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Nonprofit Leadership and Politics

March 24, 2017 by Spokes For Nonprofits

unity-1767663_1920At Spokes, we are having daily conversations with our nonprofit members about the political discourse that is permeating our professional and social interactions. Here’s what we’re learning:

  • Some nonprofits are struggling to properly care for their clients because they are using multiple or different names when seeking services. These clients are too afraid to use their real names and expose themselves to potential raids for suspected illegal immigrants – even clients who are in the United States legally.
  • Nonprofit leaders are feeling a need to create continuity plans (or disaster plans) out of a fear that their organizations may be targeted for an attack (arson, vandalism, or bullying) because they address issues that have become politically charged.
  • Nonprofits that exist to support women’s issues chose not to participate in International Women’s Day celebrations because doing so may align the organization with one political party and alienate donors and volunteers from the opposing political party.
  • Some volunteers and board members who want to support the nonprofits that address the issues that concern most are being turned away because their reputations/identities are deemed “too political.”
  • Large professional associations continually send nonprofit leaders surveys and articles asking us to identify how the new presidential administration is impeding our work and rallying us to “fight” against the administration to defend our causes.

Those who share these stories have asked us for help and guidance. We’ve identified 4 specific tips and want to share them with you, too:

First, re-frame the conversation. Our organizations face the very real threat of program interruptions from fires, earthquakes, dramatic federal budget cuts, economic recessions, political agendas, or poor assumptions about our organizational purpose every single day. We must always be diligent in our stewardship of our organizations – whether in defining a continuity plan or an advocacy policy. If we’ve been remiss in these management areas, the fault is our own and not the fault of a particular president or political party. Let’s not allow ourselves to become “victims” of the current political environment. Rather, let’s allow this turbulent time to motivate and re-engage us in our long-term planning and risk management responsibilities so that we can shore up our organizations to better weather the storms that will inevitably come to us from many different sources and directions. And, most importantly, let’s commit to maintaining our vigilance as we move forward.

Second, remember that all 501(c)3 organizations are legally required to remain non-partisan at all times. Charitable organizations are a “partisanship-free” zone. If a volunteer, board member, or donor wants to participate in our work to help us fulfill our missions, we owe it to the constituents we serve to allow them to do so. For whom an individual votes or which campaign sign may be in his/her front yard is a non-issue. If you’re worried that folks may try to align with your organization with an ulterior motive, you can protect your organization by establishing and consistently applying carefully defined policies and procedures around board member vetting, expectations for board member performance, gift acceptance policies, and donor recognition policies, to name a few. We must apply the same nondiscrimination practices we use for hiring our employees or serving our clients with our volunteers and donors. We need everyone’s participation in the nonprofit sector if we want our communities to be healthier and more vibrant. We have a moral obligation to invite participation and not build barriers to impede it.

Third, don’t make decisions out of fear. Rather, make decisions based on what your organization believes to be true as defined by your mission statement. Borrowing from the example above, if a nonprofit was founded on the belief that woman are entitled to equal rights and protections, then it must participate or promote International Women’s Day or participate in a local march. Not participating out of the fear that a donor may incorrectly view your participation as partisan and become disgruntled is unreasonable and unfair to your clients and that donor. If an activity is strongly aligned with your mission, it is worth doing. Allow your mission to be your guide and organizational conscious, not your fears. Not everyone will support your mission, and that’s OK. Those donors who do support your mission will respect what you do in service to it, even when those activities may be politicized by the media or others. Schedule some time at your next board and staff meetings to review your mission and values statements so that all members of your organization are empowered to communicate and demonstrate them effectively.

Lastly, let’s choose not to respond to perceived attacks on our work defensively. Taking a stance of “fighting back” only increases the amount of fighting that is occurring all around us. Instead, let’s work harder at communicating (listening, specifically) for greater understanding and agreement. We need to ask more questions to identify common ground rather than declaring to defend our territories. After all, a hunting enthusiast and a vegan can both support wildlife habitat conservation. A gun manufacturer and a pacifist can both agree on the need to support our veterans. And, a fast food restaurant owner and nutritionist can join forces to build more playgrounds to help children be more physically active. Let’s find our common denominators, join forces to realize our shared goals, and serve as a model for the rest of our national, state and local communities.

If you need a template for an advocacy policy, board contract or other policies, or if you would like consulting help to implement any of these strategies, please call Spokes at 805-547-2244 or [email protected].

Rethinking Your 990: It’s a Marketing Tool, Too!

January 17, 2017 by Spokes For Nonprofits

For many nonprofit organizations, January is the season for closing your books, preparing your financial annual report, generating W2 and 1099 Forms, and preparing all the information you’ll need to complete your Form 990 Tax Filing. It’s all about presenting the numbers to the IRS, right?

Wrong. Your 990 filing tells a story – and lots more folks are reading it than you may realize.

Did you know that your 990 tax filing is immediately posted online for everyone to see once you file it with the IRS? Did you know that you are legally required to provide it to any member of the public who may ask for it and you cannot ask why? Did you know that it has become standard protocol for foundation and corporate donors, government contractors, prospective board members, and financial institutions to view your 990 before investing in or partnering with your organization?

