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.

Florida United Way Sees Increase In Charitable Giving

Charitable giving seems to be on the rise, led by a significant increase for a United Way affiliate in Florida.

The Orlando Sentinel reported Wednesday that Heart of Florida United Way -- which covers Orange, Osceola, and Seminole Counties -- raised $19.4 million dollars through a fundraising campaign for the past year. That number is nearly $2 million more than the year before and also represents the highest total since the 9/11 terrorist attacks. The money raised was $1.6 million more than the organization's goal.

These numbers would seem to indicate that charitable giving is on the rise after the low points of the Great Recession. Indeed, a recent report by Charleston, S.C.-based software firm Blackbaud indicated that charitable giving increased more than 3 percent for the three months ending January 2012.

Another positive sign is that, as The Sentinel reported, charities in the Orlando area have launched capital campaigns in the last year to construct new facilities or expand programs. A study by the Community Foundation of Central Florida (CFCF) showed that of the 600 central Florida nonprofits tracked, 136 were involved in a capital campaign in 2011, and 86 percent were on target to bring in a collective $561 million through those campaigns.

About 400 companies participated in Heart of Florida United Way's fundraising campaign, which targets employees to donate through regular paycheck deductions and asks executives and corporate foundations to give at least $1,000.

How is the fundraising in your area? Have you seen similar results as United Way?

You can read the full article in The Orlando Sentinel.

North Carolina Investigating State Official's Ties To Nonprofit

Governor Bev Perdue's (D-NC) administration is investigating a top state official's ties to a nonprofit after it was alleged that he didn't reveal that connection in an ethics disclosure form.

Henry McKoy Jr., the assistant secretary for community development, helped with an initiative that would get Raleigh, N.C.-based North Carolina Sustainability Center (NCSC) a $2 million federal grant, according to a report in The Times News. McKoy had served as an unpaid leader of the organization before his appointment by Perdue in August 2010. These ties were allegedly not reported in his 2011 and 2012 ethic disclosure forms, an allegation that was first bought up in a report Wednesday by Carolina Journal Online, a news website with ties to the conservative John Locke Foundation.

A Perdue administration spokesperson responded by saying it is investigating the report, but was quick to point out that the initiative that McKoy was involved with had not yet been approved and that no money had been distributed to NCSC.

McKoy denied the allegations by the Carolina Journal, telling The Times News that the story is being "distorted." He said that Commerce Secretary Keith Crisco asked him to resign after the report first came out, but he refused to do so. Crisco and many other administration officials were involved with NCSC, which was essentially a creation of the Commerce Department.

McKoy said that he and Crisco both resigned from the board of the nonprofit in August after new directors were appointed.

You can read the full story in The Times News Online.

Bruce Willis To Donate Ski Resort To Nonprofit?

Actor Bruce Willis has indicated that he is willing to donate his central Idaho ski resort to a nonprofit, in what would be a major gift.

According to a report in Bloomberg Business Week, the Die Hard star had already put his home in Hailey, Idaho on the market along with his nightclub, The Mint; those properties are listed at $15 million and $4 million respectively. Now, according to a story first published in The Idaho Mountain Express, he is now offering his Soldier Mountain ski resort to the right nonprofit.

Willis has owned the resort since the 1990s and at least one organization, the Soldier Mountain Recreation Association, has expressed interest in obtaining the resort. John Palan, a long-time employee at the organization, told The Idaho Mountain Express that the resort has been operating at a loss for several years, but they would have interest in it if they can find enough sponsors and get new members.

Ted Beeler, president of the ski resort planning and design firm SE Group, told the paper that there are 30 nonprofit ski areas operating in the United States. He said that transferring Soldier Mountain to a nonprofit would open up the resort to tax-deductible donations which would allow it to continue to stay afloat.

You can read the full story in Bloomberg Business Week.

For Nonprofits, Demand Is Up While Cash Is Low

A new survey revealed that the demand for nonprofit services is very high, but that many of these organizations simply don't have enough cash on hand to meet the needs of the people.

More than 4,500 nonprofits gave responses to the State of the Nonprofit Survey, as reported by The Huffington Post. The survey indicated that while nonprofits expect to see an 88 percent increase in demand for services in 2012, 57 percent only have enough cash on hand for three months or less.

While there are a number of reasons for this, the main issue is a decrease in government funding. The economic troubles the country endured has lead to cuts at the state and federal level, which have often targeted nonprofit funding.

The Huffington Post reported that one nonprofit that is experiencing these troubles is Worcester, Mass.-based Abby's House, which provides shelter and other support to homeless women and children. The length  of stay has increased from 11 nights to 33 in the past year, and the charity has been scrambling to come up with solutions to house the individuals that need shelter.

You can read the full story in The Huffington Post. If you want even more reading on this topic, check out our recently published column about how much cash nonprofits should keep in reserve.

