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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.

Special Episode: Coronavirus & Nonprofits

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My Guest:

Lisa Brauner: Coronavirus & Nonprofits
My guest for this special, short episode is attorney Lisa Brauner. We cover the laws that govern your organization and the policies you may need to enact. Staying level-headed, how do you handle travel, your workplaces, parent employees, freaked out employees, and keep all your stakeholders safe? Lisa is a partner at Perlman+Perlman law firm in New York City.

 

 

 

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[00:01:55.44] spk_2:
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 Corona virus and nonprofits. My guest is attorney Lisa Bronner. We cover the laws that govern your organization and the policies you may need to enact staying level headed. How do you handle travel your workplaces? Parent employees freaked out employees and keep all your stakeholders safe. Lisa is a partner at Permanent Perlman Law Firm in New York City, were sponsored by wegner-C.P.As. Guiding you beyond the numbers wegner-C.P.As dot com My Cougar Mountain 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. It’s a pleasure to welcome back to the Cheryl Lisa Brauner. She’s an attorney and partner at permanent Perlman Law Firm in New York City. From dedicated to working with nonprofits, her practice focuses on employment law, advising and representing employers in workplace law related matters. She has extensive experience preparing employee handbooks and policies. The firm is at Perlman and perlman dot com and at tax exempt lawyer Lisa, welcome back to the show.

[00:01:57.24] spk_5:
Thanks, tony. I’m delighted to be here.

[00:02:25.31] spk_2:
Thank you. Um, and we’re talking about a special topic, which it’s like the elephant in the room that needs no introduction. We all know Corona virus is running all over the globe. Um, just for context. Yesterday, the World Health Organization declared it a pandemic. So we want to talk about what nonprofits need to keep in mind. Let me just start with what? What advice are you giving clients is, you know, broadly

[00:04:37.70] spk_5:
so broadly? Uh, well, first of all, the situation as we’re hearing is changing on a daily basis. So even advice I gave a few days ago, maybe changing, as as the situation develops in terms of what in terms of what non profits should be doing in their workplace, I think one of the really key things is that because things were changing so rapidly that nonprofits are speaking on a daily basis with their employees about whatever information the nonprofits may have, and also providing resource is to them. So one of the first things that I and telling non profits is, have both a written communication plan with your employees. And if the employees are all in one location, if it’s a smaller non profit where they can ah, you know, have a a phone conversation or in some way speak with them about what the plan is for the workplace. So definitely they should be thinking about having a written communication to their employees that they should be having written communications to their managers. That may be a separate communication on how managers are supposed to, uh, effectively communicate what needs to happen and keep everybody Come on. DDE not panicking about the situation. I think employees want to know in this time of uncertainty what they can expect in terms of what their work is gonna look like going forward, whether they can be working remotely, whether they should be working remotely. So having a written communication plan is a good first step for nonprofits communicating to their employees. What information do we have? Um, how is this gonna affect the workplace? Ah, kind of is a broad general matter. Uh, non plucked profits are providing to their employees information about what the employer is doing, too sanitized the workplace. What are the proper hygiene things that employees should be doing? Like you know, the things that we’re getting from the CDC and information that we’re getting from state and local public health agencies about how to stay safe covering your off Employers are posting posters in the workplace, reminding and reminding employees about about hygiene about, uh, you know,

[00:05:02.76] spk_2:
for further good

[00:06:30.29] spk_5:
cough etiquette if they feel sick to stay home of those kinds of things. So preparing written communications to their employees, letting their employees no regularly. What’s happening if there’s a plan for remote work, what that’s gonna look like? Employers need to be implementing infectious infectious plans like, How are we gonna address this in our office? How are we gonna ensure that we know who’s coming to the office in terms of, you know, visitors? How are we ensuring that what the policies were putting in place to ensure that if somebody is sick they are staying home? They’re not coming into the workplace. So putting essentially putting policies and plans in place and communicating them two employees putting policies and nice about communicable diseases and how employees, if they’re you know what they should be doing in terms of they are experiencing symptoms of this novel Corona virus or, if they’ve been exposed, dealing with having policies in place for employees who may have returned from Travel Thio countries where there’s been a widespread outbreak or a community spread and things like that. So most importantly, the communications to the employees about what the plans are for controlling and containing infection on how work is going to be handled. What

[00:06:31.02] spk_2:
about communications to other stakeholders? Like I’m thinking of the board but actually even put a head of the board before the board, the people that were serving If it’s, ah, service oriented, program oriented non profit, what about keeping in touch with those folks?

[00:07:00.38] spk_5:
That’s important, too, and you know, it’s It’s a thing about communication because there’s so much uncertainty. It’s really regular communication as well as two. Here’s what we know here, the precautions that we’re taking

[00:07:02.28] spk_2:
it’s reassuring. It’s reassuring to hear from the organizations that are important to you in your life.

[00:07:09.29] spk_5:
Exactly. You know that we’re following this, that we’re on top of this, that you have any questions um, here’s what we know. So for here, the sources that we’re looking at, the CDC

[00:07:22.54] spk_0:
and the and and

[00:07:32.54] spk_5:
OSHA and, uh, the World Health Organization, the CDC is usually CDC, and also state and local public health agencies are often are often good. Resource is CDC

[00:07:44.16] spk_2:
website is really is broken down very well. It’s got different different types of industries. It’s got for for people, for offices. No, it’s it’s very well organized.

[00:07:59.51] spk_5:
Yeah, they have. They have guidance for different for different categories for schools, for universities, for interim guidance, for business s O. They’re all different categories that they try Thio address. And also there are state and local agencies,

[00:08:06.27] spk_2:
your state health, state health agencies

[00:08:26.44] spk_5:
and they provide information to so in terms of, you know, communicating with stakeholders. It’s something that can be communicated that, you know, we’re on top of this. Here’s what we know here the things that we’re putting in place to make sure that our that our stakeholders are are kept in the loop about what’s happening

[00:08:30.45] spk_0:
and then the you know,

[00:08:32.26] spk_5:
the changes that that we’re making. And I think even at the local level like New York City, for instance, and other municipalities, they may have ways for people locally to stay in touch with them. Like, for instance, in New York City. If you text a certain number, you can get you get updates on whatever it is the city’s putting out there about about the you know about the latest spread, about certain safety measures that should be taken, certain hygiene measures and things like that. So I think it’s important that nonprofits are communicating with their stakeholders, including airport members, and using up please

[00:09:08.44] spk_2:
and using the resource is that you’ve got you ticked off. A whole bunch of different resource is C. D. C from the world, the country and, you know, state and local. Um, do we have to be concerned about specific laws that that we need to stay on the right side of?

[00:10:27.93] spk_5:
Yeah. And employers need to be aware of whether federal laws that deal with disability ah, the Americans with Disabilities Act that applies to employers of 15 or more employees and states and municipalities also have their own anti discrimination laws relating to disability. So those air some things to be careful of in terms of what kind of enquiries can we make about employees? There’s also, you know, what, the At the outset of this, there were concerns about, um that there might be some stigmas or or prejudice towards towards Asian employees because of the of the origin of the virus coming from China. On that, managers really needed to be alert thio and aware of and responsive to, um, any type of any types of discriminatory comments or disparaging comments about Asians or about others that could be that could be directed to somebody because of their race or national Arjuna door or their ethnicity. You

[00:10:33.11] spk_2:
gotta you gotta nip that quickly, right? Like supposed There’s someone who’s, um, who’s Chinese and they come into work wearing a mask all of a sudden,

[00:10:52.64] spk_5:
right? Exactly. So also understanding cultural differences and managers communicating that as well, so that to prevent, you know, to prevent an employee from feeling stigmatized or ostracized because of their race or national origin or ethnicity. So that so those are some of the other issues that have been coming up actually in the workplace to be alert Thio and for those are some of the laws.

[00:11:23.75] spk_2:
What about, um I’m thinking of a parent employees. Their child’s school is closed and they need all kinds of work flexibility that they didn’t need yesterday because their kids are home now. How flexible Doesn’t employer need to be around the work scheduling?

