What Can Nonprofit Board Members Be Paid?

The recent case of Greg Mortenson and the Central Asia Institute has led some to wonder whether being a nonprofit board member and a salaried employee are mutually exclusive.

According to Maryam K. Ansari, Esq. of FindLaw.com the answer is no -- with some qualifications.

In an article featured in Reuters, Ansari wrote that it is perfectly within the law of tax exempt organizations for board members to have salaries, as long as the pay is "reasonable." What defines reasonable? This is defined by law. The Internal Revenue Service (IRS) has intermediate sanctions rules that require checking salaries at like organizations to ensure there isn't private gain.

Ansari also wrote about another factor in the pay of board members: A conflict of interest and compensation policy. These are put into place to prevent the individual from deriving any extra benefits from the nonprofit. Standard conflict of interest policies usually state that when the board votes on the pay for a member, that individual must leave the room during the process.

A compensation policy will lay out how the salary for that employee is to be determined. Things that will be considered are the duties of the position and the average salary paid for the job. All of these procedures must be documented to ensure that the decision was impartial.

Nonprofit board pay can be a very sticky subject, so it's important to follow the best practices that Ansari laid out. To read her full article, head on over to the Reuters website.

UK Prime Minister's Office: Wealthy Abuse Charitable Deduction

Some wealthy people in Britain are making donations to charities that don't do a lot of charitable work in an effort to increase their charitable deduction, according to a report from the Prime Minister's office.

BBC News' report on this story came after Chancellor George Osborne announced a budget that placed a cap on tax relief from charitable donations. You might recall similar controversy in the U.S. from President Barack Obama's continuing desire to also cap charitable deduction. Osborne's Budget announced that starting in April 2013, the maximum amount that can be claimed from tax relief is £50,000 or 25 percent of the individual's income, depending on which is greater.

In an interview with the British paper The Daily Telegraph, Osborne said he was "shocked" by what he saw as a large scale attempt by the rich to avoid taxes through charitable donations. That interview, and the chancellor's budget, was criticized by leading philanthropists and charitable organizations. John Low, chief executive of the Charities Aid Foundation, told BBC News that the Chancellor is wrong to equate tax relief on major donations as tax avoidance. He went on to say that a blanket cap on deduction will cost charities millions by making it more difficult for donors to make major donations.

A spokesman for the Prime Minister's office defended the cap, saying it was necessary to prevent abuse by some wealthy citizens.

You can read the full story on BBC News' website.

Free Webinar: Secrets of Nonprofit Financial Reporting in the Cloud

Our last webinar with Intacct dealt with moving your nonprofit financials to the cloud. In just a couple of weeks, this important topic will be in the spotlight once again.

On April 19 at 2:00 PM EST, The NonProfit Times and Intacct will host a free webinar entitled "Secrets of Nonprofit Financial Reporting." Managing your nonprofit finances is complicated. You have a diverse set of stakeholders that need powerful reporting. You need to manage and track different funding sources and you need to ensure your financial results are impeccable, especially in today's unstable financial climate.

Buu-Linh Tran, RAFFA, CPA and Manager, and Gordon Quick, Product Marketing Leader at Intacct, will be lending their expertise in this hour long event. They will be advising attendees on the following issues:

• How to meet the most common nonprofit reporting requirements and challenges.
• How cloud computing delivers real advantages for nonprofit finance.
• How to best set up your chart of accounts to fit your nonprofits' requirements.
• How to use cloud computing to organize, analyze, and communicate your financial results.

Interested in attending? Register today to learn all about these issues and more!

Housing Nonprofit Files Complaint Against Wells Fargo

A Washington, D.C.-based nonprofit filed a complaint against Wells Fargo with the U.S. Department of Housing and Urban Development (HUD).

According to a report from Reuters, the National Fair Housing Alliance (NHFA) accused the bank of failing to maintain foreclosed homes in minority neighborhoods. The nonprofit claimed that, when compared to houses in white areas, the foreclosed homes suffered from a lack of regular maintenance.

The complaint comes after NHFA completed years of investigations of Wells Fargo-owned properties in eight cities, including Atlanta, Baltimore, Dallas, and Miami. The complaint cites statistics to allege that the properties in white neighborhoods received much better care. For instance, NHFA reported that 56 percent of the foreclosed buildings surveyed in minority communities had significant trash build-up, compared with 30 percent in white areas.

