Skip to main content
Category

Governance

Jul 27

Primer on nonprofit sector buzzwords and jargon

By Feature, Governance, Leadership

By Jodie Shupac, writer, Charity Village

Leveraging funds. Capacity-building. Community-driven action. Enabling populations. Collaboration. Participatory action. Anti-oppression.

Just some examples of a multitude of terms regularly thrown around by professionals in the nonprofit sector, these buzzwords can be reasonably categorized as industry speak, or just plain old jargon.

Nonprofit jargon, like the vernacular of any sector or workplace, can provide a sense of unity and belonging to individuals and organizations working within a particular framework, but language of this sort can also prove imprecise, clichéd or alienating.

So why has certain terminology become so prevalent in the nonprofit sphere, and what impact is it having on both those on the frontlines and the fringes of the sector?

Button Text
Jul 27

Changing language of nonprofits

By Feature, Governance, Leadership

By Louise Lee, reporter, Stanford University Graduate School of Business

Terms like “data” and “framework” are commonly used by science and health organizations. Nonprofits tackling civil and social justice issues refer to “empowerment,” while more business-oriented nonprofits often use the terms “performance” and “impact.”

But new research by Stanford GSB professor Walter W. Powell shows that there is a fourth group that incorporates and recombines the languages of civil society, science, and management, creating a new discourse combining the language and thus the ideas of various kinds of entities.

Button Text
Jul 14

Top five mistakes of boards

By Governance, Sponsor Insight

By Zac Kester, JD, LLM, CFRM, at Charitable Allies |

In the past few months I’ve received many calls regarding badly behaving boards, and have become aware of at least two Indiana Attorney General investigations into nonprofits. That got me thinking about the top mistakes of nonprofit boards.

I am not going to round up the “usual suspects” in this article — many nonprofit leaders already know about fiduciary responsibility and keeping good records. Instead, here are the “sleeper” mistakes — the top five mistakes of boards that, in practice, often create more damage than the obvious oversights and might not be on your radar:

  • Failing to monitor programming effectiveness or make course corrections
  • Not wrestling with tough questions
  • Board-level confidences are not kept
  • One person or a small group runs the show
  • Executives and inactive board members who are not held accountable

Are you on a board characterized by one or more of these mistakes? If so, you may want to think about starting a board meeting by analyzing one these issues and discuss how to be more effective.

Button Text
Jul 02

Focus on mission

By Feature, Governance

By Jane Page-Steiner at JPSNonprofit Strategies |

Don’t let your board get so entangled in day-to-day challenges of your organization that they lose sight of your larger purpose. As your board discusses critical issues, your mission statement can provide perspective and a reminder of your organization’s true purpose. At every board meeting keep your mission statement as a central theme.

Nonprofit leaders can help their boards keep focus on mission by:

  • Reading the mission statement at the start of every meeting
  • Sharing a story of how the organization’s mission impacted someone’s life in the last month
  • Taking 15 minutes at a board meeting to discuss the elements of the mission statement and how it guides your work
  • Asking board members to share how they see the organization living out its mission
  • Discussing how one of your programs reflects and implements your mission

Your mission statement informs your board, constituents and the community of what you do, who you serve and how you provide services. I recommend you regularly review your mission statement and revise it if you have changed direction or if it no longer seems relevant. I can help you create a fun and engaging planning session that reviews, and if needed, revises your mission statement.

Button Text
Jun 30

Good intentions or intentionality: Which describes your board of directors?

By Governance, Leadership, Sponsor Insight

By Steve Sauer, senior manager, BKD |

Most historians agree the form and function of today’s board of directors began around the advent of the 20th century. English authorities decided the ultimate authority in a company was vested in the board of directors, and the nature and extent of its authority was to be enumerated in the articles of association (or incorporation).

So after 100 years of practice, these boards have evolved into exceptional governing bodies presiding over their organizations … right? Not exactly.

According to a January 2015 study conducted by BoardSource, boards of not-for-profit organizations are not as close as they think to achieve the pinnacle of effective governance. On the contrary, the study reveals that, on average, not-for-profit leaders give boards a B- in overall performance. It would appear, then, that in our age of constant political, economic, regulatory and demographic changes, significant improvements are necessary — even vital to the health of the not-for-profit sector as a whole.

BoardSource, a 501(c)(3) organization dedicated to advancing the public good by building exceptional not-for-profit boards and inspiring board service, supports, trains and educates more than 100,000 not-for-profit board leaders from across the country each year.

Button Text
Jun 30

Salaried workers could get overtime pay

By Feature, Governance, Leadership

By Katie Johnston, Boston Globe staff |

Millions of American workers who put in extra hours with no extra pay would soon be eligible for overtime under a plan unveiled Monday night by President Obama. The proposed regulations would more than double the current threshold at which many salaried employees stop getting overtime pay, covering those who make up to $50,440 a year.

That is welcome news for workers like Gassan Marzuq. As the manager of a Dunkin’ Donuts in Kingston, Gassan Marzuq sometimes worked 80 or 90 hours a week — spending most of his days serving coffee, running the cash register, and mopping the floors.

Yet because he was a salaried employee who had been deemed ineligible for overtime, his $825 a week in pay sometimes averaged out to roughly the same hourly rate his workers were paid — a reality for many managers when they work more than 40 hours a week.

The Obama administration’s proposal, revealed in an op-ed by the president on the Huffington Post Monday night and set to be officially announced Tuesday, would extend overtime protections to roughly 5 million workers in 2016.

In 1975, about 62 percent of the salaried workforce were eligible for overtime pay, according to the Economic Policy Institute, a Washington, D.C., think tank that advocates for low-income workers. Today, because of inflation, 8 percent are covered.