NPT At NTC12

This post will be updated throughout the day


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The NonProfit Times is attending the Nonprofit Technology Network's (NTEN) annual conference, NTC. The event is being held in beautiful San Francisco, California this year, and our senior editor, Mark Hrywna, is tweeting about the latest happenings at the show:

18k pieces of content on @EnvDefenseFund website when redesigned. "Not just pile of clutter, wrong clutter" - @kiramarch #12ntcredesign
— Mark Hrywna (@mhrywna) April 3, 2012

Was v program related, wonky blog posts, nothing to convince ppl to give. Needed human, bit-sized pieces of info -@kiramarch #12ntcredesign
— Mark Hrywna (@mhrywna) April 3, 2012

User personas help set goals for website's site navigation, what info has hierarchy 'above the fold' - @farra #12ntcredesign
— Mark Hrywna (@mhrywna) April 3, 2012

Time to rethink ur website? Try this flowchart from @bigduck's @farra --> ow.ly/a3B3J #12ntcredesign
— Mark Hrywna (@mhrywna) April 3, 2012

Avg cost to acq #FB like = $3.5; Twitter follower = $2.05, accding to 4th annual #Nonprofit Social Network Benchmark Report #12ntc
— Mark Hrywna (@mhrywna) April 3, 2012

Most of us don’t need completely diff website for smartphone yet; might be depending on audience, goals -@farra #12ntcredesign
— Mark Hrywna (@mhrywna) April 3, 2012

87% of all US adults have cell phone, 66% 18-29 yos have smartphone (fr Pew research) #12ntcmobileprograms

— Mark Hrywna (@mhrywna) April 3, 2012

Featured Job: Manager Of Individual Giving

NPT Jobs has a new opportunity for job seekers looking to play a leadership role in concept and annual fund development. Intrigued? Then read on for more details.

Geneva, Ill.-based Marklund, a nonprofit serving the healthcare needs of disabled Americans, is seeking a Manager of Individual Giving. The chosen candidate should be prepared to work in a fast-paced environment where he/she will oversee all aspects of direct mail fundraising and appeals. Using various mediums including mailings and e-blasts, the Manager will seek to expand the lower-level annual giving program (gifts up to $5,000).

Reporting to Marklund's Chief Development Officer, other responsibilities of this position include:

• Identify, cultivate, and solicit current and prospective donors.
• Thank and recognize donors.
• Enlarge the donor base in terms of number of donors and dollars raised.

Think you have what it takes for this job? Make sure you meet the following requirements before applying:

• Bachelor's Degree in nonprofit management, marketing, business management, communications, or another related field.
• At least six years of progressively responsible experience in annual fund and donor engagement in the nonprofit sector.
• Ability to manage multiple projects and work independently, with a strong attention to detail.
• Excellent written and verbal communication skills.
• Strong proficiency with donor database function and navigation.
• Familiarity with Microsoft Office programs, including Microsoft Word and Excel.
• Experience working with direct mail and e-mail vendors and printers.

Read more about this job, including more requirements, on our website. If you think you would be a good fit, don't hesitate to apply!

The NonProfit TImes' 25th Anniversary Issue

The first full week of the month always means a new issue of The NonProfit Times, but this one is a little different. Yes, this year's April 1 edition of NPT is our 25th Anniversary issue. We are celebrating 25 years of delivering high quality nonprofit news with a special commemorative article looking back at the past years, both the highs and the lows. 

Oh, and we also have the Top 50 Best Nonprofits To Work For in this issue. So you could say this is a pretty packed issue.

Articles:

• NPT Celebrates 25 Years: As NPT embarks on its 26th year of publishing, we take a look back at  some of the biggest stories we've covered.
• 50 Best Nonprofits To Work For In 2012: What nonprofits were the best to work for this year? NPT conducts it's annual study of the best nonprofits, led for the second consecutive year by the Wounded Warrior Project.
• Credit Card Scams Targeting College Online Donations: From California to Pennsylvania, from Wisconsin to Washington, colleges around the country were getting large online donations that turned out to be nothing more than credit card scams.

Columns:

• Failing Grade: Is the nonprofit sector focused on education's real future?
• Just Like Kindergarten: Learning to share donor information is beneficial.

Tea Party Group Ruled A PAC, Not Nonprofit

A Texas judge ruled that a Tea Party group is not a nonprofit as it claims but an unregistered political action committee (PAC).

Judge John Dietz of the Travis County District Court made his ruling based on a lawsuit the Texas Democratic Party filed against the King Street Patriots in 2010, according The Houston Chronicle. The suit alleged the organization made illegal contributions to the Republican Party and trained poll-watchers in cooperation with GOP candidates.

All of these actions would violate laws governing nonprofit political groups, which is what the King Street Patriots claimed they were. The organization was founded in 2009 with one of its main issues being voter fraud. The group reviewed public information of voter registration during the 2010 elections, and reported those findings to the county registrar. They also trained hundreds of poll watchers to look for potential fraud.

The ruling would force the King Street Patriots to reveal its list of funders. They would, however, be allowed to participate in partisan activities. The Liberty Institute, a nonprofit legal firm based in Plano, Tex. that represents the King Street Patriots, says they plan to appeal the Judge's ruling.

The NonProfit Times recently published a story on how the IRS is monitoring political groups like the King Street Patriots to see if they are adhering to rules governing nonprofits.

You can read the full story in The Houston Chronicle.

