of what’s going on. I’m create a pay equity panel numb within your staff levels. Um, and take a look at where the disparities happen. Most often are the book benefits that I told you about, like the 401 K, but also in bonuses on dhe. We find that our studies have found that that bonus is often goto white men at the much different level than persons of color, especially women who are persons of color.

[00:55:34.29] spk_2:
All right, Thank you, Jean. Thank you very much. Opening up this topics. He’s managing attorney of neo, the non profit exempt organizations Law group. You’ll find him at G Tack and today you’ll find him in the studio in New York City. So glad to have your gene. What a pleasure.

[00:55:44.66] spk_4:
Thanks so much tony and great

[00:55:50.82] spk_1:
to see you, Sam. Yes. Next week. Get to the next

[00:55:52.47] spk_2:
level with Sherry Kwame Taylor. If you missed any part of today’s show, I beseech you, find it on tony-martignetti dot com

[00:57:01.32] spk_1:
were sponsored by wegner-C.P.As guiding you beyond the numbers. Wegner-C.P.As dot com by Coca Math and Software Denali Fund Is there complete accounting solution made for nonprofits tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and by turn, to communications, PR and content for nonprofits, your story is their mission. Turn hyphen to dot CEO. Ah, creative producers Claire Meyerhoff Sam Liebowitz is the line producer. Shows Social Media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scott Stein Do with me next week for non profit radio big non profit ideas for the other 95% Go out and be great talking alternative radio 24 hours a day.

Nonprofit Radio for December 20, 2019: Impeachment, Say What? & #SaveDotOrg

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Gene Takagi

Gene Takagi: Impeachment, Say What?
What’s your nonprofit allowed to say about President Trump’s impeachment and potential removal from office? What about the 2020 election? What’re your employees allowed to say, where and when? Gene Takagi has the answers. He’s our legal contributor and principal of NEO, the Nonprofit and Exempt Organizations Law Group.

 

 

Amy Sample Ward

Amy Sample Ward: #SaveDotOrg
There’s a possibility that management of the .org domain will be privatized. The #SaveDotOrg movement thinks that’s a bad idea. NTEN is part of the opposition movement and Amy Sample Ward explains why. She’s our technology and social media contributor and CEO of NTEN.

 

 

 

 

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[00:00:12.14] spk_1:
Hello

[00:00:41.93] spk_2:
and welcome to tony-martignetti non profit radio. Big non profit ideas for the love, their 95% under aptly named host. Oh, I’m glad you’re with me. I’d turn extra tropic if I saw that you missed today’s show. Impeachment. Say what? What’s your non profit allowed to say about President Trump’s impeachment and potential removal from office? What about the 2020 election? What do your employees allowed to say, where and when? Jean Takagi has the answers.

[00:00:43.68] spk_3:
He’s our legal contributor and principle of neo the non profit and exempt organizations Law Group,

[00:00:51.04] spk_2:
then save dot or GE. There’s a possibility

[00:00:53.45] spk_3:
that management of the dot org’s domain will be privatized. Save dot org’s movement thinks that’s a bad

[00:00:59.84] spk_2:
idea, and 10 is part

[00:01:01.88] spk_3:
of the opposition movement. And Amy Sample Ward explains why she’s our technology and social

[00:01:06.93] spk_2:
media contributor and CEO of 10 on tony Steak, too.

[00:01:14.04] spk_3:
Thank you for 2019 were

[00:01:14.24] spk_2:
sponsored by wegner-C.P.As guiding you beyond the numbers wegner-C.P.As dot com. But Cougar Mountain Software Denali

[00:01:54.24] spk_3:
Fund is there complete accounting solution made for nonprofits tony-dot-M.A.-slash-Pursuant Mountain for a free 60 day trial and, by turn to communications, PR and content for nonprofits. Your story is their mission. Turn hyphen to dot CEO, and I’m hoping that we’re gonna welcome Jean Takagi back. Do we have him? We’re trying. OK, uh, he’s in. Is he in the conference? Okay, we’re trying to call the conference, so I don’t know. Gene probably cannot hear us. So what we’re gonna be talking about is, um,

[00:02:02.93] spk_2:
some some stuff on, uh, what’s permissible

[00:02:37.85] spk_3:
for 501 See three’s to talk about, um, whether it’s around impeachment or the election election earing things like, Are you allowed to host a candidates forum? Candidates debate. Um, what about promoting issues versus candidates? What do your employees allowed to do? And that’s Ah, that’s what we’ll be covering. We’re gonna

[00:02:38.21] spk_2:
do Jeanne Jeanne! Jeanne! Jeanne! Jeanne! Jeanne de la machine. We got him. Jean Takagi is the managing attorney of Neo,

[00:02:44.28] spk_3:
the non profit and Exempt Organizations Law Group in San Francisco. He edits the wildly popular non profit law block dot com and is the American Bar Association’s 2016 outstanding non

[00:03:02.08] spk_2:
profit lawyer. He’s at G tak. Welcome, Jean Jean. Great. Ah, great to have you. I know you were there, but we were having

[00:03:04.94] spk_3:
trouble getting in. But now we’re now we’re in, You’re in and we’re

[00:03:12.26] spk_2:
in and s so it’s a very communal Wonderful Are you doing out there? Looking forward to holidays? I’m sure

[00:03:15.50] spk_5:
I am. How about you turning

[00:03:17.13] spk_2:
very much? Yeah. I love this

[00:03:18.50] spk_3:
time. Uh, we have a couple of weeks off from the show, and I have nothing scheduled for a couple of weeks. So, uh, it’s

[00:03:25.47] spk_2:
good time, too. I mean, I’ll be working light work light, I guess. And good time.

[00:03:30.99] spk_5:
Same way.

[00:03:31.64] spk_3:
Yes. Excellent. Good for you. And

[00:03:33.71] spk_2:
good time for reflection.

[00:03:38.44] spk_3:
I think on the new year, I like that you have any, uh, any goals for Ah, 20

[00:03:42.73] spk_2:
20 that you want to share or anything exciting coming up in 2020.

[00:03:53.29] spk_5:
Really excited. My partner, Aaron, Brad, Rick and I are going to be teaching a course at Columbia University starting in January, so we’re really looking forward to that in their non profit a management program.

[00:03:59.50] spk_3:
Wonderful is not gonna bring you to New York or you teaching virtually.

[00:04:03.29] spk_5:
We’re teaching online, but we may make out a trip itude in New York

[00:04:07.89] spk_2:
trip or two. But you gotta let me know. Of course.

[00:04:10.12] spk_5:
Absolutely.

[00:04:16.83] spk_3:
I mean, unless you want Oh, yeah. I hope you don’t want to stealth in and stealth out. Not not. Talk to me. I certainly wouldn’t do that if I were visiting San Francisco again.

[00:04:20.94] spk_2:
Um, okay, so let’s start with the most timely.

[00:04:30.74] spk_3:
Um, President Trump was impeached two days ago in the U. S. House of Representatives. Um,

[00:04:31.72] spk_2:
what’s, uh what can we talk about?

[00:04:33.38] spk_3:
If we’re 501 c three around that

[00:04:48.90] spk_5:
Well, it’s a great question and, you know, because they’re different types of 501 see threes and different types of non profit. I should make clear that we’re only talking about public charities here. There’s different rules for different other types of organizations, including private foundations for public charities. There’s quite a lot they can talk about.

[00:04:56.93] spk_2:
OK,

[00:04:57.64] spk_5:
we should also differentiate between impeachment, which has already happened, and the removal from office, which is still going to be a matter of legislative action, specifically a supermajority vote by the Senate whenever they get that before them.

[00:05:11.85] spk_3:
And

[00:05:12.57] spk_5:
I know that’s related issues.

[00:05:16.20] spk_2:
Okay, uh, because there go ahead. Yeah. So Well, why? Why? Why do we

[00:05:21.09] spk_3:
distinguish between those two. This is a big

[00:05:24.51] spk_5:
authority happened,

[00:05:25.38] spk_2:
Yeah,

[00:05:32.43] spk_5:
so because it’s already happened, you know, charity are fairly free to comment on

[00:05:33.34] spk_2:
that action. They’re

[00:06:33.93] spk_5:
also free to comment about how they feel about governmental leaders in doing their jobs. And, you know, it might be really important to do so in the context that it may really impact the charity’s mission. And, you know, for example, I would think that charity to mission is to end hunger, for example, for for American suffering from poverty. They might have a great deal to say about the administration’s rule to end food stands for like about 700,000 people. You know, the 700,000 people are making, on average 2200 and $50 a year. And if you want to comment on that at a charity, that’s okay the same way you can comment on the impeachment whether you think that that was proper or not. But what may not be okay if you’re gonna be talking about the electability of that person for or in any way talking about the upcoming election so you can talk about impeachment in and of itself on dhe. Whether it was, you think it was right or it was improper. But you can’t start to talk about, um, or start to influence the upcoming election. So that’s a little bit of a fine line. Thio. Walk on

[00:06:58.93] spk_3:
okay, and we’ll get to the election and election hearing. What about the coming potential removal from office, The trial in the Senate and, you know, advocating one way or the other for what you think. The Senate, your organization thinks because we’re talking about the organization level, we’ll get. Individual employees will get to that, too. But what your organization thinks about removal from office.

[00:07:14.68] spk_5:
So you know, there’s no absolute guidance from the i. R s on the impeachment of the president. Surprise. But, um, there’s It’s generally thought to be attempting to influence the legislative action inaction by the Senate.

[00:07:26.24] spk_2:
The mall’s

[00:07:51.21] spk_5:
within the tax laws, definition of lobbying and not political campaign intervention. So we know that there’s an absolute bar to, um, you know, endorsing or supporting or opposing candidates for public office. That would be election hearing in that not allowed by any type of 5 23 but public charities are allowed to engage in lobbying so long as it’s considered not substantial, and commenting on a potential legislative action like the removal from office action that will fall before the Senate would be considered lobbying. And to the extent that charity can lobbying and there are some limitations involved, the charity would be free to do so. But again, it has to walk that fine line because we are coming up to an election year on. Dhe has to look like it’s not trying to influence the election itself. So you don’t really want to talk about other candidates for office or on the general overall qualities of Trump as a candidate for another four years. But you want to talk. If you want a charity, you want to talk about the removal from office specifically about what, before the Senate. Why, why would he be removed from from the office? So you’re really took ing taking a look at those two articles of impeachment and commenting on the merits of those articles?

[00:09:02.54] spk_3:
Okay, understand? We need to take our first break when we come back very shortly. We’ll, uh, well, we’ll talk more about lobbying and what’s allowed, not allowed there. And, uh, we’re taking a break for, um, for wegner-C.P.As. Of course, in the new year, might you need a C p. A, whose service is excellent, who provides clear directions and timetables and who’s easy to work

[00:09:10.88] spk_2:
with. That’s not me talking.

[00:09:22.82] spk_3:
That’s from the testimony. Old. That’s not my opinion. That’s, Ah, the opinion of someone who’s worked with not with wegner in the past, a CZ you’ve heard the past few weeks. So if you

[00:09:26.02] spk_2:
do talk

[00:09:39.50] spk_3:
to partner, you eat each tomb. He’s a good guy. No pressure wegner-C.P.As dot com And now let’s go back to Jean Takagi and Impeachment. Say what? Okay, we’re

[00:09:39.89] spk_2:
allowed to do some

[00:09:56.68] spk_3:
lobbying, you said, as long as it’s not substantial. Uh, how do we measure substantiality? Substantial ability. Substantiality substantiality. I think it’s I think that’s what This How do we make whatever helps called Republic

[00:10:33.26] spk_5:
charities there Two ways to measure it? Sort of. The default way is just what the law cost backs and circumstances, and that leaves it up to the Iraq to determine whether you’ve engaged in too much lobbying or not. And if you want to challenge it, ultimately, a court and nobody really wants to go down that route. So, you know, professionals typically uses guidelines. You know, there was this old case that said, you know, 5% of your resource is that should be okay that, you know, anything under 5% should be okay. You want to think about your expenditures, your volunteer time? You know the amount of publication space you’re giving all of those things. If it’s about 5% or less of your resource is you’re probably not too worried about exceeding the lobbying threshold under that backs in circumstances.