[00:12:55.94] spk_5:
Well, I mean, I think that be public health agencies or generally our public health agencies air generally recommending that employers try to be flexible in in the policies that they have, that they apply it in a uniform way but that, you know, they should be communicating if they have. If it’s a different issue, I guess, than a paid sick leave policy, but that they should be, ah, with respect to paid sick leave if somebody sick that employers should be communicating to their employees. We have these policies paid sick leave or other policies that may be relevant, I think, to answer your question directly about that about this issue, uh, I’m seeing more and more employers who are implementing remote work policies, even if on a temporary basis, so that, first of all to help contain, spread and prevent it for safety reasons. Ah, but you do have the logistical. You do have logistical issues with, ah, with schools closing. And I think it’s really just gonna be on a case by case basis in terms of how employers how employers are going to deal with that and also different. Different municipalities also may have particular laws that deal with caregivers believe there’s our municipalities in California, for instance, where caregiving there is a legal obligation to reasonably accommodate a caregiver. So there may actually be in certain jurisdictions lost that address caregiving directly on require accommodation and why, While that may not be the case in most jurisdictions, it may be in some. And so employers need to be non profits have to be aware of where their employees were working and what laws may governed those types of situations and have and have some flexibility where they can with respect to allowing remote working. Uh, at this time way, all

[00:14:03.26] spk_2:
gotta be reasonable, right? It transcends whatthe law requires. I mean, this is Ah, this is extraordinary. So, you know, to the extent it’s possible t be flexible. I mean, shouldn’t shouldn’t you try to be, you know, without without breaking the bank or anything. But if someone’s work lens that lends itself to being done remotely, you know, Let’s try to figure out a way to facilitate that.

[00:15:01.51] spk_5:
I think I think employers are. I’m seeing more and more of it and and reviewing more and more remote work policies, particularly at this at this time, with everything that’s going on for safety and health reasons. Aside from the caregiving, the safety and health reasons. And Andy and the health agencies are encouraging that everywhere we hear that the health agencies air saying, if your employees can work remotely, let them work remotely. If you can stagger the time that your employees start to reduce, you know, to reduce their traveling at rush hour. Do that. Uh uh. So s so different, so different kinds of things. So they’re encouraging different types of different types of things. Cross train your employees so that if somebody is out sick or somebody can’t get to work, you have You’ve got someone else to cover. I’ve

[00:15:25.51] spk_2:
also heard um, uh, organization that was having people bring their work laptops home and try them out before, before we before the organization needs to say people start working from home or before the city. This was in New York or before the city maybe shuts down public transportation or something drastic like that. So figured out now how to get your tech to work from home so that it doesn’t become a crisis when you can’t get you can’t get help from the office.

[00:17:57.84] spk_5:
Absolutely. I mean, one of the things that I’m really I’m advising clients on about a lot is plan. Now, do your pre planning from your written communications to your employees to What are we going to do if somebody who you know who does have Cove in 19 comes into the workplace? Make your plans. Now, make your plans now also, what you said about the computers, even if there, even if you don’t yet have a remote situation plan now and figure out not just that, you’re gonna be sending people home with computers. But what are you going to do to ensure that your data is secure? I mean, the that your data is secure as you. All of your work now is transferred to laptops. Do you have data security and data data protection measures in place to prevent that? If you’re gonna have far more people now working remotely as opposed to in the office. Have you locked down those computers? Have you ensured that they’re not gonna be that they can’t be hacked if you have, you know, confidential your confidential information. Obviously, uh, there’s a greater chance of that of that information getting exposed or disclosed, even inadvertently. If you have lots of people out with computers as opposed to have in your office. So it’s there has to be some pre planning on how we’re gonna set this up rather than just sending people off with the computers. What data security measures do we have in place? What time keeping measures do we have in place? Right, there also questions you asked about what laws? Certain employees, non employees that are that are not exempt from the overtime pay laws. They have to track the hours that they worked. So if you have people working remotely, do you have a system in place where you’re gonna be able to track those those employees work hours? It’s important that you’ve you’ve developed that system that you’ve thought about. How does this remote work and I’m gonna work? Do we? Are we set up for videoconferencing? How Are we gonna have these? How are we gonna have the conferences that we ordinarily has, as in person meetings? Um, there are also employers are talking about not just remote work. But what are we gonna do about travel? Should we be limiting travel and all of the public health agencies air recommending that employers are limiting non essential travel for work on?

[00:18:14.52] spk_2:
All right, so So, uh, yes for work. Are you allowed to go so far as to say in your office that it would be so much better if you didn’t travel for personal reasons, like, you know, it’s better to stay home? Me. So can you encourage people to not travel at all, including for their own personal travel? Can you say that in office?

[00:19:37.52] spk_5:
So there are there certain laws insurance, certain jurisdictions like New York, for instance, where you can’t discriminate against individuals, employees for lawful recreational activity treatment less favorably. But I don’t see that there’s a reason why, in view of this certain of the, you know, the current pandemic that employers couldn’t say to employees in view of everything that we’re hearing and the restrictions on travel from Europe and who knows where else things will be locked down? Um, we discourage. We discourage travel at this time. It’s obviously up to you in terms of what travel. You take personal travel, and but it’s kind of it’s kind of a hard thing to That’s kind of a hard thing to control, because we we have We have this virus spreading throughout the United States on. We don’t know the scope of it right now, so we don’t really know all of the places that are infected or even the extent or scope. Ah, that different places are, are, are are infected so we don’t have enough tests now to even wrote test to test everyone who should be tested. So so that’s a difficult thing to do. But people will hopefully use their common sense about travel in view of whatever news that we’re hearing on a daily basis. You know, people are now going to fewer events because of just changes, things that are happening. We all know if events that we were gonna attend that have now been canceled, so things were kind of changing rapidly on a daily basis, and so there may be, you know, individual employees may decide that they’re not going to

[00:20:57.41] spk_2:
may decide on their own. And and that the change of circumstance, um, is another reason for for being open and communicating. And you know what you opened with and and doing it frequently because the situation does change and and even, you know, even if there’s not a change from day to day, it’s just reassure. Like I said, it’s just reassuring that all the all the, uh, constituents, whatever you call them, all the all the year agencies and offices in your network that are important to you are staying in touch with you again. I know I said it earlier, but it’s just it’s just reassuring. I mean, let’s not lose our humanity in all this. It’s good to be communicating about. You know, when there’s something bad happens, you know, it’s it’s good to be talking about it and not ignoring it, because that’s, you know, you become trivial and irrelevant. I just Let’s not use our lose our humanity around all this.

[00:21:09.91] spk_5:
I agree with you. I think it’s I think it’s so important that we are regularly in contact with employees and stakeholders to to reassure and to let them know that we’re thinking about them and that we will keep them apprised of any developments we learn about that we think could could impact them or service

[00:21:22.26] spk_7:
is to them or,

[00:21:24.04] spk_5:
uh, for employees the way in which they’re working, anything that we feel could impact them or be important so that with respect, what’s happening? What if it

[00:21:58.44] spk_2:
comes down to, you know, this is gonna be evolving it. We know it’s going to get much worse in the US than it is right now. We’re recording on Thursday, March 12th. It’s gonna get much worse before it gets any better. What about someone just, I don’t know, sort of freaks out in the office and says, I’m not coming to work anymore. I can’t do this anymore, You know, Leaving my home scares the shit out of me. I can’t I can’t get out. What? What? What do you What do you say to somebody like that who was just freaking out? Whether it’s with their home or their in the office, and they say they’re not coming in again or if somebody just gets really worked up in panic,

[00:23:19.48] spk_5:
I think it’s I mean, I think it’s going to depend on a case by case basis. And I say that because the reasonableness of whatever their fear is may depend on actually what is actually happening around them. So, for instance, that they’re in a place that’s a containment area like New Rochelle. Ah, and they have certain fears about leaving their house or something like that. Those fears may be greater than if they’re in a place where there isn’t such widespread. Ah ah, widespread community spread. One say so, Um, I mean, e. I think you just have to deal with the situation on it on a case by case basis, and you, like I said before, if there’s a way for not every position is gonna be amenable to remote or but if there is a way where an employer can work with someone whose position is amenable to remote work and the person is anxious about about working outside their home, then they I would recommend that they try to find a solution where the person can work remotely, if that’s a possibility, and I think also just the issue again of reassurance just continuing to keep employees aware of what information, what information

[00:23:37.21] spk_0:
be, uh, the

[00:23:52.34] spk_5:
employer has about any what they’re getting from the CDC and state and local authorities about the safety of coming to work. You know, the pope authorities haven’t said that it’s unsafe to come to work. It’s entered, In other words, that were following the guidance. Employers are following the guidance that’s being given to us by the public health authorities in our locality, in our locality, specifically because what I tell somebody in New York City or someone in Los Angeles may be different than I tell someone or in Washington state than what I what? What an employer tells someone who was in a place that has not been hit yet by the by the virus.

[00:24:59.54] spk_2:
You mentioned some That’s interesting. What about, um, people whose work does not lend itself? Thio Remote work. I’m supposed there’s they’re on site nurse’s aides or nurses or social workers. They go to people’s homes, and that’s how they that’s. That’s what I get paid for. Their work does not lend itself to being remote, um, or even. But let’s you know, maybe that’s not such a good example, cause those air their health care workers so they would have the peopie the personal protective equipment. So that’s not a good example. All right, so I stuck with a mediocre host. I’m sorry. Um, think of an example that you

[00:25:01.24] spk_5:
could have somebody work. Yeah. Really? Yeah.