A Wells Fargo spokesperson, Tom Goyda, responded to the complaint by saying that the bank conducts all lending activities in a consistent manner with no regard to race. He went on to say that, because the complaint does not cite specific properties, Wells Fargo cannot investigate the allegations in the areas NHFA lists.

You can read the full story in Reuters.

Outgoing Nonprofit Chairman Calls For Executive Director's Resignation

The outgoing chairman of a Charlestown, Mass.-based nonprofit is calling for the resignation of the organization's executive director.

The Boston Herald reported today that the Rev. Daniel Mahoney resigned from Life Focus Center last week in the wake of a state auditor blasting the nonprofit for allegedly spending $100,000 in taxpayer funds on outside expenses during a Disney World vacation.

In the letter announcing his resignation, Mahoney said he only heard of the charges when a reporter from The Boston Herald sought to interview him about the state auditor's report. Writing that he was embarrassed by the report, he urged Executive Director Jack Millerick, who is accused of charging $130,000 on the nonprofit's credit card in fiscal years 2009 and 2010, to step down. Mahoney wrote that he has lost all "confidence and trust" in Millerick as a leader. He also wrote that the nonprofit still hadn't fully addressed the concerns in the state auditor's report.

A Life Focus Center spokesperson told The Herald that Millerick has no plans to step down.

You can read the full story in The Boston Herald.

Choosing Your Direct Mail Font

All of the talk these days is about high tech communication. Whether it's e-mail or texting, there's very little mention of direct mail when we talk about communicating with supporters. But don't bring out the shovel yet; direct mail isn't dead.

In a story in the February 1, 2012 edition of The NonProfit Times, Kory Christianson, executive director of St. Joseph's Indian School, talked about his organization's use of direct mail. For example, they send a letter with an e-mail follow-up confirming they received it. This is one of the many ways a nonprofit can continue to make use of direct mail.

Appearance is everything when it comes to sending out letters. This all starts with choosing the right font when composing your message. It's all well and good to use the default font in your word processor (usually Times New Roman), but that can be a little bland. It's worth experimenting to see if there are other fonts that can jazz up your message without making it look over the top.

In his book "Direct Mail for Dummies," Richard Goldsmith wrote about four types of fonts that can give your direct mail increased readability:

• Serif Type: These fonts have little tails hanging off the ends of the letters. Serif fonts are easier to read.
• Sans Serif Type: These have no tails and are harder to read in small type. Sans serif fonts are often used for things like headlines.
• Reverse Type: This is white letters in a background color. It’s also more difficult to read depending on size.
• Italic Text: Although good when used to emphasize important words or phrases, italic text is difficult to read when it’s used for long paragraphs.

Goldsmith also urged writers not to mix too many typestyles or sizes. This will make your direct mail message look random and unprofessional. 

Amazon's Philanthropy Nearly Non-Existent In Seattle

Amazon.com, one of the largest and most popular online retailers, was originally conceived in downtown Seattle, Wash. Yet while other organizations born in the Emerald City have been very active in their hometown's philanthropy, Amazon has been noticeably absent.

According to a report in The Seattle Times, the online retail giant has been a minor player in Seattle's philanthropic scene.  The United Way of King County which, as The NonProfit Times reported, received a record $117,390,119 last year. Microsoft made a corporate donation of $4 million in 2011.

The list of Amazon's no-shows for its hometown is quite extensive. The Times reported that many nonprofit officials find it difficult to find someone at the company who will talk to them, and Chief Executive Jeff Bezos didn't attend a January 2011 luncheon meant to honor him as "Executive of the Year." Even more important for the city, Amazon has made no significant donations for Seattle-area causes.

Major companies  are usually found on lists of major donors for local nonprofits, but that's not the case for Amazon. The Seattle Times found no record of Amazon donations to Seattle-based nonprofits like the Seattle Symphony, Washington's Special Olympics, or YMCA of Greater Seattle. Most of its financial support has gone to writers' groups. Since 2009, Amazon has supported 80 writers' groups in the U.S., including 19 in the Seattle area, with grants of about $25,000. It also gave the University of Washington $51,000 over a three-year period.

Bezos has defended his company by saying that its most important contributions come in the form of its core business activities. He also expressed skepticism, in a 2010 interview with PBS' Charlie Rose, that philanthropy was the best way to solve problems. He noted that the Kindle, the company's e-reader, could be seen as a low-cost way to distribute books to the needy.

Yet that is really the extent of Amazon's philanthropic activity in the area. What do you think of this story? Can you think of any reason why Amazon would be reluctant to engage in philanthropy in Seattle? Make sure to read the full story in The Seattle Times.