[00:10:42.37] spk_3:
Okay, Yeah. 55 percents pretty low.

[00:10:46.35] spk_5:
Yeah, it’s pretty low. Um, but, you know,

[00:10:48.39] spk_3:
for some

[00:11:26.97] spk_5:
organization, that’s all they want to do. But you know, the better choice for the vast majority of charities. And I would say, almost the no brain and choice for charities that are not churches who are ineligible to do this but share other charities that are eligible to make the 5018 lobbying election. I’m. And that that is just a basically 1/2 page born where you put name, address and check a box on it. If you make that election of the charity which could do it any time at all. Um, you get thio, measure your lobbying strictly by your lobbying expenditures, and the limits are just so much more generous.

[00:11:27.98] spk_3:
Okay,

[00:11:28.59] spk_5:
so it’s 20% of your 1st $500,000 of what they call exempt purpose expenditures or mission related expended

[00:11:36.12] spk_3:
choker.

[00:11:36.75] spk_5:
20% of that

[00:11:40.62] spk_3:
100 $100,000 right there and it’s it’s deemed non substantial.

[00:11:46.76] spk_5:
Yeah, yeah, And there’s a separate limit for grassroots lobbying, which is lobbying a different type of lobbying, where you’re not going straight to a legislative body or an employee or member of the legislative body. But you’re going to the public and you’re asking them to contact a member of the legislative body and you have a called action included in that. So if it’s grassroots lobbying, it’s 25% of that total lobbing limit.

[00:12:11.99] spk_3:
But

[00:12:51.64] spk_5:
expenditure limits under Bible one h are much, much more generous than that 5% kind of rule of thumb that we look at the other time again. Um, a big, big tip for any public charity that wants to, um, discuss the removal from from office, um, stay positions on that before it gets to the Senate or wallets in the Senate, the 501 each election could made and be made any time. And it will be effective for the year. And would you make the election? If you decide you don’t want to, you know, continue electing it. Which might be the case for super big charities. Um, where the 5% could actually be, You know, a lot of money you could, you know, revoke your election that anytime after as well by just filing the same form and checking a different box. So a no brainer election for most public charity.

[00:13:00.35] spk_2:
Okay. Okay. So and we’ve talked

[00:13:15.52] spk_3:
about this before. I was probably the April 2016 which was the last election year. Um, you and I talked about advocacy generally, and I think the 501 h came up then. So you’re still a five. A one c three. You’re just making this 501 h election for the year.

[00:13:23.94] spk_5:
Right? So

[00:13:24.75] spk_2:
what do you

[00:13:25.08] spk_5:
make it?

[00:13:25.49] spk_2:
Your sort

[00:13:26.16] spk_5:
of permanently on that until you revoke it. But all it does that 501 age super easy election to make this thing. We don’t want to tell the IRS everything about our lobby. We just want the IRS to measure our lobbying on what was spent. We don’t want to try to estimate volunteer time How much of our office space is dedicated to lobby? We just want to tell them exactly what we spent and recorded on our financial for a lot. So, so much easier to report, so much easier to track. The limits are much easier. And if you violate it, if you go over the lobbying limits without the election, that facts and circumstances test.

[00:14:00.03] spk_3:
Yeah,

[00:14:00.37] spk_5:
you violated in any one year, you can lose your Bible. One secret that

[00:14:04.58] spk_3:
Okay,

[00:14:04.93] spk_5:
But if you make the election, you have to violate it over a four year period, not just one year, but over a four year rolling calendar. And then you have violated by more than 50%.

[00:14:16.61] spk_3:
Wow. Okay, so that

[00:14:18.03] spk_5:
that’s just so much more advantageous.

[00:14:39.09] spk_3:
It is sort of a no brainer. And for those much generous, much more generous limits. Okay, cool. All right. 501 inch. Thank you, G. Um, what about our our individual employees? What are in terms of what resource is they’re using when they speak, when they when they speak publicly? What? What are the rules around employees?

[00:15:56.92] spk_5:
Well, you know, first thing to recognize is is individual tax First Amendment rights, right? So they have the freedom of speech. They have the freedom to say whatever they want. Charities shouldn’t control what you know their employees or their directors or officers are saying in their individual capacity. But they should control what they’re saying as representative speaking on behalf of the charities. So there’s that distinction to make so again don’t control what you know your your employees and your staff members and volunteers are saying about impeachment or removal or any other wegner slate of action or political endorsement. But make sure that they don’t use any charity. Resource is in doing so, and that’s really important. Don’t let them use their work email address. Don’t let them use the work. Tell a boat. Don’t let them perform those activities. If they’re, they’re, you know, working on campaigns in the office and the charity’s office. And if they should put their name on with the name of their employer, which is a charity on like an endorsement list of a political candidate. Make sure that there’s some sort of Astra’s back says that the name of their employer is only listed there for identification purposes and doesn’t represent an endorsement by the charity itself.

[00:16:22.14] spk_3:
Okay, Okay. Um and so what? What employees do on there personal time and their personal Facebook Twitter email all all, uh, really of no concern to the to the charity.

[00:16:28.54] spk_5:
Yeah, but social media is actually a good point about hitting that gray area, tony, because you probably follow your twitter, tony. So you

[00:16:37.06] spk_2:
probably follow you

[00:16:42.79] spk_5:
individuals who are on Twitter who have both their name and their charity affiliation like listed?

[00:16:46.34] spk_2:
Yeah, in

[00:16:55.29] spk_5:
their account, it might be in their Twitter handle, or it might be in their short bio underneath. You know, the Twitter handle. And that’s where it becomes kind of tricky. Who does that Twitter handle belong to? Does it belong to the individual or doesn’t belong to the charity And could the chair to get in trouble if there is a political endorsement or a statement of opposition to a candidate for public office?

[00:17:12.21] spk_2:
Yeah, I always

[00:18:04.09] spk_3:
have presumed. Although I’ve never followed upto see whether my presumption is, uh is accurate that someone who has the charity name in there either in their handle or, as you say in their short Twitter bio, has another account that doesn’t talk about the charity, Asai said. I never have investigated to see whether they do or not. I’m following their charity account. Um, so maybe maybe people don’t. But that would seem like the better the better practice. And especially if, I mean, shouldn’t that be in a, ah charities social media policy that if you’re going to use the charity name, you know, there are prohibitions around what you can do with that and then and we encourage you? Or we insist that you have, ah, private well non A non charity Twitter account for all other all other non work purposes.

[00:18:56.44] spk_5:
Yeah, conservatively. You know, I kind of like that type of policy, tony. But for practical purposes, it’s kind of like our president or or Hillary Clinton when she was running, separating their kind of personal accounts from their work account. Um, there they are co mingled all the time, and not just by charities and their employees, but by four profit in their employees, so disclaimers can work outright prohibitions and requirements that they have a separate, Um, a Twitter account or face social media account may be helpful at times, but often times you know they’re just going to combine the two. So, um, just be careful about that one thing about, you know, sort of the election hearing prohibition that you can’t endorse or oppose the political candidate. One thing did note is that the Republican Party platform and President Trump himself said they really don’t like that Prohibition often referred to as the Johnson

[00:19:14.09] spk_3:
and Johnson

[00:19:14.70] spk_5:
talked about that before.

[00:19:16.87] spk_2:
Well, they

[00:19:17.05] spk_5:
want to get rid of it, although most the vast majority of charities. And I think the mast majority of churches. I don’t want to get rid of it because I could turn all charities into these election vehicles for where donors say, You know, I’m not gonna give you this donation unless he said a message to all of your members and donors of, you know, in support of a political candidate, and that would suddenly be okay.

[00:20:05.12] spk_3:
Yeah, that’s we’ve been talking. We talked about that. Probably when it around the time it first became a proposal, or at least well, I guess it’s been in the platform. The party platform, you’re saying. But there was some There was more talk about it, I don’t know. A year and 1/2 for two years ago, and we, you and I discussed the Johnson Amendment. Um, it hasn’t happened. Maybe because of the nonprofit community opposition. What what’s your scent? You were you were monitoring that very closely. What’s your sense of where it stands?

[00:20:57.67] spk_5:
Yeah, you know, I think the non profit community’s opposition was very, very helpful in that there were there were others who were opposing it. A CZ well, with a matter of policy. And I think as people got more educated about it, it became less and less popular. Um, it was a way for dark money. T sort of enter into the political system where we didn’t really know where the sources were in. People were getting tax deductions on top of it. So it’s something that be really bad. But the reason why I brought it up here is because if an organization wasn’t quite sure, it was speaking out on impeachment or removal from office, and you know we may be crossing that line. Well, conservatively, I would say, Yeah, the closer we are to election time, you’ve got to be careful even within the bounds that I said that it might be a lobbying activity and not, uh uh, banned political campaign activity. But closer do you are to election that could turn into what looks like a political campaign activity. If you’ve never spoken about the impeachment itself, and you just never it looks like your charity was never interested in the issue until just like, you know, a few months before the election with the

[00:21:25.32] spk_2:
happened that

[00:21:48.92] spk_5:
looks like this casted election hearing communication. But overall, I’m not sure that the I. R s and the current executive branch is really that interested in enforcing the political prohibition laws because, you know, doesn’t resonate with what their messaging has been. Maybe a little bit risk. And it would have been for four years ago.

[00:21:49.85] spk_2:
Okay? Yeah. You still

[00:21:56.54] spk_3:
want to err on the side of caution, right? I mean, I, you know, because they there could be some exception to their enforcement activity or priorities or something. So but

[00:22:01.99] spk_2:
you’re you’re the

[00:22:11.33] spk_3:
conservative conservative guy, at least in terms of legal legal advice of the legal advice side. You know, um, least that’s Yeah,

[00:22:13.26] spk_2:
that’s always been your You. You’ve always been cautious

[00:22:15.77] spk_3:
about advice you give. Yeah,

[00:22:41.47] spk_5:
Yeah, I think when we have a lot of smaller to medium sized organizations amongst the client, there’s just less risk capital, you know, private foundation with, you know, $10 billion might have a little bit Arjun for taking a risk and maybe fighting it in court if they felt like the I r s sir. Uh, neutrino general not correct in their interpretation of whether a lot was violated. But for most small and medium sized charities, they can’t afford to have that battle.

[00:22:49.70] spk_2:
We’ve been

[00:23:15.61] spk_3:
talking mostly about candidates. You mentioned a little bit about issues, but let’s make issues issues clearer versus candidates. Are you saying that if you’re non profit now, as an organization has has been following an issue for a long time and not just doesn’t just start commenting, you know, 60 or 90 days before an election, then eyes that part of the facts and circumstances test for people who don’t for organizations that don’t take the 501 h election. Is that Is that one factor?

[00:24:01.94] spk_5:
Well, just commenting on issues themselves, it was If it isn’t stating a position on a piece of legislation, you’re free to do that all you want. So if you’re educating the public about a particular issue, whether it be climate change or, um, you know, immigration, um, you couldn’t talk about broader issues and educate the public. You know, if you’re giving material facts and you’re doing it in a non part of objective and fair manner, that that should be sort of a fundamental thing of what you do if it’s gonna help further your mission. But when you start to comment on a particular piece of law or legislation and say, you know, this is either a good piece of legislation or this is a bad piece of legislation

[00:24:11.27] spk_3:
or this

[00:24:11.70] spk_5:
new legislation that we need now you’re entering into the realm of lobbying and subject to those limits that we just discussed the 501 h limits or the the facts and circumstances with

[00:24:26.22] spk_4:
Okay. Okay. Um,

[00:24:28.72] spk_2:
you still there, June? I am okay. Yeah. You

[00:24:41.39] spk_3:
Ah ah, word or a syllable at a time seems to pop out, and then it got quiet. So I I, uh I got concerned. Okay, You’re still with us. All right. Good. Um, thank you for flushing that out.