Nonprofit Director Sentenced In Child Porn Case

The founder and former director of a San Francisco, Calif.-based nonprofit was sentenced to six years in prison for possession of child porn. He will begin serving his sentence on May 8.

Anthony Josef Morris, who was the head of Kids Serve Youth Murals, was also ordered to pay $6,500 in restitution by U.S. District Judge Richard Seeborg, according to Mill Valley Patch. That money will be distributed among the victims identified in Norris's collection. He pleaded guilty in November to one count of possession of child pornography.

U.S. Attorney Melinda Haag said that during his plea, Norris admitted to possessing more than 600 images on his computer of kids engaging in sexual acts with adults. These included horrific images of children being subjected to sexual assault. Norris was arrested in June of last year, in a story that was reported by NPTtv, after FBI agents discovered he had posted some of his images online. Those postings were then traced back to Norris's home computer.

Even more disturbing, San Francisco United School District officials said they found other offensive images hidden in tiles in at least three of the murals his organization created for schools and other sites across the city. Those images were quickly removed by the school district.

You can read the full story in Mill Valley Patch.

Blackbaud Interview With Paul Clolery

Found this video on YouTube. It's an interview with our editor-in-chief, Paul Clolery, at the 2009 Blackbaud Conference on Nonprofits. Enjoy!

Planning For Planned Giving

When Baby Boomers start to age, they start thinking about their legacy. And when Baby Boomers start thinking about their legacy, they start thinking about planned giving.

Planning for planned giving is a very sensitive task for donors. What they leave behind for others is a big decision that shouldn't be taken likely. A nonprofit might be anxious to know if they are receiving a bequest ahead of time but, according to representatives from The Stelter Company, that isn't always the case.

The representatives shared their findings on this subject at a recent Association for Healthcare Philanthropy (AHP) international conference. The results of their study showed that a whopping 53 percent of those polled said they prefer that an organization find out about a bequest when the time comes. Another 5 percent said they intend to notify the organization at some point.

A bequest is a very personal decision and donors don't necessarily want their decisions to be private until the time comes. Stelter urged nonprofits to respect the privacy of donors and to assure them they have a right to change their minds. They also listed the reasons why donors choose not to notify nonprofits ahead of time:

• It’s the donor’s own business, and no one else needs to know: 80 percent.
• The donor might have a change of heart, so it’s better not to say anything: 34 percent.
• Worries about being pestered with mailings and phone calls if the nonprofit knew about the bequest: 26 percent.
• A sense of the nonprofit looming like a vulture waiting for the money: 26 percent.
• A fear of getting special treatment, which would make the donor feel uncomfortable: 24 percent.
• Fear the organization would sell/give the information to other nonprofits that would also approach the donor: 19 percent.

Bequest giving is a big source of revenue for nonprofits, which makes it even more important that nonprofits respect the wishes of these donors. Failing to do so will likely result in the loss of the bequest and bad publicity.

An Increase In The Need For Nonprofit Services?

The NonProfit Times reported today that, according to the Internal Revenue Service (IRS), the amount of nonprofits in the U.S. decreased by 18 percent last year. As you probably know very well, a lot of people rely on nonprofits for affordable services, especially in this tough economy.

This news made us wonder whether nonprofits have noticed an increase in demand for their services during the past year. We went to Twitter to find out, and were given the following responses from our followers:

@NonProfitTimes As the economy worsens, the need for services increases. We have been fortunate through these hard times. Hope it continues
— Ctr for Child&Family (@centerforchild) March 27, 2012

@NonProfitTimes Our ToolBanks are seeing their user-ship rise as NPOs use a ToolBank to make more efficient use of service project budgets.
— ToolBank USA (@ToolBankUSA) March 27, 2012

What are your thoughts on this issue? Tweet at us @nonprofittimes or respond in the comments section below. We will update this post with new tweets from our followers.

Exempt Magazine: Winter 2012 Issue

One of the perks of the new Exempt web site is the ability to check out past and current editions of the magazine. This includes the Winter 2012 issue, which came out last month.

If you are new to Exempt, you should note that the magazine focuses exclusively on issues related to the financial side of the nonprofit sector. This is different from The NonProfit Times, which writes mostly about management and fundraising issues.

This attention to finance is shown very well in the Winter 2012 issue. Let's take a look at what's inside:

Articles

• Of Pay And Perks: A look at some of the salary and benefits practices at some nonprofits, including the United Way of Rock River Valley. This article is based on NPT's 2011 Salary and Benefits Report.
• Return On Investment: Looking to invest in public companies that service nonprofits? This article takes a look at some of the organizations that did well in 2011.
• Prospect Wealth: When the $200 million Reed College Centen­nial Campaign began five years ago, the school turned to donor prospect research to help identify alumni and college friends who might be able to make a major gift.
• In The Crosshairs: The New York Attorney General (NYAG) recently crossed into what some consider the hallowed ground of charities, by launching an investigation into cause-related marketing of “pink ribbon” charities.

Column:

• Accounting Software: Why is accounting software so important? Find out in this column by Tim Mills-Groninger, a consultant to the federal department of Homeland Security Science and Technology Directorate.