[00:25:15.54] spk_2:
Their work just doesn’t lend itself. It has to be done in an office. Do they have to be paid? If if the let’s say that the locality does say, you know offices were closed in this town, do they need to still be paid? How does that work?

[00:26:10.38] spk_5:
So how it works if someone is non exempt from overtime pay laws meaning they’re entitled to overtime pay when they work more than 40 hours in a work week, they’re only entitled to be paid when they for the hours they actually work. So in answer to your question, if they’re not working, they’re not getting paid for exempt employees. If they work any portion of a work week, then they have to be paid for that week. But if they’re not working, you know, so that’s another. That’s another situation. But I think what’s gonna happen is or what is happening is, uh, employers. Employees will either use paid leave if they have it. You’re some employers say we’re gonna pay you anyway because of the situation of what’s happening. So it’s just gonna depend on the employer, But legally, you know, with a nonexempt employees, if they’re not, they’re not working.

[00:26:14.12] spk_0:
Then they’re not than they. There’s not

[00:26:16.72] spk_5:
a requirement for them to be paid. They get paid for the hours that they were

[00:27:40.74] spk_2:
okay, and it comes back to let’s not lose our humanity. Let’s you know, I potentially I see a lot of fundraising around this. Um, not not immediately, but sort of after the after effects of it. Um, for nonprofits, you know, I’m I’m thinking of one organization. Ah, well, in 10. And I know they’re not gonna mind being mentioned. They just canceled a conference, which is gonna cost them a lot of money in cancellation fees with the venues with hotels and all kind of, you know, I foreseen I don’t want I’m hesitant to say, fundraising opportunities, fundraising needs for for nonprofits to fill the void. And part of it may very well be because they compensated employees that maybe they didn’t need to legally compensate. Or maybe they could put them on 50% pay for the weeks that they that they ran out of PTO or didn’t never had enough to start with. You know, they did something. They made grants off some type Thio, thio, nonexempt employees, um, to help them, and and they may end up having to fundraise toe to make that up. But they kept their humanity. I mean, they did what was right for employers. I mean, for employees, for their staff. Um, I think I think we’re gonna see some of that when this. When? When the worst of this is over.

[00:28:27.25] spk_5:
It’s a good point for for organizations that that have made decisions too close or that or have to close, uh, and want to, you know, I want to still do right by their employees. I think I think that’s a good point. And I think we are seeing I’m seeing as well you know, organisations dealing with the situation of we you know, we need to cancel into that. We need to host an event because ah, because we can’t do it now or people aren’t gonna come. The people who we want to come have been told that can’t go toe large gatherings or we can have, Um we’re just We can’t do it at this time. So So you know, So I’m seeing I’m seeing a lot of that as well that that is a real issue for nonprofits.

[00:29:30.34] spk_2:
And I think people are gonna recognize that the need to when we get to that stage of fundraising toe meet these extraordinary expenses wherever they might be, whether their conference cancellation fees or grants toe employees that didn’t have PTO. Um, I think people are gonna hear that need. Um I don’t think I’m naive. I I just haven’t optimism that people in the U. S. Will will come through for the organizations that are that are important to them that did the right thing and and did cancel meetings, conferences or or compromise themselves in some other ways to meet the health crisis. I think donors will recognize that need and will step up to it. When when we get to that stage, which we’re not, we’re not near, but I think it’s coming. Um, Lisa, we still got a couple minutes left. What else? Anything. You want to leave people with that we haven’t even talked about.

[00:30:37.84] spk_5:
Well, I mean, I think one of the things that around this also is that they should really should be thinking about what are their plans that they’re putting in place? What are the policies that they’re putting in place? How are they going to communicate with their employees about what’s happening and and kind of keep the employees abreast of the changes that are happening? What are they gonna do with their contracts going forward into Prince of making sure that they’re protected if they did have to cancel the event, making sure that the force majeure and their contracts which which allows cancellation, is going to protect them in the event something like this, uh, we’re toe happen again to be thinking about their contracts to be thinking about remote work agreements that they need with employees and really having plans in place to be prepared. I mean, we think of also all of these universities and schools that are closing and do they have plans for remote education? There has to be, I would just say to employers, Do you make preplanned, make plans on right up your plans and communicate some two employees on what you’re gonna do in this emergency and think about emergencies going forward. And what aspects of your organ what aspects of your organization and the running of your organization. Could this impact your contracts? You’re you’re the staff that you need the supplies that you need to get. Ah, and all of those things. And, uh,

[00:31:07.77] spk_2:
and, you know, for this emergency, it’s not too late. I mean, we still have time to put these plans in place. Okay?

[00:31:14.33] spk_5:
Exactly. Maybe maybe

[00:31:20.79] spk_2:
a little remedial A rushed, Um, it may not be the best. It may not serve you 10 years from now, but you know, you’ll have that time to figure it out after this crisis. But it’s again. It’s Thursday, March 12th. There still is time to be rational and plan and put these things in place that you’re talking about. There’s still time.

[00:32:22.94] spk_5:
Absolutely. And I think so. I would say I would say, Tom, yes, they come and get on it and start planning. Make sure that you’re doing these plans and that you are and also the employers air staying alert to what the public health agencies air saying on dhe to communicate that to employees. So, absolutely. As you know, somebody had said, uh, keep calm and wash your hands and and and and make your plans. It’s not too late for employers to be planning. And I think that’s what they need to be focused on making these written communication plans to their employees, reassuring their employees. I’m keeping them employees Ah aware of whatever the latest developments are with the public health agencies at the federal, state and local levels.

[00:32:30.84] spk_2:
It’s not too late, but the time is here.

[00:32:33.84] spk_5:
The time is now. If they haven’t done,

[00:32:49.94] spk_2:
isn’t this thing isn’t going away? So it’s not too late, But the time is now get going exactly at least a brother. We’re gonna leave it there. Thanks so much. At least there’s an attorney and partner at Perlman and Perlman Law Firm. You’ll find the firm at Perlman and perlman dot com. It’s p e. R l permanent perlman dot com and at tax exempt lawyer Lisa. Thanks so much for doing this on the fly. And ah, well done. Thanks so much.

[00:33:04.04] spk_5:
You’re welcome. Tony. Take care and be with

[00:33:47.74] spk_2:
you. Our creative producer is clear Meyerhoff sama. Liebowitz is the line producer. The show’s social media is by Susan Chavez. Mark Silverman is our Web guy, and this guy’s this music you may not be hearing, but you might be. I’m not sure whether we’re gonna get music in the post production, but anyway, our routine music that you almost always here is by Scott Stein of Brooklyn. Many thanks to Sam and Susan and Mark for helping me get this special episode out to you in short order My thanks again to Lisa Brauner and prominent Perlman for doing this on the fly You with me next to me next time for non profit radio big non profit ideas for the other 95% go out and be great.

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

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My Guests:

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 November 22, 2019: Recruiting Your Next CEO

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My Guest:

Dennis Miller: Recruiting Your Next CEO
“As a board member of a nonprofit organization, the most important responsibility you are likely to assume will be to hire your chief executive officer.” So starts the book, “A Guide To Recruiting Your Next CEO.” Author Dennis Miller walks us through. (Originally aired 12/22/17)

 

 

 

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[00:01:52.10] 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. Oh, I’m glad you’re with me. I’d be hit with extra fee if you turn to my stomach with the idea that you missed today’s show recruiting your next CEO as a board member of a nonprofit organization, the most important responsibility you are likely to assume will be to hire your chief executive officer. End quote. So starts the book. A Guide to Recruiting Your Next CEO. Author Dennis Miller walks us through that originally aired on December 22nd 2017 on tony Stake to Last Call for Innovators 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 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. Let’s get started with recruiting your next CEO. I’m glad that I can welcome Dennis Miller back then A C. Miller. He’s a strategic leadership coach and executive search consultant with more than 35 years experience working with non profit board leadership and chief executives across the country. He’s managing director of the nonprofit Search Group, an executive recruiting firm. His latest book, His Fifth, is a guide to Recruiting Your Next CEO, the Executive Search Handbook for non profit Boards. You’ll find Dennis and his book at Dennis c. Miller dot com. He’s at Dennis C. Miller, and I’m very glad that his book brings him back to non profit radio. Welcome back, Dennis C. Miller.

[00:02:04.96] spk_0:
Happy to be back, tony.

[00:02:07.65] spk_3:
Well happen years coming up. Yes, stopping here. That’s appropriate. I’m sorry. Thank you. And to you, what is the sea for? In Dennis c miller dot

[00:02:16.33] spk_5:
com and

[00:02:19.24] spk_0:
Charles my father’s names. So many Dennis mellows and grammar school in high school we put in and I’m very proud to be

[00:02:26.45] spk_3:
Charles. All right. You don’t mind if I don’t call you Dennis C. Miller the whole hour, though

[00:02:29.68] spk_5:
I just call

[00:02:30.56] spk_0:
me dad. You’re like,

[00:02:33.46] spk_3:
OK, now, Dennis, we have to be. And it has to be anymore. Denigrating the dentist. Venice. Fine. Now you’re by phone. You’re in. You’re in Los Angeles. Is that right?