[00:24:43.22] spk_2:
What else? What else

[00:24:44.49] spk_3:
do you think listeners need to know?

[00:26:06.27] spk_5:
Well, there are all sorts of other things that public charities do around election time. Um, you know, they can’t endorsers support any candidates for public office, But the concert, we engage in voter registration and get out the boat drives. You see that all over the place, and you’re gonna continue to see it over the next year. So a CZ longer again there, you know, conducted in the neutral, non partisan matter without reference to, you know, any of the specific candidates or political parties, you can host a candidate debate or forum. I think many of you have seen those, uh, you know, hosted by a public charity. And again, the purpose of the, uh, debates reform should be for educating the public. So you have to be very careful about not doing it in a partisan man is not with leading questions or a selective choice of topics that that might influence the public one way or the other. Be careful about your selection of moderators and how you comment on the candidate’s response. Yes, I want to be careful about the time allotted to each candidate. You know, it would be very wrong if you allowed just one candidate. If there is, it just came down to the presidential race, for example, and you let one party’s candidates speak for 90% of the time and the other candidates to be 10% of the time. It will be pretty clear where that charity is leaning.

[00:26:28.95] spk_3:
Okay, So to borrow the old Fox News motto, you need to be fair and balanced, but not fair and balanced like they were where a court ruled that they were de facto, not fair and balanced. Need to be really fair and balance. I think

[00:26:29.39] spk_5:
that’s that’s right,

[00:26:30.53] spk_2:
and and

[00:26:35.50] spk_5:
obviously a charity will have its own mission statement to think about. But they’ve got a sort of put it in their back pocket a little bit when they’re designing those type of debates. Reformed Also, voter guides, Kennedy questionnaires, um, also permissible and even candidate appearances. If you’re providing equal opportunity for all candidates, you see that on television is Wow.

[00:27:05.64] spk_3:
Okay. Okay. Um well, we have just about a minute or so left. Uh, what? Ah, what do you want to leave us with for the for the year on this topic?

[00:27:17.93] spk_5:
Well, I think I’ll just say I think people should be really active in their advocacy. In furtherance of their mission. There are a few resources that are out there. Board sources stand for your mission. Campaign has some excellent resource is on the Alliance for Justice gives you more than mechanics of what I’ve been talking about. What type of advocacy, What type of lobbying, what type of political activities public charities could do on. There’s some nuances to all of this. There’s another layer of election law that may be on top of all of the tax law we’ve been talking about. So those resources are good places to go and go ahead and advocate as much as you can for your mission.

[00:27:58.17] spk_3:
Junior. So modest. Another very good source is non profit law blawg, which is at non profit law blogged dot com. And Jeanne, I wish you lots of

[00:28:01.34] spk_2:
let’s of enjoyment, lots of good time.

[00:28:03.07] spk_4:
Uh, I

[00:28:03.64] spk_3:
hope you enjoy your holidays and the New Year

[00:28:07.14] spk_5:
Happy holidays to you and your family. Tony,

[00:28:28.89] spk_3:
thank you very much, Gene. It’s a pleasure. And thank you so much for what you’ve done for 2019 and what we’re looking forward to. In 2020 he’s Jean Takagi, my pleasure, managing attorney of Neo, the non profit and Exempt Organizations Law group. He edits that non profit log log, and he’s at G Tak. Now it’s time for a

[00:28:33.08] spk_2:
break. Cougar Mountain software designed from the bottom up for nonprofits The same nonprofits we’ve been talking about, the ones, the ones we all know. Non profit radio, for God’s sake. What does that mean For you?

[00:29:00.64] spk_3:
That means fund accounting. No more spreadsheets to manage your restricted grant funds. Also fraud prevention and exceptional customer service. You’ve heard all that in the testimonials. Cougar Mountain has a free 60 day trial on the listener landing page at tony-dot-M.A.-slash-Pursuant. Now let’s transition,

[00:29:03.15] spk_4:
uh,

[00:29:03.88] spk_2:
subtly, but ah, but smoothly, uh, suddenly and

[00:29:27.75] spk_3:
smoothly to tony stick to and my thanks for you. Our listener. Listeners in 2019 were the number one podcast for nonprofits. Most listened to, uh, most longest running, most consistently produced, most sponsored just generically. Overall, you can say Number one podcast for nonprofits. And

[00:29:35.00] spk_2:
that’s because we have so many listeners. So I am grateful

[00:29:49.24] spk_3:
to you. Thank you for your listening If you have shared the show. I appreciate that as well. Thank you for that. That’s how we grow the audiences by listeners sharing what? What

[00:29:49.94] spk_2:
they believe is good content. So thank you with you. Listen, live or archive.

[00:29:54.54] spk_4:
It

[00:30:13.47] spk_3:
makes no difference. Thank you very much for listening. If you want to see my thank you wishes from the Chesapeake Bay, then you can view the video at my thank you video. Thank you so much. We

[00:30:13.61] spk_2:
have a B sample ward. We do not have

[00:30:55.80] spk_3:
any sample word. She hasn’t called into the conference line yet. Okay, well, uh, when when we do connect with her, um, we will be talking about save dot org’s. The issue is that the dot org’s domain that we all use I don’t use you all use. I actually don’t use I’m dot com for my for my business. Um, but you all use it. You know how important it is. There’s the potential that it will be managed by, ah company ethos, which is the water, you know, you may know ethos water. Um, that’s the company that may gain control of the dot or domain. And Amy and I will talk about how these things are all managed. Um, we

[00:31:03.55] spk_2:
have Amy as Amy called in yet

[00:31:40.84] spk_3:
means not. Okay, So what we’re gonna do is, um Let’s do the live listener. Love will do that. And if you will give me a nen dull Jin ce for a few seconds, I’m gonna get my phone and share with Emily. Amy sample Ward’s contact info so that Emily can text and call Amy. So hang on while I get my phone. Okay? The dreaded dead airtime.

[00:31:43.74] spk_2:
But I told

[00:32:11.54] spk_3:
you was coming. So, uh, you had you had time to prepare, so it should not have been dreadful. Uh, for you, So I’m getting her in my pulling up in my contacts. Okay, Emily, Here you go. There’s the ways to contact Amy. Sample word. Please Do use my phone actually, or whatever you want to use. All right, so we’ll be talking about dot Organ. There’s a movement. Does The hashtag is saved dot or Ge? Well, I’m only works

[00:32:29.19] spk_2:
on that. Let’s do the lifeless in love and it is extensive. My gosh, Um let’s go abroad first. Tokyo, Japan! Oh, konnichi wa Ramat Gone Israel! Welcome, Live! Listen, love to Israel as well as Japan. Gwangju, South Korea. You’ve

[00:32:35.28] spk_3:
been with us before. Gwangju. Thank you so much. Seoul, South Korea as well. Um

[00:32:41.53] spk_2:
Brazil. Mina Mina Gerais meant Minas Gerais. Jakarta, Indonesia,

[00:32:42.64] spk_3:
Capital of Indonesia, of

[00:33:07.84] spk_2:
course. Live! Listen, love Thio. Each of our foreign listeners and they continue coaching men city in Vietnam. And, uh, well, we see Vietnam from time to time. Thank you. Live low about to Vietnam and touch skin sherry in Uzbekistan. Yeah, it was Pakistan. Not too often, but we’ve heard from you before. So very glad. Very glad you’re with us. Who’s Becca? Stan? Vietnam, Indonesia, Brazil, South Korea, Israel, Japan.

[00:33:20.68] spk_3:
Multiple. South Korea, of course. Want credit that live? Listen, love. After each of those, uh, countries and coming abroad, we’ve got, um Brooklyn, New

[00:33:24.94] spk_2:
York, Cheyney State Park, Kansas. That’s interesting. Cheyney State Park. Are you actually in the state park? You can, uh that’s interesting. You listening from the State Park. Wonderful. I’m a very

[00:33:43.26] spk_3:
big advocate of state parks. Public lands. You got it. You gotta have park. That used to be the motto in New York City, but it applies throughout the country. Doesn’t matter. Of course you gotta have park green space. Um,

[00:33:49.29] spk_2:
Ashburn, Virginia. San Francisco, California, Tampa, Florida, Fairfield, Connecticut. Live love everywhere. We’ve got her. Okay, well, on the heels of the live love Let’s see now we got to make her wait,

[00:33:55.85] spk_3:
because there’s no way that I’m doing a lot of love without the podcast pleasantry. So now she’s gonna

[00:33:59.60] spk_2:
have to wait. She called in late. It’s our own fault. Um, the podcast pleasantries are over 13,000 listeners.

[00:34:06.65] spk_3:
You heard me say it on Tony’s Take Two. But

[00:34:09.17] spk_2:
I’m grateful. Thank you so

[00:34:10.49] spk_3:
much for being a part of our listener audience. The podcast listeners. Thank you.

[00:34:23.20] spk_2:
Any sample Ward. She’s our social media and technology contributor and the CEO of N 10. Her most recent co authored book is social change Anytime, everywhere

[00:34:26.74] spk_3:
about online multi channel engagement. She’s

[00:34:32.63] spk_2:
that amy sample ward dot org’s oh dot org’s. This is considered a potential personal personal threat dot ord and she’s at a me RS ward. Any sample ward. Welcome back.

[00:34:53.87] spk_0:
Thank you. I’m not sure what happened. I’ve been trying since, like, 10 20 to get in. And I assume I always assume user error trying to re dial, and it never let me in.

[00:34:57.38] spk_2:
Okay, Well, we had the same trouble

[00:34:58.91] spk_3:
here, actually trying to connect with Jean Takagi. We saw that he was in the conference system, but we couldn’t get in ourselves to connect with him so on. And so it’s probably not user error times, too. There’s something flunky.

[00:35:12.16] spk_2:
And the reason we’re using

[00:35:21.69] spk_3:
this conference system and rather than having you call the studio directly, which we almost always do, is because there’s some problem with the with

[00:35:21.81] spk_2:
the phone line. Four lines? Yeah.

[00:35:23.94] spk_3:
So we’re using the conference line. Of course, we need the phone line to get the company line, But

[00:35:33.87] spk_2:
anyway, well, you’re a technology technologist, our technology contributor. It’s wonderful until it fails. I mean, I’m almost I’m almost sorry for saying this. I do apologizing. That was gratified that you have trouble with technology too.

[00:35:43.21] spk_0:
Oh, don’t worry. People are always so happy when an 10

[00:35:46.72] spk_2:
says that something

[00:35:48.02] spk_0:
that happened because it’s so validating.

[00:35:51.43] spk_2:
You

[00:36:22.00] spk_0:
know, it happens to all of us, because at the end of the day, all these tools, they’re just tools, right? They’re not perfect systems. Humans built all of them and humans that themselves. They’re not perfect. So things are bound to happen. But I think it’s really interesting the way folks respond when something, you know, technological is happening. That is not what they want. You know, the folks who get really frustrated and upset, and it’s like, Well, sure, But you know, how far is that getting

[00:36:23.35] spk_2:
you

[00:36:24.02] spk_0:
or the folks who are like, Oh, I’m gonna you know, like MacGyver my way around, just like you all did. So good. Good for you for having a productive response,

[00:36:34.73] spk_2:
Thank you very much. And for you as well.

[00:36:36.44] spk_3:
You kept trying. And, uh, I could I could imagine that your frustration was growing as 10 30 Pacific time came and went, which is the time I I was expecting your call. I can imagine your heart rate was rising blood pressure as well. But you

[00:36:51.11] spk_2:
mean I mean,

[00:36:51.78] spk_0:
what could you know? I usually like to dial in early and listen.