In their article, “Telling the Not-for-Profit Story Through Form 990,”  Marian Butler, CPA, Ph.D. and Brian Butler, identify four (yes, 4!) sections of the 990 and 990EZ that allow nonprofits to write narratives to better convey the value and importance of their mission and programs. Unfortunately, most of the CPAs who prepare the tax forms are not well versed in their clients missions and programs and many will simply copy a few lines of text from a website or re-enter language that has been used in your organization’s filings for years and is no longer relevant or accurate.

Remember, it is a best management practice that all nonprofit board members review and approve their organization’s tax filing prior to finalizing and submitting it to the IRS. When reviewing this year’s tax forms, read the narrative sections carefully and, if necessary, provide your CPA with more accurate or compelling language that will resonate with a wider audience. (And, if the language in the form is outdated and was taken from your website, make sure to update the website, too!) If possible, ask a marketing professional to assist you in crafting the narratives and never miss another opportunity to educate your community on the importance of the work you do!

For more tips on how to better market your organization through your Form 990 tax filing, read the full article here. 

NOTE: Only the 990 EZ and 990 include the narrative sections. If your nonprofit generates less than $50,000 in revenue per year, you will use the 990N. However, you have an opportunity to tell a story with your tax filing, too. Your 990N will automatically be uploaded to guidestar.org and you may logon to the website and post narrative information that enhances the limited information included in your abbreviated tax filing. Contact Spokes if you have questions on how to update your guidestar.org profile.

 

Help for Best Hiring (and Firing) Practices

February 23, 2016 by Spokes For Nonprofits

PICMaybe it’s evidence that our economy is really improving and our organizations have more resources to make long-overdue budget and program to expansions? Or, maybe, as our society ages, more longtime volunteers and donors are making the “ultimate gifts” through generous bequests in support of critical operating needs? Or, maybe, volunteer and employee turnover continues to reoccur and has us looking for solutions to end the cycle that plagues our organizations? Whichever the reason, Spokes has received a rash of recent inquiries and requests for assistance in hiring new employees (especially executive leaders), staff restructuring and mergers. In response to these inquiries, we’re pleased to offer a few quick resources and announce the launch of our new Executive Search Services!

Hiring a new employee can elevate your entire organization when you hire the “right” person. Likewise, it can be downright treacherous and cause lots of expensive and collateral damage for the organization and other staff when you hire the “wrong” person. “Background Checks Vary but Need to Be Robust and Fair” by Eden Stiffman, an article recently published by the Chronicle of Philanthropy, offers some practical considerations for researching a candidate before making an offer. Suggestions include using a third-party to conduct a verified background check and establishing a formal policy regarding if/how social media will be reviewed as part of your candidate evaluation. Read the full article here.

NOTE: If your organization would like to conduct background checks on candidates, remember that the California Association of Nonprofits has discounted services available to its members. Your insurance provider may also have cost-effective options for you. And, if you have a payroll services contractor like Paychex, you may have access to employee screening services through your payroll processor. Remember to budget these checks into your search and hiring costs as they can be expensive.

Often, hiring a new employee is proceeded by the unfortunate reality of dismissing another one. The best practices for dismissing an employee due to reorganization are different from the best practices of dismissing an employee for performance-related issues. Read the Chronicle of Philanthropy’s article, “Advice: How to Know if it’s Time to Fire an Employee” by Pratichi Shaw, to learn what steps are best to take for your specific situation. And, the Chronicle’s article “Terminating an Employee: Handling the Aftermath in Your Organization” also by Shaw offers additional advice to help guide your organization through the after-affects of any employee changes.

Looking for a little more hands-on help? Spokes may have just what you’re looking for! We’ve recently finalized and launched our NEW Executive Director Search Services to assist you in finding your organization’s next great leader. We offer a full suite of services from soliciting and evaluating candidate applications to facilitating your interview and decision-making processes. Services can be provided “a la carte” or comprehensively, based on your organization’s unique needs. For more information, please complete our online consulting inquiry form or call our offices at 805-547-2244.

Nonprofit Cost Saving Strategies: Reimbursing vs. State Unemployment Insurance Taxes

August 18, 2015 by Spokes For Nonprofits

Do you have former employees collecting unemployment benefits?  Does your nonprofit employ more than 20 employees (or at least 10)?  If so, you may be missing an opportunity to save some significant costs for your nonprofit.

In 1972, the Federal Government enacted legislation granting 501(c)(3) Nonprofit employers the right to self-fund for unemployment, rather than pay State Unemployment Insurance (SUI) taxes. Today, thousands of Nonprofits across the country utilize this little known tax break and save millions of dollars on their unemployment expenses.

Here’s how it works – rather than pay SUI taxes that cover all of their employees in case they become unemployed, Nonprofits that self-fund are only responsible for the actual benefits that their former employees collect. This self-funding strategy is also known as “Reimbursing,” and typically saves Nonprofit employers about 50% a year on their unemployment expenses.

Although understandably appealing to for-profit employers, this right to choose which unemployment option they use (SUI tax paying vs. Self-funding) is only available to 501(c)(3) Nonprofit employers.  Read more here to learn more about Self-funding and determine if it’s a potential cost-saving solution for your organization.