[00:02:41.44] spk_0:
Yeah. I’m actually in the Los Angeles area of isn’t That’s a business appear this week. And now we’re spending time my wife and I with our two sons and their families and grandson out here in Los Angeles and heading up to Santa Monica, Santa Monica Pier right after the show. So

[00:03:03.90] spk_3:
All right, well, we won’t hold you up. In fact, if you want, take off now, we could just bag the whole thing. You need to go. Public transportation is gonna leave in five minutes or something, or you’re OK.

[00:03:08.12] spk_5:
Oh, you’re okay for the

[00:03:37.83] spk_3:
hour. Okay, now, remember the last time you were here, you almost had a heart attack. You were running down the street. You were late. You’re you’re ah. Um, your cheeks were rosy. Your heavy breathing. You need a few minutes to take deep breaths. So now you’ve after to go to Los Angeles, And this way you can call him by phone. Okay? You don’t worry about running running to the studio, okay? Okay. You didn’t have a heart attack. You know what I was saying? No salmon. Every little word

[00:03:40.59] spk_5:
had a regular. You may have.

[00:03:41.29] spk_3:
No, you did. You had a high. You definitely had a heart, a heart because your face was red. All right, Um, why do we need this book? Why are you causing trouble with this tome?

[00:04:38.17] spk_0:
Well, think about it that there’s probably over a 1,000,000 more. There’s more than a 1,000,000 non profit around the country and with the number of people that are dissipate to retire over the next five plus years on any research a staggering, sometimes closing 75% the the vast majority of people went into the non public sector, and leadership positions were baby boomers from the sixties and seventies went to sort of the cultural change and wanted to commit themselves to having a big impact in the community. So there’s a lot of retirement going on, and the biggest responsibility that a member of the board can have is selecting the next CEO. And on top of that, when you think about the challenges of the environment in the non public sector, the leadership conferences have been dramatically changing. So it’s an important time for board members to understand what is needed to recruit in. Actually, that’s why I wrote the book

[00:04:44.83] spk_3:
OK, 75% turnover in the next 10 years we’re gonna have,

[00:04:54.41] spk_0:
I’d probably less. I mean, it’s It’s quite a bit if you think about people that grew up in the sixties and seventies, you know, it’s now 2017 and people in their sixties and thinking about stepping down another part of life and a lot of recruitment gonna be needing.

[00:05:18.54] spk_3:
One of the opening questions is whether we should go this recruitment alone or hire a such consultant. Now you’re you’re biased. You say that in the book, you’re biased. But can you weigh the pros and cons for us?

[00:05:23.83] spk_0:
Yeah. Listen, um, I’m biased. Certainly if someone if someone wants to go about it a lot, I think the book will help them with that.

[00:05:30.04] spk_5:
Uh, sure you want

[00:06:28.17] spk_0:
to go in alone Is this year you have people on the board or staff with the expertise and recruiting. Do you have the time commitment that’s gonna be needed for the board members to not only identify the profile of the next candidate but spending the time and now is reaching out and screening candidates. So there’s a lot of work involved. I lay out those steps in the search committee. Klaus is here. I think that what a lot of people doing today is realizing that, you know, whatever the figures, that they’re gonna be pain and most trees probably in the area of someplace between 20 to 35%. All cases, 25 that the advertiser over five years and sometimes really not that high. And yet, so you wanna have an expertise. There’s like anything else you need a lawyer of financial account. You’d be hiring someone. It’s a challenging thing to go about on your own. And the other aspect, tony, for people who want to go about on their own, is by just posting sort of ads and social media, whatever. You’re gonna only get two people that are looking for a job and you don’t know either how good they are, how well performing they are if they’re happy a search from is gonna recruit people that are not looking for that job. And that’s part of what you want. What? I have

[00:06:46.44] spk_3:
those percentages that you quoted that’s of the first year cash compensation. Is

[00:06:52.11] spk_5:
that yes.

[00:06:59.72] spk_0:
So someone makes ah a position whether the CEO, our CFO or development unable to save the position was 100,000

[00:07:01.00] spk_5:
dollars. You

[00:07:01.95] spk_0:
know, the average three is gonna be $25,000. But this day, five years, it’s $5000 a year, which comes out to about $100 a week or 20 hours of any. And you know, the thing about it’s probably the smartest investments that aboard wouldn’t want to make.

[00:07:23.99] spk_5:
Okay, Noah, particularly you get the right portion. Okay? And I

[00:07:24.54] spk_3:
guess the main advantage of going in on your own is you’re saving that fee.

[00:07:28.54] spk_0:
Well, you saving the feeble you also, you better be prepared for the time that your board is gonna

[00:07:33.84] spk_5:
happen. That

[00:07:34.43] spk_0:
so that you poisoned cons here. But most most really good organizations will use a search firm for certain keys positions.

[00:07:45.03] spk_3:
Okay. Okay. Um, let’s say we just have about a minute before Ah, first break, Dennis. Oh, let’s just identify that this CEO change is not something necessarily to be feared. I mean, just in a minute or so. This could be an opportunity. A great opportunity.

[00:08:30.56] spk_0:
What? How you look at him and I’m We’re doing a search right now. When we’ve got the finalists. Been seen by the search committee and beginning this is that this is the first time this organization has used a search firm and, you know, they admitted they made some mistakes in the past. But you’ve got to go from not a crisis to. This is a phenomenal opportunity to not just take it, get a new leader, but to have an assessment of your organization and have some advice and give me and people get on the board. And we’ve been here for quite a while or fairly new. It’s a exciting time to take a first look atyou organization. So what if the glass is half full? It’s I look at it is very exciting time when organization most clients feel the same way,

[00:09:30.24] spk_3:
all right, and we’re gonna talk about that. That assessment right after this. Right now, it’s time for a break. We have used the service’s of wegner-C.P.As for many years. Their service is excellent. The auditors provide clear directions and timetables. They’re professional and thorough, but also easy to work with. They answer questions promptly. End quote. That’s an HR professional in Hillsborough, North Carolina. If that kind of C p. A. Could be valuable for you. Your non profit. Then check out wegner-C.P.As dot com. Let’s do the, uh We got some live listener love. Let’s do it good. We do. And we’ve got Seoul. South Korea s o. I gotta tell you, soul. So, uh, so consistent. Such loyal listeners in Seoul, South Korea On your HASA an io io comes a ham nida, which does not

[00:09:30.77] spk_4:
mean live. Listen, love out to you, but I’m

[00:10:47.14] spk_3:
grateful Soul always with us. Thank you. Um, Victoria that they can. Krista In Brazil, there will be a brain a star this on da lively love Love out to, uh, Brazil. Thank you for being with us. Ashburn, Virginia Tampa, Florida, New York, New York and, uh oh, another South Korea Chung Wan The same greeting goes to Chung Wan annual Hasso come So ham Nida. Glad you’re with us. I love it and they’ll be more, but I felt like doing the live love earlier today. And the podcast Pleasantries. Thank you for being with us. Thank you for being a podcast listener of non profit radio. I’m glad that we fit into your podcast listening wherever it is and whenever it is pleasantries to the podcast listeners, Let’s go back to recruiting your next CEO. Now back to Dennis Miller and his book recruiting, Ah, guide to recruiting your next CEO and Dennis C. Miller. So let’s talk about that. That possibility for assessment you Ah, you say that you might, uh, considered doing strategic planning, I guess, if you have time before getting into the recruiting process for the next CEO

[00:12:12.61] spk_0:
Yeah, well, the you know the question always is You know what comes first, right? Chicken or the egg? Tony, do you hire a CEO or do you hire or chief development officer before you have a plan and and, uh, kind of it’s up. It’s up to decline the organization, but give me a couple examples whites sort of better to at least an idea of where you want to go on what you want to achieve. So let’s say you wanted to. You go out and hire a CEO, hoping that they will build your plan and let some party. A plan is to be more involved in philanthropy. More involved in the cultivating. So seeing donors, what if that seal he just hired doesn’t have that experience? Well, now you’re stuck. So what if your need is to grow your board and the new CEO? Yes. Sorry doesn’t have that. So one of the things that I recommend the clients is that’s not necessarily happen to have a full blown strategic plan. But certainly it’s a good idea to have a real sense of your strategic vision. Where you headed. Will you want ahead? What? Some of the big strategic goals you have? Um, what things that you need to get done. And then, obviously it’s much easier than to identify the the characteristics of the qualities and experience of the CEO. So you bring someone on board who is the right cultural fit for you organization. So that’s why it’s important to take a look at kind of way. You want to go before

[00:12:21.57] spk_3:
you say that If you’re not gonna do a full full blown strategic plan planning process, you want to at least identify what your organizational goals are.