[00:36:54.52] spk_3:
Yes.

[00:36:55.08] spk_0:
And so I tried. But

[00:36:57.23] spk_2:
you know, to know about it

[00:37:00.06] spk_0:
anyway, here I am.

[00:37:04.26] spk_2:
Indeed, let’s talk about save dot or ge I While we were waiting

[00:37:06.00] spk_3:
for you, I was introducing the topic. I explained the listeners that there’s the potential that the dot org’s domain could be managed by a private company

[00:37:20.46] spk_2:
ethos My saying that right? Or they are ethos right ethos. Okay, which is the water that they’re also there? I think

[00:37:25.44] spk_3:
they’re best known for water. At least that’s the way I know them. Their social.

[00:37:26.07] spk_2:
No, they’re

[00:37:26.36] spk_0:
brand new, so I don’t think they’re best known for anything.

[00:37:29.42] spk_3:
Oh, listen to the oh, we’re

[00:37:37.08] spk_2:
already getting. They’re already getting some attitude about this subject. All right there, Brandon. E. Hear it? I heard the tone. I know you. I heard that tone. All right, so this is not the ethos water company,

[00:37:42.12] spk_0:
brand new

[00:37:42.83] spk_2:
private

[00:37:43.21] spk_0:
equity firm.

[00:37:43.81] spk_2:
Okay. Oh, brand new

[00:37:45.14] spk_3:
private equity firm. Okay. I didn’t know it was brand new. I just kept seeing equity from All right. So

[00:37:49.39] spk_2:
let’s introduce, I think to get our way into this, we need to understand how

[00:37:54.06] spk_3:
this domain the dot org’s domain is managed. I mean, and I know you’ll be right. I know you’ll be judicious about acronyms because you don’t want to end up in jargon jail S o, I

[00:38:05.01] spk_2:
think. But I think it helps to understand how this

[00:38:07.05] spk_3:
thing this dot org’s is managed.

[00:38:13.47] spk_0:
Right. Okay, so I’m going to try and explain in some somewhat basic terms.

[00:38:18.47] spk_2:
Okay, But then

[00:38:22.62] spk_0:
I will rely on you to interject questions or fast forward or pause, you know, as I go.

[00:38:26.84] spk_3:
Okay.

[00:39:42.59] spk_0:
Okay. So the internet, everyone listening has used it. I’s probably using it to listen even And we know that website, You know, we don’t just write non profit radio. We write non profit radio dot whatever, and the part of the website that comes at the dot whatever follows is called a top level domain. So there cannot. We can’t just go make one up. Those top level domains are managed, and there’s only so many of them. And I can they use the acronym I can as their name, which stands for Internet Corporation for assigned names and numbers. There you can kind of think about them is like the body that’s mento. Organize the Internet, So they’re the ones that say OK, you know, we’re allowed to use dot com and dot or GE and dot I owe and dot. Whatever else, they’re kind of the keepers of the order. So they are involved in olive ist as those keepers of the order. Okay, The next group we need to talk about is the Internet society that is a nonprofit organization, and their mission is essentially to promote a globally connected and trustworthy Internet.

[00:39:48.31] spk_3:
Okay, listeners may see the acronym I s O. C, right. Let’s

[00:39:54.36] spk_2:
have the night knock Internet society yet.

[00:40:31.46] spk_0:
So, almost 20 years ago there, when I can waas working to continue their their work and managing those top level domains, uh, they bid tohave the contract for the dot org’s domain. And there was a lot of conversation about the value of a non profit managing the top level domain that’s essentially four non profit right instead of a four profit domain registrar.

[00:40:36.01] spk_2:
So I can I can is itself a non profit. Yes, okay.

[00:42:38.49] spk_0:
And Internet society is non profit, and they they won the dot or contract, and in the process of that, created another non profit called public interest registry PR, which would be the organization that owned the contract and operationally managed it. But P I. R. Was connected to Internet society, so Internet Society was choosing the board for P i. R. And revenue kickbacks went to Internet society, that kind of thing. So there very closely related as organizations. You No one is like the owner of the other. And for the last, like 18 years or so, PR has managed the dot or domain, and their work has included managing that. Making sure that there’s, um, resource is for non profit. They have they have, you know, everything from sponsoring events to funding training programs, Thio investing in research about, you know, the way non prophecies, the Internet. They’ve done lots of things to kind of re invest the money they make into the use of the Internet by non profit, and everyone kind of thought things were fine. Who write things are moving along just fine, and last month’s just over a month ago from today. All of a sudden, there was an announcement from Andrewsullivan, the executive director of the Internet Society, that they we’re going to sell P. I r to a private equity firm and that it was essentially great news because Internet society would get so much money from the sale that they would create an endowment for themselves. That was kind of position is the only the good news about this was because it would just be so much money for them.

[00:42:44.95] spk_2:
Okay, that was that. That was obviously early day.

[00:42:48.45] spk_3:
That was early day, because I in my research, I didn’t find I didn’t even find that anymore. So that that

[00:42:54.27] spk_2:
must have been that their first position. I’ll tell you what. We got to take our

[00:42:56.90] spk_3:
break, Theo. Only one we need to take. And then you and I can continue to invest the show. Okay. Thank you. Um,

[00:43:04.35] spk_2:
have you ever wondered why some nonprofits

[00:43:13.42] spk_3:
are always mentioned in the news? It’s because they work to build relationships with journalists who matter to them. Turn to communications can help you do just that. They are themselves former journalists. They specialize in helping nonprofits build meaningful media relationships that lead to great coverage.

[00:43:29.45] spk_2:
It’s all about the relationships almost in life. What isn’t There are turn hyphen

[00:43:41.49] spk_3:
to dot ceo, all right. And we have but loads more time for Amy Sample Ward and save dot org’s. Okay, So the initial justification for this well, it’s not really much of a initial rationale. It’s not even it didn’t even didn’t even bother with justification. Just initial rationale was this will be good for I sock will make a lot of money by selling P I R.

[00:43:53.80] spk_0:
Yep.

[00:43:54.31] spk_3:
Okay,

[00:43:59.51] spk_0:
which of course, uh, raise a lot of questions.

[00:44:02.12] spk_2:
A lot of black people.

[00:44:32.91] spk_0:
And now the second piece that we need to talk about happened months before this announcement. So back in the early spring, the contract details for the dot or contract were up for renegotiation with I can and a few things happened in that renegotiation that already have the community kind of in critical response. Those things included some changes to what had, for a long time been part of the contract. One of those was taking away the price cats, so prices could be set at whatever was desired.

[00:44:45.21] spk_2:
The price for

[00:44:47.40] spk_3:
a dot org’s domain is very low, right?

[00:44:50.79] spk_0:
It’s about $10

[00:44:52.71] spk_3:
$10 for the year. Okay,

[00:44:54.88] spk_2:
Okay, you’re more acquainted

[00:44:56.72] spk_3:
with this and I am because I don’t use dot org’s I love Dot or GQ. You know, I make my living at dot org’s, but I don’t I don’t use it personally, All right? So, yeah, it’s $10 a year. Okay, so they’re So the initial conversation about a contract renewal was take away those takeaway a price cap,

[00:45:23.25] spk_0:
take away the price cap, and then some other pieces that essentially made folks feel that it could be organizations with these domains. There’s some vulnerabilities around censorship and that kind of thing.

[00:45:30.91] spk_2:
Okay, So a

[00:45:31.79] spk_0:
number of organizations

[00:45:33.22] spk_2:
and

[00:46:04.28] spk_0:
people had responded to those changes back in the summer and spring saying, you know, Hey, wait a second. This is not right. This does not feel right. This is, you know, longstanding components of the contract. Why’re these Chicken Jane? And despite overwhelming over 3000 responses saying don’t do this, I can. And public interest registry went ahead and the contract gotta prove that way.

[00:46:05.26] spk_3:
Ok, wasn’t I? Sock, actually, isn’t I Sock?

[00:46:09.57] spk_0:
I can

[00:46:10.46] spk_2:
I can. Okay, but I stock

[00:46:12.67] spk_3:
owns public interest registry, right?

[00:46:15.88] spk_0:
Sure. But public interest registry is kind of the manager there. The owner of the contract.

[00:46:21.62] spk_3:
Ok, ok, and they’re the ones who managed the managed. OK, all right, So now

[00:46:43.06] spk_0:
and what is kind of an added so we can think about it as there’s all of these changes happening? And then, isn’t it so convenient that now a private equity firm is willing to pay over a $1,000,000,000 for this contract that no longer includes price caps and includes some vulnerabilities around?

[00:46:50.72] spk_2:
Wait. Oh, I hold on. I didn’t see that. The price tag is over a $1,000,000,000.

[00:46:57.22] spk_0:
$1.12 billion.

[00:47:11.85] spk_2:
Wow. Okay, I did not see that. I was I was wondering, but I hope she’s okay. So All right, so the question All right, So let’s let’s fast forward now. You aren’t

[00:47:20.74] spk_0:
even following who don’t. Maybe you don’t even work in a non profit that has a doubt or domain. You can already see from, like a, you know, business magazine perspective. What? What seems questionable about the situation?

[00:47:29.30] spk_2:
How the hell are they? How the hell is going to make all that money back, right? Yes. On the backs of

[00:47:34.24] spk_3:
America’s 1.3 million charities.

[00:47:37.88] spk_0:
Well, and keep in mind, this is for the entire globe. this is non profit over the entire

[00:47:43.35] spk_2:
world way. Talk

[00:47:49.38] spk_0:
about wanting to have a human rights lens on reviewing this transaction. When we talk about vulnerabilities for censorship, we’re thinking about non profit, not necessarily in the U. S. We’re thinking about non profit in parts of the world where they rely on a dot or domain so that people here in the U. S. No. Oh, this must be a new organization doing good work. I’m willing to donate to them. I’m willing to support them. They’re likely doing work in a geographic region where their government is not in support of what they’re doing right. And having vulnerabilities for censorship means their government could just turn their website off. Right?

[00:48:28.27] spk_2:
So,

[00:49:21.43] spk_0:
uh, there’s a lot happening that is sure maybe not happening in this moment, but very, very likely could happen, right, because these changes have happened. So, um, what has also been challenging is that in a few of these public forums and 10 held a community call and invited the folks from Internet society and PR to come. And John Nevins said that he asked for those changes to be added into the contract, which kind of further creates this web of questioning about who knew this was happening. And how long was this plan, right? If those changes to the contract are what made the contract worth apparently over a $1,000,000,000 how did all of this happen?

[00:49:23.63] spk_2:
Did you have someone from ethos on the call?

[00:49:30.23] spk_0:
We did Eric Brooks, That Theo.

[00:49:50.31] spk_3:
Okay. And he has, uh, yes, I wanna be. I wanna be balanced here because he has a block post that from December 16th where he answers some of the answers, all the questions that a Mozilla Block post had had asked

[00:49:57.17] spk_0:
Answer some of those questions and I would say responded to them. Did not answer them,

[00:50:29.66] spk_3:
You would say responded. Okay, okay. So, like, for instance, on the pricing, um, what assurances gonna dot Or community have that ethos and p i r will keep their promises regarding price increases. We’re committed to limit increases for dot, or domain registrations prices to no more than 10% per year on average, based on domain prices today, that would equate to an additional $1 per year. We plan to embed these pricing commitments in our public benefit LLC or other corporate governing documents that that doesn’t care. Is that not satisfactory?

[00:50:43.24] spk_0:
No, I mean on average. So that could say, over the next 20 years, the average has been 10%. We all understand that Average doesn’t mean every year has to be.