Button Text
Jun 30

Views

By Feature, Governance, Leadership

By Zac Kester, executive director, Charitable Allies |

After reviewing the U.S. Department of Labor’s proposed changes, I believe that this would have a significant adverse effect on the budgets and operations of small nonprofits, especially those who currently pay their executive directors (or an equivalent position) and administrative support staff less than the new thresholds.

The Department of Labor fact sheets 17C, 17B and 17A outline the requirements for the exemption that allows employers to NOT pay executive and administrative employees overtime. Among other things, those requirements are that employees make at least $23,660.

Many small nonprofits pay staff on a salary basis and do not pay overtime. With the new standards, which will move this threshold to somewhere between $42,000 and $52,000, any employee who makes below that threshold would be entitled to overtime, regardless if they otherwise met the test and qualified for the exemption. Many nonprofit organizations employ people in this range ($23,660 to $42,000/$52,000).

If this regulation is adopted, nonprofit managers and boards will have to be careful to monitor their employees’ time and pay them overtime wages to which they will be entitled.

Button Text
Jun 23

DIY: Make a bylaws cheat sheet

By Feature, Governance

By Jan Masaoka, director and editor-in-chief, Blue Avocado |

“What does it say in the bylaws?”

“Does anyone have a copy of the by-laws?”

“I know I got one when I started on the board but . . . ”

Here’s a new idea: a bylaws cheat sheet. Even if there is a copy of the by-laws handy, it’s tedious to have to look over all the legalese when you want an answer to a simple question. So a nice 30-minute Do It Yourself (DIY) project is to create one.

Button Text
Jun 09

Proposed changes to nonprofit financial reporting

By Finance, Governance, Sponsor Insight

By Chris Mennel, audit manager, Alerding CPA Group | 

A new proposed accounting standard could dramatically impact the current financial reporting methods for the more than 1.5 million nonprofits in the United States. Financial reporting in nonprofits was largely affected in 1993 by the issuance of Financial Accounting Standard No. 116 and Standard No. 117 – two standards that accountants and bookkeepers have come to know very well.

These standards created the three classes of net assets that are used today (unrestricted, temporarily restricted and permanently restricted) as well as many other financial statement components that small to large nonprofit organizations deal with on a regular basis.

Although these changes have been in place for over 20 years, many non-accountant board members and others continue to struggle with the concepts behind nonprofit financial statements. In an effort to improve the usability of these documents, the newly proposed accounting standard would:

  • Create two classes of net assets (unrestricted and restricted) instead of the current three;
  • Require the Statement of Cash Flows to be prepared under the direct method of cash flows instead of the indirect method;
  • Require all nonprofits to report expenses by nature and function. Currently, only voluntary health and welfare organizations are required to present a statement of functional expenses;
  • Require certain reclassifications within the Statement of Activities in order to present new operating measures; and
  • Provide additional changes to the current presentation of financial statements.
Button Text
Jun 02

Nonprofits need knowledge of law

By Governance, Sponsor Insight

By Rebecca Trimpe, writer and editor, Office of External Affairs and Alumni Relations at Indiana University Robert H. McKinney School of Law |

The Indiana University Robert H. McKinney School of Law educates most of the state’s lawyers, and many of our alumni are in positions of leadership in the public and private sectors throughout Indiana and across the nation. McKinney alumni hold leadership positions in a variety of nonprofit organizations, including the Center for Leadership Development, USA Funds, Lilly Endowment, Inc., the NAACP, the Central Indiana Community Foundation and Outrun the Sun.

It makes sense that lawyers are in leadership positions in these organizations, according to IU McKinney Professor Robert Katz.

“The legal system informs almost every aspect of the nonprofit sector,” Katz said. He serves as the school’s expert on nonprofit organization law.

“It defines what it means to be a nonprofit organization, sets their parameters and restricts how they engage with for-profit entities, spells out their governance structures, prescribes how its officials must behave, lays out what they must do to obtain and retain tax exemption and other legal advantages and how these various requirements are implemented and enforced.”

According to Katz, IU McKinney’s Master of Jurisprudence degree could provide those who work in the nonprofit sector with a deeper understanding of how the legal system operates, how to ascertain what the law expects them to do, what they must do to stay on the safe side of the law, recognize when they ought to seek legal guidance and converse more fluently with lawyers.

As the law surrounding nonprofits changes, and the way nonprofits conduct their work evolves, knowledge of the law becomes critical for staff and board members alike.

“Nonprofit and tax-exempt law is constantly developing as a result of new legal requirements by legislatures and agencies, rising expectations of the public, and increased scrutiny from state attorneys general, elected officials, and the media,” Katz said. “In recent years, for example, the Internal Revenue Service has revamped the annual report forms that nonprofits must submit to retain tax exempt status and issued new rules restricting the commercial and political activities of nonprofits and the ability of a nonprofit’s insiders to benefit from its operations.”

Those interested in learning more about the M.J. program, and how it can be tailored to fit individual needs, may contact IU McKinney directly.

rebecca-trimpeRebecca Trimpe is the writer and editor of the Office of External Affairs and Alumni Relations at Indiana University Robert H. McKinney School of Law.  She has 26 years of experience as a professional writer.

IU McKinney is located on the Indiana University Purdue University Indianapolis campus. The law school is named for Robert H. McKinney, a distinguished lawyer, businessman and civic leader who received his law degree from IU in 1952. A founding partner at Bose McKinney & Evans LLP, McKinney also served as chairman and CEO of First Indiana Corporation, parent company of First Indiana Bank (now BMO Harris Bank), until his retirement in 2005.