[00:12:45.52] spk_0:
Yeah, I mean, I think there are some people that don’t do a full blown strategic plan. I think that you could do that, but I think more importantly, what you want to do and a good search from what we do is we do sort of an assessment of where you’re at in your life cycle as an organization and as a board. Um And then we interview members of your board and you’re seeing your team to get a sense of, Well, you’re at that helps us or dramatically beginning the on boarding closet with your next CEO. So we know kind of what their challenges are versus going about it blind. So I do think that you wanna have and I point this out in the book. You want to have a sense of your strategic vision where you’re heading and pick up some of the key goals were having Yes. So when you’re interviewing came that you want to make sure their line with those gold here and it makes much smoother transition,

[00:13:24.42] spk_3:
some of the goals you lay out besides mission envision our fundraising and development. You know what you wanna do around that? You’re bored CEO relationship? Your programs and service is andi Course. You know, the book explains what goes into detail each of those, but, um,

[00:13:31.78] spk_5:
I had a couple of

[00:13:45.44] spk_0:
it. Certainly, you know, you walk additional capacity. What do you have in terms of leadership development? Do you have, Ah, plan to develop the people you have there? What’s going on with you? Border. You building the right board? Are you branding your organization and communicating that the impact you’re having? It’s important things today, So there’s a lot of, ah, strategic goals that one should be having with this pauses. And, uh, you want to get a sort of buying from your board and have the new CEO committed help implement this employee.

[00:14:33.50] spk_3:
And okay, so this new CEO is gonna have need to have some skills, and you make the point that you don’t want to be constrained by what the what the skills and talents of the existing CEO are. We want to be thinking beyond that. I mean, that’s that’s part of what this organizational either planning or identifying the goals is gonna do is help you look forward, not current. You know you just don’t want you don’t want to just replicate the current CEO’s talents, but you want to build on those for the for the future, and you identify a whole bunch of potential skills that you might be looking for a visionary thinker, entrepreneurial spirit relationship builder, et cetera. But you wanna be going beyond the current.

[00:15:37.66] spk_0:
Yeah. I mean, it’s easy question when you have someone you know, Uh, you know, what kind of ah kind of deal are you looking for? And that the person who’s been in the job for the past 10 50 years for name is Surely people would be like someone like Charlie. Well, maybe you do. Maybe you don’t. I think that the challenges that your previous CEO had may be silly, but they also be very different. And one of things that you just mentioned that I have in the book in another books. In my work, I D’oh tony, is the idea of today’s competencies were, uh, executive leadership, non public sector, dramatically different than they were 5 10 years ago. There’s nothing wrong with what they were in the past, you know, aboard, we’re looking for someone who was a a mission based person who could have built a good relationship in the community, probably someone who could manage people in programs and perhaps someone who could go out and get a grant. Though their skills are still important. Today they look for more than just kills but compensation traits such as they want a visionary thinkers today, when the House, the CEO or executive director would implement the board’s vision. Today, boards are looking for CEOs to create their own vision

[00:15:55.82] spk_5:
cream organization.

[00:16:34.49] spk_0:
I want a visionary thinker, which takes coverage of creative vision number two. Certainly people want the idea of relationship. Will the building relationships outside inside the organization, someone who’s a social entrepreneur who can help develop the resource is important, ships that you need not just managed and when you got So is a whole series of conferences that identify in the book, including, you know, being a collaborative non about how big of a budget you have in control. It’s about collaboration. So, yes, there is a lot of new compass is out there for CEOs and executives, but I use the term some of the CEO jacket director do all the time.

[00:17:04.11] spk_3:
Yeah, that’s fair. That’s fair Fares. Similarities. Yeah, of course. Um, I did have a guest years ago. Uh, Eugene Fram he was a professor at I think he was a university of Rochester. Andi made a case that he wanted it to be the CEO. He he felt that chief executive officer conveys a greater gravitas than executive director and CEO. That chief executive makes it less likely doesn’t make no guarantee. But let’s like that. Board members will get involved in the nitty gritty, the day to day management, you know, be be micromanaging a CEO versus an executive director. I did you give any preference for one over there? I know the book uses anonymously, but you have a preference for one over the other

[00:17:40.10] spk_0:
radio. You know, tony, the point you’re raises a really good one, and I do have a pilot in the book of my work. But I do think today the more contemporary title is chief executive officer, um, the more contemporary title is board, ship or support president. What you kind of the past is, um, it may just be words, but I think they have a lot of

[00:17:42.99] spk_5:
connotations. They do find themselves.

[00:17:53.44] spk_0:
I’d like to see board chair for sport president. I think the top lay personal pipe a person should be the president CEO, and I think that was profit last year right there. When you’re out there with donors. So it’s more than just an executive director, um, overseeing the apartment. You really keep executive making things happen. I do. I do before the word CEO

[00:18:07.92] spk_3:
on and also executive director. I mean, that’s that’s sort of a uniquely non profit term

[00:18:13.17] spk_5:
way. Want to think that

[00:18:15.38] spk_3:
running like businesses run this thing like a business happens to be a nonprofit corporation?

[00:18:19.26] spk_5:
But don’t tell

[00:18:22.79] spk_0:
mother interviews with you. It’s came up the term, you know, non properties. You tax

[00:18:26.85] spk_5:
that business

[00:18:29.26] spk_0:
plans. I think it’s important that today’s title be CEO. I just really think that’s important Title that have

[00:18:38.81] spk_3:
Let’s get into some nitty gritty. I want to start with the the search committee who belongs on this thing.

[00:20:03.91] spk_0:
Well, clearly, I think the this you know that in terms of size of the dominant members of the search committee should be members of the board. Now, can you have a non board member on this? It’s absolutely who might that be? Well, if you have someone on your community that you know has experience with search, maybe a human resource background and then on your board, you want to get their advice and gets a good. That’s a good conclusion. But generally speaking, if you have a board say of 12 to 15 people, you may want a search committee of maybe five, maybe seven maximum. But I’ve seen larger or smaller, so sizes of the committee is important. Number two be tremendous amount of time commitment. So the members of the search committee have to realize it’s going to be an involvement here in some time. And then obviously the key part of that will be who will be your share of the search committee. In some cases, it’s a chair of the board, which is completely appropriate. Other times that could be the vice chair of the future chair. Ah, lot of people ask me all the time would it be okay tohave the form of a former board chair, a strip search committee? And I would say, Maybe I would say, maybe on Lee, because if the former board chair eyes focus about what happened yesterday and not involved as much in your strategic planning for

[00:20:09.73] spk_5:
the future, not so much because

[00:20:10.19] spk_0:
they won’t know exactly what they’re looking for.

[00:20:12.06] spk_5:
You all right?

[00:20:21.88] spk_0:
This is committee has got to be a forward, approaching organization, afford poaching committee. I think that’s kind of that’s something that I would be looking for a nose of membership.

[00:20:25.04] spk_3:
What about an employee putting one on one employee on the committee?

[00:20:28.94] spk_0:
I don’t think that’s a good idea. Actually, I think it’s a bad

[00:20:32.91] spk_5:
idea.

[00:20:33.45] spk_0:
Come out Whiter Bay and say not give example.

[00:20:36.04] spk_5:
Okay,

[00:21:21.00] spk_0:
Uh, I’ve had people wondering to put the, you know, you know, the current CEO on the search committee, and I The answer is no. Then Walvis of the current CEO, Timmy, and help in the search committee and the consultant, or either inside or outside of what a search committee helped develop aspects of the position profit. What will be the ideal qualifications and experience of the next CEO? But the board hires and fires a CEO. It’s also very uncomfortable for a current CEO to be on the search committee. I had a case where, um, it wasn’t my search client, but it was my client that I helped with succession planning in. They had an internal candidate for the position, and when the search committee as this person, what changes would you make? She’s very awkward to be talking about the changes you want to make with

[00:21:29.27] spk_5:
us. Of course. Right

[00:21:43.45] spk_0:
eye. But now there’s times when you get there, some people that have their VP of HR on the search committee of the knee that lays on. But remember, people, it’s not a good idea. Have staff. It’s not good to have senior members of the committee on the search committee. It should be his board Members of Donald.

[00:21:49.42] spk_3:
Okay, predominately. And then you said, maybe a volunteer,

[00:21:53.09] spk_0:
if you need expertise. I mean, if you know, if you’re going to not have a search committee and may Sometimes people can hire a certain person not to do the search, but just give advice. But I think you want someone on the committee that has experienced in recruitment, identifying screening candidates and all that’s happened things, so

[00:22:11.40] spk_5:
you could

[00:22:11.84] spk_0:
build it up. Great.