[00:51:05.50] spk_3:
Yes. Okay. Okay. Now Eric says that they are Ah, they’re going to create a P I R. Stewardship Council. Right now, The Stewardship Council, um, concept behind our proposal is to put in place a dot org’s community advisory board body. The council will seek input from the daughter of community and convey the needs of the data or community to P i R. Management provide advice to p ay, our leadership on key matters impacting the daughter of community. And the leading voice in recommending new service is capabilities to be offered through the dot org’s platform to serve the mission driven community.

[00:51:29.44] spk_0:
Yeah,

[00:51:31.06] spk_3:
okay. What? You know,

[00:52:33.02] spk_0:
they had a, uh webinar. I guess you’d call it yesterday. So did and spoke at more length. It wasn’t a discussion or, you know, they didn’t take live questions or anything like that. But they spoke at more length about the same topics. And what we can understand about this advisory council is that the P. I. R. Board and the folks already working there working within this deal will choose who the council is. The council has no actual authority. Oh, our mechanisms for accountability. And, you know, it’s like a group that they have chosen that they say is able to give be back. So I don’t see how it addresses any of the kind of concerns that rest of the dot or community has for riel accountability.

[00:52:35.39] spk_3:
Okay, so your concern is that it would just be like an advisory board on sort of perfunctory and not not without really thought without authority. The authority would

[00:52:48.12] spk_2:
still be may not

[00:52:52.65] spk_0:
be folks who would have divers or critical views because their hand selected.

[00:52:57.75] spk_2:
Okay, well, hey, did say

[00:53:09.60] spk_3:
again Eric Brooks in his block post. He said that there would be standards for qualifications for membership on the stewardship Council. So

[00:53:10.65] spk_0:
sure,

[00:53:11.40] spk_2:
they would think

[00:53:12.31] spk_0:
that’s a pretty like white, dominant view of saying I’m gonna choose my friends.

[00:53:31.50] spk_3:
Yeah. Okay. Yeah, because, Well, yeah, The question is whether the dot or community would have input into, I guess I guess we’re talking about. Enter the terms of this disagreement between ethos and I saw. Right,

[00:53:32.83] spk_0:
Right. So we’re moving from a world where the dot or contract is managed by a non profit organization who would also managed by a non profit er organization and into a world where the dot or contract is held by a for profit entity owned by a private equity firm.

[00:53:50.69] spk_2:
Do it right. Just the principles

[00:54:02.33] spk_0:
of those organizational set up completely changes the context in which the dot or contract is maintained. Right? We’re going from a non profit entity reinvesting any additional funds back into the sector to two organizations that are really meant to maximize profit. Right?

[00:54:18.87] spk_3:
I understand. I do understand. And this falls into the category of I I’ve noticed this more in the past 10 years or so. We

[00:54:23.50] spk_2:
have to I feel like I have to fight Maur for what I did to keep status quo.

[00:54:28.65] spk_4:
Um

[00:54:29.74] spk_0:
Yep.

[00:54:32.60] spk_3:
So this is something that all

[00:54:32.93] spk_0:
right, let alone progress.

[00:54:37.08] spk_2:
But yeah, I’m just I’m just Internet

[00:54:54.29] spk_0:
society. Didn’t feel that it was sustainable to manage PR PR didn’t feel like it was manageable. Thio sustain the dot or contract there’s a different solution to that than completely, you know, throwing it out.

[00:54:56.36] spk_3:
I understand. All right. I’m

[00:54:57.40] spk_2:
gonna let us go

[00:54:57.93] spk_3:
a little longer. We are. Typically, we would end right about now, but let’s let’s go another few minutes. Not not not 10 minutes. Because listeners are pretty much counting on on our but, you know, really go another 45 minutes.

[00:55:09.79] spk_2:
Do we know how much

[00:55:12.26] spk_3:
revenue P I R earns? I don’t know. Over the

[00:55:16.01] spk_2:
past years, Annual 19 nineties

[00:55:18.24] spk_0:
and that kind of thing.

[00:55:20.44] spk_2:
Okay, what do you know?

[00:55:21.19] spk_0:
It’s like 90 year.

[00:55:24.12] spk_3:
90 year? Okay. And you’re saying that the contract price is 1.1 billion?

[00:55:30.09] spk_0:
Correct.

[00:55:40.30] spk_3:
Okay. It takes a long time at night at the rate of 90 year to earn back 1.1 billion. And then it’s a venture profit. It’s a venture capital firm. Well, Fletcher, profit venture capital firm, which is a which is a profit profit firm,

[00:55:46.59] spk_2:
that it would be a long

[00:55:47.44] spk_0:
time if you had price caps.

[00:56:00.20] spk_3:
Yes, but there may be other methods, you know, we’re not, you know, we’re not venture capitalists, so I guess you know it comes with a healthy dose of suspicion, not just skepticism,

[00:56:02.04] spk_2:
but I mean challenge. There’s

[00:56:04.47] spk_0:
so little information that’s been shared and so

[00:56:06.68] spk_2:
many questions way.

[00:56:29.19] spk_0:
We have asked, you know how in the community Call it and 10 held. We directly asked Capital if they could confirm how long they plan to own the new version of public interest registry, whatever the new or profit is, how long they plan, tone and invest in that company. And they their answer was a really long time in terms of this work. Okay, well, in terms of private equity, I mean, a year could be a long

[00:56:38.39] spk_2:
time, you know,

[00:56:55.20] spk_3:
Right on his block post. Eric Brooks says Ethos has stated on multiple occasions that we are committed to investing. P I R for the long haul. Are investors include families and not profit acquisitions with long term investment horizons. Um, okay, now, but

[00:56:56.08] spk_2:
your concern is that they could resell it and then and then and then we And then it’s then it’s

[00:57:27.76] spk_3:
between 22 Private. Well, even if their public to four profit entities contracting and the outside community has no input into what contracts are between two companies any more than you know any more than we can comment on intends contracts with vendors for NTC, it becomes a matter of private contract in the case of every sale. Okay. All right. What should, uh, what your listeners do. What should we be doing? We gotta we gotta

[00:57:34.50] spk_2:
move on What you’ll do, you really

[00:57:36.45] spk_0:
love? You can

[00:57:37.14] spk_2:
go

[00:58:25.50] spk_0:
to save dot org’s dot org’s s a V e D o t org dot or GE where we have posted the recording of the community call, for example, if you want to be able to hear what the folks from these companies have said, uh, you can see the letter that we’ve sent to them that outlined some of the issues in the contract and what is really important right now. As for organizations to sign on and endorse our request that the sale stop or if you can’t sign on behalf of your organization, sign as a person as an individual. Right now there’s almost 550 organizations who have signed on, and we have almost 19,000 people who signed on those numbers really matter and help demonstrate that this isn’t you know, just in 10 and e f f who have a problem, right? This is a lot of organizations diverse people who understand that this is not in the best interest of a non profit, you know, four good world of the internet.

[00:59:14.24] spk_3:
Okay, Andi, uh, some of the other organizations involved Association of junior leagues. I’m just sampling from from a list of crisis text line do something dot org’s listeners know Aria finger Do something dot or GE ff Electronic Frontier Foundation Girl Scouts of us A Independent Sector Meals on Wheels America, National Council of Nonprofits and 10 Techsoup Volunteer Match Volunteers of America Wicked Media Y M C A of the U. S. A Y W c A U s A. All right, Amy Sample Ward. Thank you very much.

[00:59:22.12] spk_0:
Thank you so much. Tony. I really appreciate you kind of diving into this when I know it can feel a little acronym heavy, but it really will impact every single non profit

[00:59:33.62] spk_3:
Amy Sample word social media and technology contributor and CEO of in 10. You’ll find her at Amy sample ward dot or ge and at a M. E. R. S

[00:59:40.76] spk_2:
board and Aimee. Simple word. Lots of good wishes for your holidays. And for 2020. That’s a good wishes. Radio,

[00:59:47.02] spk_0:
I hope 2020 means we get to see each other in person.

[00:59:51.12] spk_2:
Well, we will it ntc

[00:59:52.47] spk_3:
But we need to go beyond that. Hopefully.

[00:59:54.43] spk_0:
Okay.

[00:59:56.03] spk_3:
Thank you so much, Amy.

[00:59:59.01] spk_2:
Next week and the week after, there are no shows. I hope you enjoy. Enjoy the hell

[01:00:24.21] spk_3:
out of your holidays. Take time for yourself. Disconnect off grid. You know what all that means? I don’t need to flush it out. I hope you do it. I hope you do it for yourself. Friends, Family. Do it. Take the time you need. You need to take time for yourself because you’re in a giving profession. So no show for two weeks. If you missed any part of today’s show, I beseech you, find it on tony-martignetti dot com

Nonprofit Radio for October 11, 2019: Recruiting Your Board Members

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My Guest:

Gene Takagi

Gene Takagi: Recruiting Your Board Members
Gene Takagi returns with 12 tips, ideas and strategies you can use in board recruitment. We’re talking expectations, motivations, commitment, requirements, and more. He’s our legal contributor and principal of NEO, the Nonprofit and Exempt Organizations Law Group.

 

 

 

 