Remember: Embezzlers Don’t Want You To Know What They Are Doing

April 14, 2015 by Spokes For Nonprofits

Screen Shot 2015-04-14 at 9.25.12 AM
Click to download this 5-page Accounting Controls Checklist

Far too often, nonprofit board members assume that their organization’s finances are safe because large sums of money haven’t gone missing.  What they don’t know is that embezzlers rarely steal large sums of money.  They don’t want anyone to know that they are stealing money so they do their best to stay “under the radar” in their illegal behavior.  In fact, most embezzlement occurs in increments of $100 – $300 and are recorded as payments to fake vendors.  Sometimes, the embezzlers even create fake invoices to justify the fake payments, further deluding board members who try to track funds carefully.

And, did you know that there is actually a group of criminals who prey on athletic clubs and programs?  Many of these entirely volunteer-run organizations have minimal accounting controls making it easy to manipulate financial data and steal funds.  In fact, just last month, another athletic program fell victim to an individual who stole up to $700,000 from their organization and a local business, both located in Paso Robles, CA. Read the story below.

Protect your organization – and your own liability as a board member – by ensuring that your organization is using proper accounting controls.  Following is a list of several recommended controls any organization can implement to help prevent financial misappropriation.  Employ as many as you can, check references and backgrounds on bookkeepers (volunteer, contracted and salaried) and remain diligent in monitoring your organization’s financial reports and accounts. If you need more assistance in protecting your organization, know that Spokes is always here to help!

Bookkeeper suspected of embezzling from Paso Robles business

By Matt Fountain

[email protected]

March 23, 2015

A Paso Robles bookkeeper was arrested last week on suspicion of embezzling at least $700,000 from a local manufacturing business over a period of six years and possibly embezzling money from the North County youth sports nonprofit where she was treasurer for about seven years.

Police say they are still investigating whether the nonprofit suffered any losses.

Denna Carol Serda, 56, was arrested following an investigation that included a Feb. 5 search of her Paso Robles home and a subsequent review of her personal bank accounts, according to Paso Robles police Sgt. Tod Rehner.

As a result of their investigation, detectives secured an arrest warrant for Serda, who turned herself in to the Paso Robles Police Department on Friday.

She was booked into San Luis Obispo County Jail on Friday on suspicion of felony grand theft exceeding $950 as well as forgery, and the San Luis Obispo County District Attorney’s Office is considering filing additional criminal enhancements for taking property exceeding $50,000, aggravated white-collar crime exceeding $100,000 and the denial of probation for a crime exceeding $100,000.

Rehner would not identify the nonprofit or the private company Monday, but The Tribune has learned they are Make-It Manufacturing of Paso Robles and the Paso Robles Youth Sports Council. Serda is no longer with either entity.

The Police Department said in a news release that Serda is suspected of embezzling more than $700,000 from her for-profit employer between 2008 and 2014. Officers believe Serda also forged more than 450 financial documents in order to embezzle those funds.

Detectives are compiling additional financial documents from the Paso Robles Youth Sports Council; that investigation remained ongoing Monday afternoon.

Greg Powell, president of Make-It Manufacturing, confirmed Monday that Serda was hired as his company’s bookkeeper in 2008.

Powell said he was served with a summons by the Internal Revenue Service, which stated that Serda and her husband, Steven Serda, were being audited for suspicious income. When he met with auditors, Powell said, he was presented with a document on his company’s letterhead approving an employee loan to Denna Serda with his signature at the bottom, which he said was forged.

Before hiring her, Powell said, he knew Serda for years through family and friends, as well as through local youth sports.

He said that he brought the matter to his insurance agent, who is also involved in the Paso Robles Youth Sports Council, for which Serda was treasurer.

“He literally went white,” Powell said. They then contacted police, he said.

Marc Dart, current president of the sports council, said Monday that Serda was one of the founding organizers of the 501(3)(c) and served as its treasurer from 2007 until January 2015.

The nonprofit consists of representatives from local sports organizations, elected board members and liaisons from the city and the Paso Robles Joint Unified School District to advise and petition the city and school district on matters related to youth sports.

Serda’s husband previously served as the sports council’s president beginning in 2006.

Dart confirmed that the organization’s board became aware of concerns about Serda from her employer and asked to discuss it with her. She came in accompanied by her husband, Dart said, and both promptly resigned in January.

Dart added that the organization has gathered financial records and is cooperating with detectives and the District Attorney’s Office.

According to court records, Denna Serda was convicted in 2003 in San Luis Obispo Superior Court for grand theft of more than $400 in property. She served 30 days in County Jail and three years of formal probation and was ordered to pay about $720 in restitution and $700 in other fines.

She remained in County Jail on Monday evening in lieu of $1.2 million bail.

All public phone numbers listed for Steven Serda in Paso Robles were disconnected as of Monday afternoon.

Assistant District Attorney Lee Cunningham said Monday that prosecutors had not yet filed charges against Denna Serda; Cunningham was not able to comment on the possibility of criminal charges against her husband.

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