[00:22:15.91] spk_3:
Okay. Okay. Um, this search committee has to assure that applicants confidentiality is gonna be maintained, right?

[00:22:41.07] spk_0:
You want a crucial because I make it clear to all my such amazing you could be you could be sued for. Ah, um we could be potentially have a liability for exposing that there is a candidate. You tell your friend, by the way, you know donating. Is it been interviewing for me and and before you know it, Tony’s employer finds out, you know, feels like this is loyal to the prom, so you have to protect confidential. It’s something that I have to establish the trust of my chance coming in. They’re out. They’re they’re adamant, and it’s just it goes with the same goes with the business. I have to keep them confidential. There’s no way can let people know they’re seeking a

[00:23:07.71] spk_3:
job. And this goes partly to, ah, the time commitment. You know, if if there isn’t a ah ah, a search consultant helping some of these conversations that the early stage is gonna have to be after hours people are gonna be comfortable talking between, you know, nine and six PM

[00:24:12.45] spk_0:
Yeah, I had, you know, in our business is growing tremendously. What’s what’s going on. But you know, when people you know, maybe I’ll do it myself if you can. It’s up to you, but the time involved for not just the identifying the characteristics and compasses of what you want, but the outreach to potential candidates. Very time consuming. If you’re going to delegate that members of a church Dominion war So you know professionals are working or even retired. It’s a lot of work involved in screening people, scheduling interviews, scheduling meetings, being qualified to interview people. It’s a lot of time. Of all the narrowing candidates down and doing the reference checking, it’s quite a bit. So there’s a lot of work that’s involved in the process, not just putting in and out there and then, you know, interviewing kids. It’s quite a bit of work to both sell candidates on why they want to take a look at this opportunity. That’s really important,

[00:24:17.63] spk_3:
which is when I was just gonna point out that you say something that caught my eye was very, very interesting. I hadn’t heard before that the search committee has an obligation to our role Thio be selling the applicants on the organization Not

[00:24:30.88] spk_5:
just to be not just to be a neutral a

[00:24:33.02] spk_3:
neutral committee, but be advocates for the organ.

[00:24:52.80] spk_0:
Yeah, I mean, the cannon is gonna come in, they’re gonna come in prepared, and they’re there to sell themselves. And what often happens on some cases where the search committee say, Jeez, I thought, you know, how come they don’t think that we’re the best thing since sliced bread? Well, you want to convey a sense of optimism, a sense of enthusiasm. So you need the candidate’s gonna besides what the search consultant is gonna be telling them about the organization of recruiting for as a search committee, a CZ members that you want to be portraying a very positive image. You want to be sort of extending your hand. You want to be greeting them. You want to make them feel welcome in warm, even if you’re not gonna be selected them. And you noted on the process you want to believe with a very positive for Donna. That’s a major all the search committee as it is.

[00:25:43.32] spk_3:
All right? Yeah. Interesting. Let’s move, Thio, Resume screening. You got. You got a ton of tips you’ve you’ve reviewed thousands of. But you’ve got You’ve got a lot of tips to share. Share a couple of resume screen tips Now, we’re at that stage that these things are coming in. Resume resumes a lot of resumes coming out share, share a couple of resumes, screening tips,

[00:26:33.79] spk_0:
a couple things one of things you want to look for is Clary right off the bat asses. Clary. Is it clear as to how their name and how to get a hold of you? You don’t always have to have your home address these days, but certainly a phone number and email address. I think I look for one of things that we look for on our team is more of a chronological history. I want to know kind of where, where’s your career bed and a couple of tips you look for someone’s been, you know, in a job every one or two years, and they leave quite quickly. That’s a that’s a signal potential red flag, red flag were bad thing, but it should be there. The other thing that those there some people for it is the functional resume where you get a sense of what their skills are experiences, but you never get intensive where they perform that. So two things on a resume, both for people that are considering throwing their hat in the ring on applying for a position or responding to a search from is clarity is the resume clear of what I’ve accomplished is it clear what have achieved as a clear in terms of the timetables have. And I think that’s a couple of tips on the resume that it really

[00:26:51.37] spk_3:
yeah, that that gap in employment that could be a woman who took time off to raise Children

[00:27:00.22] spk_5:
absolutely. Was a caregiver was given for power

[00:27:11.59] spk_0:
that was concerned about a gap. And I said, Just tell him you have a PhD in parenthood. I mean, should be proud to be a parent way. Don’t have parents. We don’t keep that one. So I think it’s totally appropriate. But be honest with what you don’t want to do is start to cover things up here, Um, and so the, you know, present yourself in a positive tone. But certainly be honest if you took a couple of years out or time out to raise Children and be proud of it. And you did but these skills and bring back the table, I’m educated Workforce.

[00:27:30.47] spk_5:
I think

[00:27:31.17] spk_0:
I’m playing with that.

[00:27:34.97] spk_3:
Let me ask you a quick one. Does this turn you off? When you see people with email addresses that are Hotmail or a ol? Does that suggest to you that somebody is out of touch with technology

[00:27:58.20] spk_0:
now. I don’t know. Not any. Tell you why? Because most of them have to e mails. They have their business email and the personal email. And so they don’t want ah, search from or an organization that there may be talking to going into their professional at work email

[00:27:59.17] spk_5:
like, Yeah, I get that.

[00:28:04.63] spk_0:
I’m okay with the Gmail accounts. It’s when I see you know Dennis at, you know, big love dot com. I

[00:28:11.83] spk_5:
have Is that you? I’m gonna try that one. Yeah. Okay,

[00:28:15.05] spk_3:
but wait. Yeah, And then when did the e mails that are unprofessional? Like baby cakes, you know, But

[00:28:25.47] spk_5:
I don’t want no baby cakes. Yeah, that’s unprofessional, but all right,

[00:28:27.77] spk_0:
I think it’s a potato to protect you. You know, your privacy from work. I think that’s fun.

[00:28:47.61] spk_3:
All right, but let me ask you. But but my point was, if it’s an added, you know, sort of added date domain, like a o. L or Hotmail or yeah, you know, does that suggest to you that somebody’s not hip with the current with technology? Now,

[00:28:51.94] spk_0:
if you know, if you haven’t out of the email address, and then your resume looks out of date and it’s not clear that’s not gonna help you. So if that is your email address, um, and at that, eh? Oh, well, I mean, I’m flying with that.

[00:29:05.98] spk_5:
I’m

[00:29:06.37] spk_0:
playing with that.

[00:31:31.72] spk_3:
All right? Long is not baby cakes today. Oh, well, all right, way Need to take a break, wegner. No. Cougar Mountain Cuckoo Mountain software designed from the bottom up for nonprofits. What that means for you is that it’s got what you need. Like fund accounting, fraud prevention, grant and donor management. Custom reporting the awesome customer service. Cougar Mountain has a free 60 day trial on the listener landing page, which you will always find at tony-dot-M.A.-slash-Pursuant. Now it’s time for Tony’s take to last chance. This is the last call for innovators with doing the innovators. Siri’s in early 2020. Got a bunch of people I could use a couple more if you or someone you know, our, um tackling a problem or just approaching whatever challenges day to day issues in a different way. Then you think your ah, your colleagues elsewhere are and you’re having some success with it. Then I’d like to talk to you because you might be right for our innovators. Siris, Are you Are you innovating? Whether it’s any the fundraising topics which are myriad or its board relationships or could be bored recruiting CEO recruiting like we’re talking about today, whatever it is. Program management. Um, if you’re doing something innovative, tell me about it. Let me know you got You’ve had some success at it and let’s talk. Let’s see if there’s a fit for our innovators. Siri’s. You can get me at tony at tony-martignetti dot com or used the contact page at tony-martignetti dot com. That is tony Stick to. Shall we continue with Dennis Miller and recruiting your CEO? I say we shall. Dennis Miller’s with us. You know him? We’re talking about his book, A guide to recruiting your next CEO. You know, we can’t We can’t cover the whole book, so just get the thing. For goodness sake. You know it’s a dentist. See miller dot com. That’s where you’ll find dentists in this book. Just get the damn thing. It’s just that I don’t know how to make it any plainer. All right, anyway, Dennis, let’s continue our joint through Um okay, so we’ve got a bunch of resumes and the book goes through Lots of lots of resume screening tips. I mean, when I don’t have time to go through all the tips, but there’s a lot there. Um, now we’re into interviewing. So you say there are two things were looking for. They were looking for the interpersonal and skills ability.