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Hello and welcome to Tony martignetti non-profit Radio. Big non-profit ideas for the other 95%. I’m your aptly named host. Oh, I’m glad you’re with me. I’d suffer the embarrassment of wheel if I if you irritated me with the idea that you missed today’s show recruiting your board members. Jean Takagi returns with 12 tips, ideas and strategies you can use. Inboard recruitment will get those many of them as we can. We’re talking expectations, motivations, commitment, requirements and Maur. He’s our legal contributor and principle of neo the non-profit and Exempt Organizations Law Group on 20 steak, too. I’ve never been so insulted in all my life. Responsive by Wagner, C. P A. Is guiding you beyond the numbers. Witness cps dot com But Cougar Mountain Software, Denali, fundez They’re complete accounting solution made for non-profits Tony dahna may slash Cougar Mountain for a free 60 day trial and by turned to communications, PR and content for non-profits. Your story is their mission. Turn hyphen to dot CEO. And as I’m reading, I realize that the embarrassment of wheel we had that last week. So again, as I’ve said, uh, I’m in desperate need of an intern. So I have someone to blame for these mistakes. So so sorry we didn’t get ah updated sickness for you this week. Uh, no one to blame but myself, which is the problem. That’s why I need interns. Um, let’s let’s bring on Jean. I feel, uh, we’ll rescue everything for us. You know who he is? He’s the managing attorney of Neo non-profit Exempt Organizations Law Group in San Francisco. He edits the wildly popular non-profit Law block dot com. And in 2016 he was the American Bar Association’s outstanding non-profit lawyer. He’s at G. Tak Jean, help me out here, please. How are you? I’m doing great. How are you? Very well. You sound strong and powerful. And Vural and enthusiastic. I love it. Thank you. I need that. I need that after my real mistake. Um, So you, uh you have Ah, pretty lengthy. Uh, interesting block post that we’re gonna turn over a little bit, but you know, it’s you. You wrote something for individuals who are contemplating boardmember ship, but we’re gonna turn the tables on it on talk about non-profits or contemplating recruiting board members. And what? What advice you’ve got in that in that regard? Does that sound right? Yeah, that sounds great. Yeah. Go. You’ve, uh you’ve been working with boards and board members for how many decades now? Um, a couple decades. Yeah. Yeah. So you know what you’re talking about. You You’re on your ANA least one board that I know of. Are you on more than one board currently on a couple boards and a few committees that are non board committees, but staying pretty active. Yeah. No, I know. I’m tryingto I just wanna, uh, establish the bona fide. He’s I mean, you’re not just not just a theory for you. You’re actually practicing it and keeping, ah, keeping real boards feet to the fire. Right. You’re not just not in a vacuum. This is real life for you. So yeah, both both the legal adviser to some boards and then sitting in the fire as the boardmember. I’m not sure I’d want to be on a board that you are a boardmember of you. Would you hold this will? You would hold us to high standards. I I certainly aspire to high standards. I don’t know if I achieve them often or ever, but I aspired to them. So I guess, Yeah, you we wouldn’t clash or anything if you were on the same board. I would I would respect you. I just would be annoyed that you’re always telling us that, you know, we’re not We’re not reaching the right standards of governance or you’re failing your failing the the the requirements of of the duties, the three duties. And and you’re not fulfilling your responsibilities as board members. I would, you know, I would respect you. Um, and I would I would aspire to do better in your words. I would. I would. Yeah. Totally trying not to be that type of boardmember. Well, but you’d be hard. You know, we all know those boardmember. Yeah, but will be hard for you to turn it off. I mean, you know, you’re you’re a fiduciary to the organization. You have. You know, it would be hard for you to turn it off. I could tell it would. All right. Um, So let’s see. So we’re starting with, you know, starting with some of the basics. Um, you want you want to make sure that people understand what? What they’re taking on what responsibilities The three duties, which you’re, um, loyalty, care and obedience. Um, you want to make sure that board members understand what they’re walking into? Yeah. I mean, that’s absolute basics because, you know, everybody could say, you know, I like to be on the board. I’m really passionate about the mission, and that’s a great starting point, but I know that that’s not gonna get very far if you’re not willing to do the rest of the work that’s involved. So just having an understanding of what your legal obligations are, first of all, is probably a good first place to start and for the non-profit, because you flipped it nufer the non-profit. When they start to recruit boardmember, they want to make sure that the board members kind of understand not only what the organization wants out of them, but what the law demands of them. And and they should have offensive. Actually, what could happen if they don’t settle the obligations and that maybe the boardmember from hell that nobody wants the ones who could tell the well in the worst case scenarios, which I sometimes see. This is what can happen it in, like the worst case scenario as you might imagine, might be personal liability of boardmember. Go out of pocket for something that happened with the organization on their watch, because perhaps gross negligence or something more serious than that, or just terrible PR damage where boardmember Zehr individually attacked by media and social media for some failure of the organization. I think from the headline in many news stories over the December and the beginning of the fall, we’ve seen some high profile non-profits where they have been called out for. You know, donors are for activities have engaged in, and so boardmember Zehr often held, you know, to thio how they’re living up to their authority on the responsibilities by the media and social media and maybe buy you a time dummy. Maybe that’s right. Non-profit radio also aspires to a very high standard. The show achieves the high standards. It’s me personally. It’s me personally. That’s ah, that’s rare for way. Just have about two minutes before before our first breaking. You make the point that there should be in place. My ability insurance directors and officers liability insurance. Well, that would be one of the things that I would look for as a perspective boardmember coming on to a board. So I would think that a non-profit that aspires to try to get high quality people on their board who are really interested in doing the work protection, huh? Just in case personal liability doesn’t become an issue. Directors and officers, insurance is kind of what protects against that. So that would be a mosque on my list. Do your do your boards that you sit on, let you get involved with recruitment. Yeah, I’m Max. Absolutely. Part of the one of the committee that that’s in charge of recruitment for one of the board. Excellent. Excellent. Okay. So that I shouldn’t say like, let you go. I mean it. That way, they take advantage of your expertise. That’s what I should say. Buy-in recruiting new boardmember. Yeah, because it is essential. You know, the people want to have to know what they’re getting into. And, of course, like you said, it has to go a lot lot further than just passion. Um, we have about a minute or so. What? You you knew, name something. What would you feel like bringing up for a minute? And then we could talk about it more after the break through? Sure, I guess, is a nonprofit organization I would want to know. Why does this individual? So I’m thinking about inviting onto the board. Want Do they want to be a board member of our organization? And I know everybody I talk to you is gonna say what we have a passion for the organization of the organization’s mission. But I would want to know what else. Why else do you want to serve? Sometimes those reasons could be all about, you know, uh, very altruistic. And you know what? Emotionally helping the people about our organization helps what that means to them and the social impact they want to create. But sometimes there are self interested reasons as well. And sometimes that’s okay to do it for personal reasons. And maybe we’ll get into that. Tony, would you have any personal reasons for wanting to serve on the board? Could you see some benefit that comes to you personally out of it? Oh, sure. Um, hold that thought. I’m not trying to get out of answering. Let me take this break, and, uh, and I will answer in about 30 seconds. Um, this break is for regular CPS. Are you thinking about a change possibility? Possibly in your c p. A relationship. Maybe your board is talking about boardmember boardings rumbling that they’ve had the same accounting firm for a long time. Or maybe they’re not quite up thio up to par for some reason, um, whatever the reasons, maybe you’re feeling, ah, growing need to get some accounting help. You know, a partner. You know, partner Wagner. You know, ye duitz doom. Weinger CPS has been a guest multiple times. Talk to him, see if they can help you get started at wagner cps dot com. Now, let’s go back to recruiting your board members. Um, okay, Gene. So, yes, Uh, I didn’t I didn’t call you out for asking me a question, which is generally prohibited, but that’s okay. Uh, so, yeah, I mean, I’ve ah, personal networking. I mean, if we’re getting to the base level, maybe there’s some people on the board who, you know, I’d like to I’d like to get to know, or maybe I know them and were friendly, and I feel like we would work very well together, Although that could be that could be a bit of a red flag for the non-profit. If if I’m gonna be like a voting bloc with my friend or two that, you know, that could be difficult, depending on what those one or two people are like. Um, but, yeah, of course. Networking business advantage. Um, maybe I’m on another board. And there’s some synergy put potentially between the organization’s, um so there’s a couple of non mission related reasons. What do you hear? You hear any bad stuff? Well, I’ll just add on 15 were good things, and then I’ll talk about the best. Like sometimes people want to develop skills and maybe create job opportunities for themselves. They may start off a boardmember hoping that that might turn into something out with that organization or maybe a allied organization. Um, prestige is probably another, and there are some status boards of, like foundations and symphonies and operas or whatever. Organizations have particular status in a community of whatever communities that have might happen to be sometimes sitting on the board ads toe kind of the social status that somebody might have and power. Sometimes I know for identity based group community organizations, sometimes serving on the board on it. Being with such high like that that that person is able to exercise power in other areas as well. So those might be reasons summer okay for serving on the board of long, but that’s not there. Those were not their primary reasons, or they do not let that get in the way of acting in the best interest of the organization above all other things. But sometimes there are some bad things. And then so serving on the board to get into a contract with your company, that wouldn’t be such a cool thing, although we hear of that happening with several organizations that are in the news. Um, have you where Jean have? Have you ever heard anyone disclosed that what in the in the recruitment process that they want it? Not that I’d like to see. I’d like I’d like to see this organization doing some work with my with my company. I haven’t heard you haven’t heard of the organization I join, but there’s definitely been some implications that for some of the reasons that you discussed well voting blocs created within the board from business partners or business, then you know they’re using that block to take advantage and have the whole board or enough of the board to agree to certain contracts, um, that allow their companies to do business. So I didn’t want to point out to meeting, but I think it’s safe to point out one name of an organization because they’ve been in the news an awful lot under governance. And that’s the N R A, which is actually a bunch of different organizations. Ah, but the n r A. That sort of the main organization, uh, has been kind of under heat a little bit for the contract that their board members and they have a very large board. I think over 70 people the contract that their board members have engaged in with the organizations and whether that was on abuse of their duties or not. I will comment on whether I think it is or not. But there’s that perception of a non-profit boardmember being on a board that the proof contract would that boardmember company and when that occurs over and over again with multiple board members and it starts to look like the voting blocs are sort of a wash, you wash my hands. I’ll wash yours kind of kind of deal. And so you have to think about the perception, and not only just the limitations that Lami have on that. There’s certainly some legal issues that could arrive, but the public perception of that and being on the front page of The New York Times or The Washington Post or whatever. And you know, with that allegations, what will that do to the rest of your fund-raising and how the rest of the community thinks of your organization? So there are some really interesting things that could be bad as well in terms of bad personal reasons for serving on the board. Um, I’m going backwards now to something that you mentioned about potential social media embarrassment for you being on the board. Critics of the organization, I guess, is there some way that an organization can, um, insulate or or somehow protect or what can what? Can an organization offer to, uh, mollify someone’s concerns over possible personal embarrassment on the social networks? Yeah, you know, it’s a really tricky thing. There are some organizations that try, so you’ll see that some organizations are very open about putting on their organizational website. You know who is on the board of directors? Um, but some organizations feel that they want to keep that information a little bit more private, and they don’t put their board members on their website. The limitation to that is that your form 9 90 which is a public document. And that’s your annual information return that you submit to the I. R. S. Um, that’s easily available on a site like GuideStar Archer. And, um, that’s going to list all of your board members on it. So as much as you want insulate some board members, that’s not really the way the law thinks about what the law thinks about. You know, non-profit organizations, while while they’re not public organizations, they’re not governmental organizations. They are the type of private organization without ownership where the board are really acting in Stuart’s on behalf of the community, Um, and they want to make sure that those organizations are fairly transparent and what they’re doing, including who is leading the organization. So that’s why that information is required on the form 9 90 board members and officers so that everybody could see them. And what type of compensation they make for the organization if they’re paid. So is there not really much protection that an organization could offer someone against attack again on the social networks? I’m thinking of that because it’s it’s so public, and it could be potentially so embarrassing. There’s really If someone wants to call out a boardmember, there’s not really nothing. It’s not really something that the organization could do. Tow support, the murder? Well, yeah. I mean, other than Dino insurance, you know, the the organization could It’s the beer enough. Have their lawyer perhaps look a defamation claim. That’s a stretch. That’s that’s really serious. Okay, yeah. And the social networks are Ah, well, yeah. I mean, they’re they’re pretty much open. They are what they are. You have to go pretty far. You have to go pretty far to be, uh, someone have a reasonable claim against you for defamation, right? And in that environment, right. And you’re weighing in against the First Amendment rights of people to be able to express their opinions like a yelp review that’s really bad and says, Well, you know, this organization has done horrible things, and these are the board members who are responsible. Well, that’s probably protected straight. All right, opinion. It’s something. But it’s something for organizations that are potentially controversial. If they’re doing grassroots political organizing or really doesn’t even have, sometimes have to be. It doesn’t have to be political to be controversial