[00:33:40.69] spk_0:
Absolutely. I mean the entity process. Once we screen people intense of un resume on paper, we certainly begin actually with phone interviews and then once leaves, go to the phone in the process, and we can get a better sense of where they are. As a potential candidate, we may explain a final car weather at one. A salary package, so without can’t be wasting people’s time here. But there are a couple of two things you’re looking for. Um, do they have a cultural fit? Do they have interpersonal skills that will build your team on 18 builders or the You know, are they collaborators of the good communicators? And then obviously did they have the ability to deliver positive results. And I think those two things is what kinda, you know, separates the people who get to positions of those that don’t hear. I. We advised. Certainly the search committee on you know the question should be focused on Limited tony, too. You know, their person’s behavior, their skills, their experience, what they bring to the table, not things that deal with things like, you know, age and discrimination and gender and all those kind of things that you want to avoid. But the bottom line is who can communicate their ability to get along with people because it’s a team game and committal results. Those are two things that are a crucial now, one of things that you may ask me. I just want answers ahead of time is we have and your listeners could get if they contact and get onto our newsletter. But we at non profit search dot com, we provide a candidate matrix that has sort of a scoring sheet with certain questions on it. I would have told a score of 50 and whether it’s on leadership, communications street, strategic planning board relationships, etcetera. So when people actually going to the interview process on the search committee and you’ve got 48 people supposedly going in the search committee members can evaluate for people and where people come out. Usually it’s good to have with them.

[00:33:52.62] spk_3:
You have a lot of resource is at the non profit search dot com. So, uh, you mentioned throughout the book, but that’s scoring Matrix is one of them. All right, so let’s get into some details here now. Is the whole committee meeting with every, um, every candidate? Because if it’s subsets of a committee meeting with different candidates, then I don’t. That doesn’t seem fair to me because different subsets air gonna judge people differently.

[00:34:35.03] spk_0:
Yeah, well, here’s what we do. Um And, um, the answer is that the entire search committee needs prepared to interview all the candidates. Now, in a case we just have here because it’s got multiple locations, there are actually eight people on a search committee and four will meet in one location and four met another location. Actually, each candidate each of the five final candidates you met which twice, but they but they are all seeing yet you cannot have one group meet so many candidates and another good meet the only other candy that’s part of the process with a search committee he’s gonna be on the committee. You have to have the type of every every candidate to be seen by every person

[00:34:54.42] spk_3:
you advocate. I mean, this is sort of a no brainer, but just make it explicit, you know? You don’t want to be asking Yes, no questions. You are open ended questions.

[00:35:35.66] spk_0:
Yeah, you hear? You don’t want to say, You know, uh, you want you want engage him in conversation and they want engage you in conversation too. And so, you know, asking questions. What was the most challenging thing you had a deal with in your current position? On your most recent position? What was the your biggest achievement? Uh, he has an issue for us. How would you deal with it? Stay away from the yes or no questions. And we have, You know, we’ve identified on a website and our resources and our book here. No question to be asking, but it’s not open it. Not not yes or no Open ended question. Engagement of conversation is the best.

[00:35:43.20] spk_3:
Okay, uh, let’s say we’ve everybody has interviewed all the candidates. Uh, now what’s our next step in the committee?

[00:36:55.22] spk_0:
What will you want to do is you wanna have everybody son of score the candidates and give feedback on the candidates and have the board chair or someone assigned to oversee the accumulation of all the scoring so you can see how people did. And then what you want to do is and what we do is I have I have a conversation with this share of the search committee, and then, uh, I will then meet with the search committee, or one of my senior member of the team will meet with the search committee, dependable of the searches and what it’s for. And then we they may determine that. Listen, there’s one final candidates. There’s just one person they like and they want to bring him back to meet with people in the organization. Take him on a tour or there’s two final plans. They’re not sure. So there’s a process here. The pluses here is obviously to let the other candidates know that they did well and they thank you before participating. But there’s someone at this point in time that has a skill centre experience that’s Maur meets the needs of my client. We hope to see him again. The future and then focus in on having to help them make a final decision on the candidate before we get involved and advise him on making making a final offer on an employment contract. Employment agreement

[00:37:14.41] spk_3:
right now in this scoring, Obviously, some were going to score highest in High Esten higher than others. But suppose there’s just there’s just a sense that, uh, you know, even the highest scoring one or two just they’re just not right. It was just, you know, like I said, every in a group of five. Somebody’s going to score the highest. But even that highest one, they just don’t feel right, you know? How do we way feel like we may have to go back to the go back to the recruitment process

[00:37:36.37] spk_5:
Well expressed. Happened,

[00:39:20.56] spk_0:
uh, you know, only once in my recent experience where, um, in most cases, uh, in addition, the scoring members of the search committee and you know, as you know, the millions of millions of people that serve on non proper boards throughout this country and in other countries. In Canada, you know, our bright, committed people, they gotta see it. You gotta feel for, you know, who you think would fit in here. So usually you know the scores will help you because it gives you a feedback. But usually you get a kind of feeling who would be the best person for that If there’s a situation, Um, that, you know, the search committee sees the final candidates. And if it happens that you feel like there’s, you know, just not feeling it for those candidates, I absolutely would highly recommend that you go back and do the search again. We have a situation with a very prominent national foundation. We started with believing out of pool of 18 candidates, uh, knit, knit up, down with it down to 11. That was down to five. And five people came in. And so the entire team and that team in there identified, you know, two people and, uh, lo and behold, some discussion and some some time issues, and then people not sure what decision to make. And it was some inexperience on the team making decision, and they kind of planted and they just so I’m not sure I’m ready to pull the trigger. So we were disappointed for the work we did. We will back out into the search again and usually don’t get the great candidates again. And we did, and it worked out. So if for some reason you don’t feel it, I dont just say, Well, because there’s a high score because you’re gonna live with this person quite awhile. Usually does not happen. Tony.

[00:39:24.64] spk_5:
You, um

[00:39:34.96] spk_0:
you know the search for doing the work, you’ll get the right candidate. But if it’s amazing, you feel that, you know, I just don’t feel it. So this person is going to fit in here that don’t just pick someone because of scored. The scores are one of the many tools will you offer to help you pick your candidate?

[00:39:41.30] spk_3:
Is this the stage where we should be calling references? Now we’ve We’ve narrowed it down to our top two or

[00:39:45.51] spk_5:
so.

[00:40:20.91] spk_0:
So what will a CZ We get? The final can’t wait, Do ask for reference, but here’s what we do. We don’t ask them. They tell us who they’re going to use this reference. We are specific and ask him for the type of reference we’re looking. For example, in a CEO case, we know they can’t talk about the company we’d liketo have been talked. We’d like to talk to someone who is a board member, maybe a board member. Another organization would like to talk to someone that appear that they have done a lot of work with. We would like to talk to someone that has worked for them. So, uh, we don’t always talkto the references. I had a time because if you’ve got four final candidates, we it’s not about our time. It’s that we if you’re not going to be chosen, why go through the hassle of asking people and speaking to the reference But with your Jarious final candidate, we absolutely do a thorough construct. And I have a little bit of a funny story that you’re Listen,

[00:40:45.19] spk_5:
um, you

[00:41:15.73] spk_0:
may enjoy it just kind of quickly here, and it goes back a long time ago when I did my first start believing not 30 years ago, and I was recruiting someone to head up a healthcare foundation and came down to two people, and it was, ah, man, a woman. And remember, the man had sort of Maur experience, But the young woman had seemed like much more potential anyway, for some reason, that the man had given me a list of 10 references. Don’t ask me why, but he gave me 10 references, and I call it the 46 References. This man kind of walked on water. He was, you know, could have been their spiritual guru.

[00:41:22.76] spk_5:
But the time I got the

[00:41:23.74] spk_0:
78 I really got a sense that people were not that comfortable. Then by the time I got denying, 10 people were asking me, you know, why did you What did this guy even give me a reference?

[00:41:36.38] spk_5:
The moral stories you want to keep,

[00:42:12.63] spk_0:
you know, kind of dig in here, and it’s certainly you have a light as a as an organization, and you have a right as a search committee to, you know, find out what you know about people, which is what we d’oh and same time protecting a confidential alley. But certainly we need to do a thorough research on them. And then, in addition to references, we obviously do a check on, um, educational credentials. And then we advise our clients baseball what state they’re in about what they can do and not do regarding the one pursue feeling criminal background check, will and credit credit risk of credit reports.