s. So if your organization has a mission that’s high profile of any of any sort, um, you need to make sure you’re boardmember understand that there’s a potential for them to be, uh, called out good or bad. We’re thinking about what we were thinking more of the bad. That’s true, Tony, I. And I think now that I think about your question about is there anything that you can do to protect your boardmember? There is one protection for small organizations that they might offer is to not publicized or use a board members home address or even their business address as the organization’s address. And I know a lot of small grassroots organizations do that. They kind of just use a board members. Or maybe the founders home addresses their organizational address. Yes, well, once you’ve made that public information now, people could actually go to that home. They know where you live. So, um, not subjecting a boardmember tiu. That might be important. And that that address might be located on a public document that details either the organization’s address for the ancient for service of process address. So that’s the agent preservative processes. Basically who? Somebody would deliver a lawsuit, too. And you are required to make that publicas well. And oftentimes people put a boardmember they’re on, they put their home address so they make sure that they get the mail. That’s not very good for privacy concerns. So those are two things to think about. You could get a P o box for 100 bucks a year or something. And sometimes a P O box is not permissible. They require a street address, But then you can look too. There are a lot of virtual offices that will let you suri address, right? Right. Yes, exactly. That’s right. The male shops that used to be mailbox etcetera. Um, but that type of that type of store, they’ll give you a street address, but it’s a storefront. Yeah, OK, yeah. That’s right. For service of process P O. Box. Not allowed. Probably, right? Yeah. Okay. Okay. Um, you want to be looking for someone who is, Uh Ah. Good. Ah, good team. Team player works well with others. They’re gonna be serving on committees. And of course, we talked about expectations. You gonna tell them whether they’re gonna be on one or two committees? Maybe you could even tell them which committee or committees they’re going to serve on or ask them what their preferences are. But it’s committee work. It’s full board work. It’s working team wise with the C suite, sometimes with the staff, maybe with volunteers, somebody who’s gonna be collegial and team worthy, right? Yeah, I think you know, I wouldn’t understand an organization that wouldn’t want that characteristic of a boardmember. And it’s hard to tell, right? Some people are good about, you know, putting on a good public safe. So it’s the only time you’ve ever met this candidate is, uh, you know, a breakfast interview, and then you’re deciding whether to that that person should be on the board or not. That’s a tricky decision to make because they can say they’re collegial player and be really nice at the breakfast meeting. But do you know how, though act in aboard environment, then sometimes that’s going to be very different from that one on one meeting. So getting to know the person might include a little bit more diligent but informing them of, like Witek of requirements and responsibilities they’re gonna have for your organization if that’s committee work or that other work or expectation that they volunteered at events that times are work with some other volunteers or work with some staff on some committee, whatever kind of the organization does with its own board members, that’s the expectation. And that’s why they want t get Yu on the board. You know, they’ve got to make sure they’re expressing that to the boardmember in advance before they bring them on, because the boardmember. Is walking into something that they didn’t know about. That’s gonna be a potential mismatch and can create some harsh feelings. It’s not managed, right? Yeah, sure. I didn’t know. Why didn’t you? Didn’t you tell me up front that this was gonna be the thieves? Were the expectations on And of course, as long as we’re talking about expectations again, we want to be very clear about fund-raising expectations. How much are you required to personally give. How much do you do we look for you to get from from other sources? Do we look to you to host events in your home or in your business? Uh, do we look to you to bring the business community to us, etcetera? All those types of fund-raising requirements should be should be laid out. Yeah, it’s a it’s a It’s a great question to ask, because this is a little bit of a debatable topic, and I see both sides on it. Is that fund-raising requirement? Tony Some a little curious as to how you feel about it, too. I kind of feel like it’s great to ask that every board member give a meaningful amount for them. But I’m a little bit more leery of the board that says, You know, we have a $1000 a $25,000.100,000 dollar minimum that you contribute a year for the privilege of being a boardmember big sickening that’s now framing it as a donor relationship rather than a relationship in which the expectations are is that the boardmember is been a exercise proper oversight and helped direct the organization into the future um So while I think donations should be a requirement of some sort, I don’t think strict numbers are really a good idea, Particularly if diversity and inclusiveness is something that we want in our organizational board. Yeah, Yeah. I used to feel that a strict number was appropriate, but I’ve changed my mind over the years that it should be what it should be a meaningful gift for the individual. Now, there are marquee names with that we’ll never get away from. You know, we have $100,000 requirement here, but we’re talking to small and mid sized non-profits, not the New York City Ballet and Stanford University. Right. So But you know that that, uh, well, they’re the other, the other 5% we’re talking to the other 95 but they’re the five that they’re not in the 95. So, uh, so they’re they’re moving them aside as we do routinely. We don’t even mention the 1999% of time without even thinking of them. So for our listeners, yeah, uh, it should be a meaningful. I mean, it should be a stretch gift, you know, But then you have to have conversation with each individual boardmember. You know what that means for them? I think I think before they joined the board, I I agree, Tony. I think that’s a good thing. Thio raise ahead of time. So you don’t put people in awkward positions where their like again going. I had no idea. And this is deeply personal for me. And I’m going through hard times now. Yeah, yeah. Do you like to see these expectations in writing? I kind of liked have, um, some of this in writing as part of the board orientation package so that both parties know kind of what, What he expected. Questions are going to be. So, uh, both, you know, in the board orientation package that I’m thinking of is going to be shared, even with part of it will be shared with a prospect before their actual provided onto the board. Okay, some of the questions that that you’re gonna ask of any prospect so they get to know you better as an organization, as the board of the culture that values better pervading the the organization. And they get to know you better than individual and to see if there is that right fit. So being as transparent as possible up front, I think, is the best way to help make sure you’ve got a good relationship going. You mentioned being independent enough to express your own point of view and not to be intimidated by other committee members of the board members. How would a non-profit assess that? Yeah, it’s a really good question. I think you could see the Valley, Tony and I know you’ve got a legal education background as well. So the independent judgment is really important. So we don’t have kind of a bunch of sheets. Just say, Oh yeah, way trust, you know, our chair or whoever. We will just go along with the boat without actually looking at any of the documents or any of the facts and circumstances related to that boat, which might be very important for which you might have particular skills that you could actually have given the full board. The benefit of if you had actually taken a look at that ensures what you what you had with it rather than sort of rubber stamping what somebody else said so that independent judgment is really important in terms of meeting your legal responsibilities. But it’s also just if you’re a team player, Um, I don’t think you’re just the team player. If all you do is follow, I think with a strong team, you are all supportive of one another. And when you have a certain skill that or experience or perspective, you share that and you utilize that so you can help the team in that area where other people, other people on the board may not have those things. And I think we’re also unique. That we can offer something different from the way everybody else is looking at Is the boardmember on almost any issues. So I think really contributing and exercising that independent judgment is, uh, super important. But testing it wth the question you asked Really hard. I know. So we asked the question. Or you can ask more generative question about how would you behave if you know, the board chair said, We want this on your head. Five out of six other board members say it, but you really disagreed with that. What would you do in that situation? That might be one of the types of questions that you ask a candidate for the board and see what they say. Yeah, Maybe that’s maybe that is the only way is just ask you. What would you do in that situation? All right, Jean, we have to take a break when we come back. Give us any more thoughts you might have on assessing that, uh, that independent judgment and then, you know, then you come back with something that you’d like to chat about. Meanwhile, we’re taking a break for cooking mountain software designed from the bottom up for non-profits. It’s simple to use phenomenal support. Can you say that about your own accounting software? QuickBooks? No. Quick in no turbo cash workday zoho Patriot. No, no, no, no, no, no, no, no, you can’t. Um so go with something that is made for non-profits from the bottom up. Cougar Mountain Free 60 day trial on the listener landing page at Tony dahna May slash Cougar Mountain. Now it’s time for Tony’s take two. I’ve never been so insulted in all my life. This woman years ago accused me of being a thief, a planned giving thief. She suggested that I would steal from an estate steal from my employer at the time. This is what I was a director of planned e-giving. Um, and all while trying to get me to do her a favor, which was technically well, not just technically, which was impossible for me to do is illegal for me to do not just on a technicality. It was illegal for me to have done, but she didn’t understand how this whole thing works. So, um, see what shocked me? It’s Ah, it’s a video where I’m hosted by Peter Heller of Heller Consulting Group. He’s got a video siris. He interviewed me. I told this shocking story, and you can find it on. Uh, yeah, I mean, you go to Peter Heller’s website, but why would you wanna go there when you go to tony martignetti dot com? That’s the place to go. Watch the video at tony martignetti dot com. All right, let us continue with Jean Takagi and recruiting your board members. Gene, anything more you want to say about possibly assessing independent judgment than anything come to mind there, but I think it has to do the questioning of the candidate. But maybe more importantly, you have to share with the candidate that you’ve got a culture that allows for independent judgment to be welcomed, right? You don’t want to make it look like you have this culture where everybody is going to rubber stamp a board members or the CBO’s. Maybe which is more common. Whatever the CEO decides upon, they know the day to day stuff, so they must be right. Do you have a culture that that allows the board to question, then probe and act more than just the sounding board? But really, Thio provide a lot of additional input and then decide whether the board should actually stacked in and make decisions where there’s enough of the board that that challenges what a particular board share or a CEO, my steak is in the best interest of the organization. So it is a particularly important point to create a culture that allows her for individual board members to intervene when it’s reasonable and appropriate. But I think that’s the last thing, okay, and this is related to something that you and I have talked about before, which is very bad sign. If all the votes are unanimous and there isn’t this culture that you just described, you know everybody just rubber stamps. Ah, there’s And we talked about it. It might be a strong board chair or CEO or somebody extra wealthy who everybody is intimidated by, or whatever. You know that those are all those are all very bad and counter to the culture that you’re talking about fostering. Um, what did you want? You got one. You do throw something out there? Sure. So I think another thing that an organization wants to do with with an individual is to make that individual comfortable, that they know who’s actually on the board and who the CEO is. Some some organizations recruit board members, and only one boardmember. Knows this new candidate. Nobody else has ever met him, you know, and they judge that candidate based on how they look on papers. But he’s got a good resume. Yes. Um, and this boardmember vouches for him, and we really need a boardmember. So let’s Alexis, um, yeah, uh, so you know that’s not a typical. It’s pretty common. So for non-profits have a system where they went. Why don’t we have that breakfast meeting or lunch meeting and bring out a few board members on bring out the CEO for one of these things. If you’re you know, it is a board member and the board really that important to an organization. And the law recognizes a tte the top of of what is still ah, hi article system in terms of governance, it’s the law requires, you know, that the board is at the top, then a boardmember position is super super important. And is the organization treating the addition of a boardmember as it is that important? And that’s a good sign of the board for an individual candidate and for aboard that actually sets it up so that they’re going to place proper priority to bringing on a new boardmember by letting the meet several board members and CEO and maybe attended board meeting without any, um, sort of strings attached. A visitor. You come out and see a get to know us, we’ll get to know, you know, that’s a promising Anything I haven’t heard that suggested for That’s a good one. Let someone come to a board meeting as a visitor as an observer, that was you mean? Yeah, exactly. Um, and I think they would get a sense of what the culture is much better from actually getting to be in the meeting. Even if they’re a silent observer. I’m sure there’s going to be some pleasantries exchanged, but they’ll know much better. And you get a sense out of them if you actually allow them to participate as part of the board. Um, at least with introductions and maybe what they want out of what their views are of the organization that that might be a nice baker. Also your point about doing it based on a breakfast meeting in a resume review that, um, yes, this is subsumed in what you were saying, really? But I won’t make it explicit that that that just doesn’t give, um doesn’t give credence to the, uh doesn’t respect the, uh, the position that you’re bored should be held in. It makes it, you know, just purely transactional. We need a body, she’s available, and she has a good resume that, you know, that doesn’t doesn’t, uh, give someone ah, feeling of prominence in the organization like Ajay. If it hadn’t been my warm body that that was brought in, there would have been some other warm body that they found the next day, but but a Siri’s where there’s multiple interviews to three interviews over several weeks on and there’s deliberation and you make sure the person shows up on time for the three interviews and takes them seriously, you know, those you can learn a lot just by observing somebody over over several weeks or maybe even over a couple of months. Yeah, I think that’s so true. And I met the okay with even introducing some perspective board members to certain staff beyond the CEO. Um, so and then soliciting staff input is, well, a thio what they think about this perspective. Candidates. Um, I, uh I am forgetting a good picture. Look all around from all people. Um, and Aziz said that the importance, I think articulated much better than I did. The importance of the position should be respected by the process. That’s what I meant to say. Yeah, I think you just said it better than I did. Okay. Really Got you said. You certainly said it more succinctly. That’s definitely true. Um, okay. You have one. You gotta You gotta basically have your compliance house in order your nine nineties articles of incorporation by-laws policies. Your financial statements, whether audited or not, All these things I mean, this is sort of foundational, but, you know, if there’s a problem in any of these, you’re you are got you at the organization are gonna look poor in the eyes of your perspective. Board members. That’s what I think. And I think as a perspective boardmember and I will give you this morning, actually for a board. So coincidentally, um, I’m gonna look at all these. Um and I will look at them with a bit of a critical eye to see if I see sloppiness. Where if I see vagueness in in what the missionary, I see a different mission statement in the articles from the by-laws the website. Like I had really tell what they’re doing where they’re 9 90 Just seemed to be like, very, you know, scattered. We prepared. Of course. I’m gonna see, you know, the financial. I’m gonna see how stronger week they appear, at least on paper. Moneywise. Um, so there’s a lot of things the documents are gonna show me. So if a non-profit is very careful about doing these things and finding on time, of course it I’ll see if they’re finally late and you know they’re suspended or delinquent or or whatever. So the non-profits should like when whenever you invite a houseguest over that you want to impress in, clean your house before you bring that person. And I think non-profits got to think this thing. Wait, they’re gonna bring the boardmember and again back-up prominent important positions. We’re going to clean our house so we can attract the best candidates. And hope will retain the best candidates as well. Well, Gene, that organization would be lucky to get you in-kind on. How many boards can you be on? My gosh, you’re on your own. You already you have time for? Yeah, I usually have a tube board maximum. But the organization that pocket is important enough. And I actually have a term off of another board. Uh, within the year that that gives me the ability to sort of overlap with three boards for maybe a few months. If I If I should be so lucky as to be elected by that order, um, But then then we’ll be back to two boards after that. Okay? I see you get you have a whole schedule of new spreadsheet to manage. You’re bored. You’re bored. Obligation? Yeah, actually. D’oh, I’m very careful about trying not overcome it. Let’s talk about something that you and I talked about. Oh, I don’t know. Three months or so ago, maybe 23 months. We had a real well, uh, meaningful conversation about diversity equity and inclusion. So without going over the that full hour that we spent, um, if this is important to the organization, then it’s going to want to recruit board members for whom that value is important. Yeah, I think so. Well, and if they’re looking to recruit, um, certain, uh, members of the community that might give the board more diverse representation. They’re gonna want to really think about making that person feel not like a token which we discussed about and have an inclusive environment that really welcomes their ideas and acknowledges and ensures that they’re able to exercise the power that they have in their position, that they have a voice in the organization and in the governance of the organization. They’re not just sitting by the sidelines, helping the board take a better looking picture. So it really is an issue. But it comes down to where? For an individual. If you believe strongly in that In in that diversity concept, um, and you are invited onto a board that’s not diverse, and you’re a member of the majority group. So let’s say the group is predominantly white man and your white male we get invited onto that board. Well, if you really falik the value of diversity equity inclusion, you might say, No, I’m not gonna take that position on that board because I would grab you see that board bring on somebody who does give you a more diverse perspectives representation on Guy might, you know, being part of the majority group, participate in another way to help you get that. But I don’t want to be part of a board and just make make that that issue on even harder one to deal with. So it’s an interesting situation for organizations that want to think about it. Um, if they want to bring in the best people, they’re gonna have to think about how they’re gonna address their composition issues as well. That that happens to be an issue. Yeah, no, it’s very altruistic. The way you describe you know, the selflessness of doing what’s right for the organization. Bye bye. Not not accepting a board position and flip that on its side. Uh, non-profits need to be, uh, thoughtful about who they are inviting If this is an important value for them, Jean, we gotta take our very last break turn to communications, PR and content for your non-profit. They help you tell your compelling stories and get media attention on those stories all the while building support for your mission. They do media relations, content marketing, communications and marketing strategy and branding strategy. You’ll find them at turn hyphen to dot CEO and Jean and I have but loads more time for recruiting your board members. Um, all right, G, you have something, uh, you want to bring up? Sure. I think maybe the next important point I wanted to bring up because it happened to the indication is non-profit is great. It’s filled with wonderful people and they they’re really working towards something that I believe in passionately in their culture is the great says everything seems to be fine, but at the moment they are confronting some really difficult issues that’s going to require extra effort extra tax from the board, and it might be a financial challenging, financially challenging time for them might be a leadership transition, that they’re losing a founder or expect long term executive director and they’re gonna move into a new one. They might be engaged in litigation for which they did nothing wrong. But all of this doesn’t They’re going to be sort of boiled in in lawsuits and potential PR damage that might go along with that on all of the things can create more work for aboard and definitely require more effort in intelligence impact from the board. I think non-profits have to let prospective board members know, even if those things have not hit the media are are really public yet that if they’re coming on toe into an organization that’s got some imminently difficult challenges that will be brought before the board, they want to know first. Is that the best time to recruit boardmember? Because it might not be. But if they are recruiting port members, I think they got to be up front again with them and not surprised them after their dahna boardmember got you. Now you gotta be on the committee that deals with art. Being involved in this lawsuit duty to disclose basically thing I think that that organizations have to be up front about that, obviously very tactful there. I know there are confidentiality issues that are gonna be weighing in on the other side of that transparency, so somethingto really managed very carefully and thoughtfully. You’re basically saying there’s a duty to disclose these these kinds of challenges, and that could be an opportunity the organization could could turn that into something, you know? Yeah, we have this particular financial challenge, but that’s why we’re looking for you. Andi is not to be a donor, but, you know, maybe it’s Ah, it’s a it’s a finance problem or an investment problem on endowment management problem or something. And so you’re can hyre are sorry. Recruit someone who has a particular expertise and that person could, you know, potentially be a leader in I don’t want to turning the organization around but guiding the organization out of the difficulty that they’re facing so it could present a challenge and an opportunity for non-profit and for a potential boardmember to come together and help each other. I think that’s very, very true. Yeah. And financial management expertise is, um, really sought after quality for a board members. And sometimes some boards have a hard time finding those people, so it’s a difficult issue. Arises. And, um, uh, they put extra effort into finding somebody like that that that can be an opportunity for referred bringing ana boardmember gonna be invaluable for many, many years. Yeah. Yeah. Um, what about, um, the, uh just, you know, sort of leadership personality, like, you know, Are you Are you? Ah. Are you messing? Well, you are. You messing well as leaders with the the potential boardmember do you put forth a, um, an image which hopefully is not merely a not a facade, but, you know, Are you confident you you convey confidence in the direction of the organization, the your leadership, your leadership style? Uh, you know, these, I think, are sort of intangibles that Ah, well, much of what we’re talking about is intangible, but that ah, potential boardmember is using toe assess whether they’re gonna fit. Yeah, absolutely. I’m sure they’re all the studies that we know of. Um, where first impressions are powerful tribes of what that relationship turns into um so or whether there is a continued relationship at all. Um, and I think that’s very true in bringing Ana boardmember as well. So boardmember gets introduced to a board chair or to an executive director or somebody else in a senior leadership position. And first impressions are going to develop pretty quickly. So certainly within the 1st 30 seconds Teoh a minute. Um, they’re going to be some presumptions that each side has about the other. And I think understanding the limits of what first impressions means are important for board members when you’re dealing with people who might be introverted or shy, and or maybe from a cultural, different cultural background not used to sort of exhibiting some of the the the confidence you know that you might find from another culture stressing that important in the first meeting maybe is more of a dimmer, demure attitude that is more valued by other cultures upon the first meeting, or that find that more appropriate. But I think we have to sort of take into account that there are different reasons that people are are showing for the first impression. But on the other side, when you’re the non-profit. You do want to make sure that you are giving the best impression we can, not just in the documents that we talked about earlier, but in your leadership. So I’m always a huge fan of education and trading, and I think boys don’t do that enough for their CEOs in their board chairs. Um, so yes, way kind of expect them to have the skill on. And maybe once in a while we’ll send them to a training where they’re just sort of getting training about the secretary, you know, in a sector wide conference or something. But are we really giving them training on on certain things that might be really, really relevant, but very, very specific? So if they’re the public face of the organization, should we be giving them some public relations training or some media training? Those things, too, just sort of think about it again. I’m a big fan of training, and the board can really help by saying we want allocate some resources to this on. Make sure that we’re providing for that, that that strong first impression and understanding about first impressions on their limitations when we’re judging other people on it. Yeah, I’ve seen instances to where, um, the organization invests in coaching for the CEO. I’ve seen that I’m not a couple times. Yeah, yeah, yeah, they see promise potential. But I guess the CEO, maybe, you know, like like all of us, I mean has some shortcomings. You know, maybe it’s Ah, I don’t know what leadership leader, management of the other C suite individuals. Or maybe it’s, you know, there’s not enough team building or something, you know, whatever it is, they see a need a gap, and, uh, they invest in a coach for the for that CEO. I think that’s such a great, um, uh, allocation of research from from from many organizations that have money to invest in their leadership leadership training. I think coaching from the right people could be invaluable even for a very, very senior executive. None of us have all of the tools and all of the best qualities. Andi executive director seems to need so many different skillsets so many experiences in so many abilities. I think coaching never heard. Um, we’ve talked about we talked about the consistency across documents, and so now we’re talking about meeting, meeting the leadership of the organization and maybe even meeting some staff, introducing staff to potential board members. You want to make sure that not only your documents but you’re your people boardmember Zand staff and see sweet alike are consistent in terms of messaging, that they all have the common vision that’s laid out in the vision statement and that the articles of incorporation of the by-laws without by-laws the articles of incorporation speak to know the people all need to be consistent, as as thes potential board members are interviewing them just as much as you’re interviewing the potential board members. Yeah, I think that’s very true. And I think when the, um kind of the things that I think is overlooked right now is the importance of memorializing or documenting the organization’s value. Um, in a document like the by-laws Wait, don’t do it. We have incited a standard practice. I’m trying to think about that being an actual, um, important section of the box by-laws. Really? Okay, Yeah, I think organizations Now, um, you’re driven by your your mission, of course, but it’s not just your mission. You’re also driven by your value because if your mission was, I don’t know. We talked about this example before, but your mission was just thio. If feed homeless people, you could just wait down suit on the sidewalk, right? You could play down slop there, and many homeless people have to eat it that nobody does that right, because that’s not within our values of having people had to be treated with dignity and respect. Um, organizations just won’t do that. But we don’t explicitly say why we don’t just affect the mission, you know, to the maximum degree by just doing things without, you know, care and just laying it out. So I think it’s really important that we say what our values are and how the values that I think about are those that will guide our decisions so that it actually stops us from saying we’re gonna spend a maximum amount to get the most people served. No, we’re gonna not spend the maximum to maximize the number of people served. We want to maximize the service that we’re giving as well in balance, that and why are we doing that because of these values? And I think that has to be documented. So with that we know we actually share them with all the people, including the perspective boardmember. We don’t just assume it. That may not be true. Okay, Jeanne, we gotta leave it there. Well said he’s managing attorney of Neo non-profit Exempt Organizations Law Group in San Francisco. You’ll find the block post that we were speaking from at non-profit law block dot com, which you should be subscribed to its 12 considerations before you join that non-profit board. But I’m not sure I don’t want I don’t want a decrease traffic on hits to your site, But I think we I think we did a pretty good job of going through. Ah, all these 12. Maybe we didn’t. You know, we didn’t explicitly one through 12 but I think we’ve covered the vast majority. These, if not if not everything. Jean, thank you very much. Thanks for sharing your expertise. Thanks so much, Tony. Really appreciate it. My pleasure. Next week. Scale up and sustain with Kathleen Kelly. Janice. If you missed any part of today’s show, I beseech you, find it on tony. Martignetti dot com were sponsored by Wagner CPS guiding you beyond the numbers Witnessed gps dot com but koegler Mountain Software, Denali fundez. They’re complete accounting solution made for non-profits. Tony dot m a slash Cougar Mountain for a free 60 day trial and by turned to communications, PR and content for non-profits, Your story is their mission. Turn hyphen to dot CEO. A creative producers. Claire Meyerhoff Sam Liebowitz is the line producer. Shows Social Media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scott Stein, who is me next week for non-profit radio. Big non-profit Ideas for the other 95% go out and be great. You’re listening to the talking alternate network. You’re listening to the Talking Alternative Network. Are you stuck in a rut? Negative thoughts, feelings and conversations got you down. Hi, I’m nor in Sumpter potentially ater. Tune in every Tuesday at 9 to 10 p.m. Eastern Time and listen for new ideas on my show yawned Potential Live Life Your way on talk radio dot N Y C aptly named host of Tony martignetti non-profit Radio Big non-profit ideas for the other 95% fund-raising board relations, social media. My guests and I cover everything that small and midsize shops struggle with. 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