[00:42:58.13] spk_3:
It sounds like that guy on his word document that he gave you with the list of was 30 years ago. We didn’t have words we have. We have word. We’re gonna be using that word perfect. Where you had to write down at the bottom, you have to change the bold face down at the bottom of page. Anyway, it sounds like he conflated his do not use list with his reference list that he did want to use, like, the last four. We’re We’re on a separate list and he somehow put the two of them together. All right, we gotta take a break. I missed our last break. You ever wonder why some nonprofits 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 to do that. They themselves are former journalists. They specialize

[00:43:04.45] spk_4:
in helping nonprofits build meaningful media relationships that lead to great coverage. They’re a

[00:43:45.38] spk_3:
turn hyphen to dot ceo. Let’s add a little more live love. We got someone jumped in from New York, New York. Welcome. Welcome. New New York New York listener Also. Bangkok, Thailand. I’ve been there and that’s a beautiful city. Beautiful, rich history and, uh, Tijuana, Mexico. Wegner Star Days, Tijuana. Let’s go back. We’ve got butt loads. More time, as we always do for recruiting your next CEO. Now back to Dennis Miller and his book, a guy to recruiting your next CEO. Let’s continue our joint. Ah, Ajanta Dennis. Okay, so we’ve checked references, references, and this and that we’re bringing some people in were like site tours And what? They’re meeting some of the staff now, too. And maybe even some of some of the people who are getting our service is,

[00:44:01.29] spk_0:
uh, no, what? We worked a

[00:44:02.76] spk_5:
man that don’t do that made staff

[00:44:05.36] spk_0:
until they are having a pleasant

[00:44:08.26] spk_5:
way.

[00:44:29.60] spk_0:
In actuality, you don’t You don’t really want the staff on my opinion on a CEO level. Uh, they have to pick the CEO. If it’s another level. Certainly, if it’s a chief operating officer of chief financial officer, it’s probably appropriate to have other members of the executive team meet with them, then find out who’s a better fit culture, that line.

[00:44:32.94] spk_5:
But

[00:44:34.11] spk_0:
on a CEO, though, you won’t make it clear that the board is making the decision and I would not have staff involved on interviewing until mating accepted.

[00:44:45.18] spk_3:
So who are they meeting then? In this this day when they’re going to visit the visit? The site.

[00:44:50.16] spk_0:
While so many have gone to the search committee, Obviously, there’s no one else to me except the entire board. So if you’re talking about the CEO

[00:44:58.03] spk_5:
way, our home,

[00:46:29.73] spk_0:
that once a search committee has made a decision, um, before an offer was made, it’s, uh, what the search committee wants to Dio doesn’t really have any authority to itself. You wanna search? Committee should be making a recommendation to the entire board, and in many cases, and I will advise us is have that final CEO Warren. The case where there’s too close candidates committed. Meet the entire board may be on the same day, you know, spend a little time with each one. Um, if if there’s one, that’s clearly, uh, the person that everybody wants. Don’t waste the time of having to to feel you have to bring a 2nd 1 and you given someone hope when when they’re not probably gonna be selected But I have an interesting story, tony, that you listen, May 1. Here. Uh, about a year ago, we did a search for a CEO, and the search committee had him ranked. Wanted to have this. Ah, woman ranked one and a guy number two. And, um, I had agreed with that recommendation. Thought it was the best way of going. And by the time those two candidates came in to meet with the entire board and this is an unusual situation. Ah, the board ended up going with the number two candidate and not the number one candidate. And some things came up in discussions. And I think at the end of day, they made the right decision. So don’t forget, the board has the final hiring authority. They delegate that that a search committee to search committee is here to recommend candidates. But do not hire a CEO from a search committee on Lee. They must meet the entire board.

[00:46:35.38] spk_3:
Have you ever heard of co CEOs?

[00:47:32.68] spk_0:
Yeah, I have. And I I found it never. Well, a couple times, it rarely works there. It works in a case where today there’s a lot of mergers and acquisitions so both people take on the role of co CEO. 1 may have responsibility for maybe a certain geography one than another. Ah, one’s focus more on one thing I before not the have it. I think, uh, co CEOs is like co board chairs. Um, it doesn’t make a feeling that anybody is really in charge. Um, I’m working with an organization right now out in California because we do certainly national searches as well as in Canada. And you know, there’s a transition going on and it’s the heart organization. It’s important to know who’s in charge. So if it has to happen and you’re particularly with a merger, can you have it? Yes, but ideally, it sooner than later, it’s only a position. You can’t have a Coast CEO. It doesn’t work. I’ve seen co chief development offices, and it doesn’t work either. I mean, I think someone has to be in charge. So that’s my opinion.

[00:48:18.83] spk_3:
Okay, way explored co CEOs with Jean Takagi. So if anyone wants Thio, get more on that. That was the May 19th 2017 show with Gene. Um, Okay. Um all right, we, uh it’s time to negotiate an offer we were, uh we’ve selected our top one. Um, you like guards? Guidestar. They have? I don’t know if you mentioned I know them. Guide star has a good salary guide. Comes out every year. S Oh, it’s it’s current. Um, but do you have other studies that you like?

[00:48:21.17] spk_0:
Yeah, a couple of things here. We have a good sense of what the marketplaces like. Different geography, maybe

[00:48:26.80] spk_5:
waken

[00:48:46.47] spk_0:
use guide star and I. I like your condition well, but here’s the palm and it’s not Guide says bomb. Is that usually the data that’s in there where you have the five highest compensated employees? It’s probably two years old. Um, even if it says 2016 and you’re in 17 it may have been, you know, we were involved in June of 2015 so I don’t rely upon that Nestle as a guide for

[00:48:53.31] spk_5:
making offer. I

[00:49:23.71] spk_0:
know what the organization, um, is looking to pay. I know what What? The Sally is people that are looking, and then we I advise because I’m involved in every single. So I advise my client is what I think it’s gonna take to get the person I’ve seen clients do salary surveys using Geiser and other things that commit some other compensations. Raise. There’s nothing wrong with it, but what you don’t get from that. You don’t know what the performance of the organization has been. You don’t know how well they’ve done. You don’t know what how well they’ve done with fund raising.

[00:49:30.20] spk_5:
You

[00:49:39.63] spk_0:
know, you don’t know much about him other than what the total budget is. So one of the advantages of doing what? What the rate is to attract some money, and that’s kind of what we do.

[00:49:43.61] spk_3:
Okay, let’s spend our last couple minutes. Ah, you just gotta buy the book because there’s a lot more about negotiating the offer in the book. But I wanna spend last couple minutes just about two minutes or so on on on boarding. This is a board responsive board responsibility.

[00:50:09.19] spk_0:
Well, that’s a big thing. I mean, you know, if you talk to CEOs, I mean, half of them have never been on border. So what? What do you mean by sort of on board a candidate? Well, are on boarding. I’m boarding. If you don’t get on board, you get hired, and then you start, and then you go, Jeez, I don’t know. This is the way. Itwas

[00:50:15.06] spk_3:
you know, you’re not supported in your new digital, John. So

[00:50:25.65] spk_0:
I know what you on boarding refers to. The idea of preparing a CEO to adjust to the new social, cultural and professional components

[00:50:26.92] spk_5:
of the new

[00:51:14.06] spk_0:
role and or to the board here really, very important that be some type of on boarding process. So, as an example here, here’s some things you would want to be thinking about with on boarding. Here is, um let’s be clear. So both the board and the CEO and again, you could say the same thing about a CEO or CFO. What? She’s development officer. Same thing here is what are the expectations of each other? Clearly, that’s gonna come up. Don’t interview puzzle, but that needs to be known. How often does the board chair I want to communicate to the CEO? Did they want to meet monthly? Did they want have a phone conversation on every other Friday? Did they want e mails or not e mails that they want to meet for breakfast? Um, what does the board want the CEO to accomplish in the 1st 30 days or 60 days, or maybe 180

[00:51:21.37] spk_5:
days.

[00:51:27.63] spk_0:
What the cultural issues or financial issues that the organization is facing. What senior members of the team may have some performances. The watch out for who were the key stakeholders outside the organization, like donors of volunteers that you want the seal to make sure that building wishes perhaps, maybe with a local Congress person or a member of the Senate Assembly here.

[00:51:46.27] spk_3:
Dennis Dennis. We gotta leave it there. There’s too much.

[00:51:49.16] spk_5:
All right. Thank

[00:52:08.43] spk_3:
you so much, Dennis. Same for you. Get the book. It is a guy to recruiting your next CEO. You’ll find it at Dennis c. Miller dot com, and you’ll find him at Dennis C. Miller next week. We don’t have any show, so I’m wishing you happy. Turkey Day. Help you enjoy your Thanksgiving. I hope it’s time away from work, including email and text.

[00:52:19.61] spk_4:
If texting is part of your work,

[00:53:03.64] spk_3:
um, and time with family, family and maybe even dear friends. I hope you enjoy your Thanksgiving. We’ll be back on December 6th with Vivian Hexter on Big Impact. 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 But Cougar Mountain 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 your non profit. Your story is their mission. Turn hyphen to dot CEO creative producers

[00:53:44.00] spk_2:
Clad Meyerhoff. Sam Leave, which is the lying producer thief shows social Media is by Susan Chavez. Mark Silverman is our Web guy, and this music is by Scott Stein Knew every next week for non profit radio. Big non profit ideas for the other 95% will actually be with me in two weeks for big non profit ideas for the other 95% Go out and be great talking alternative radio 24 hours a day.