For Board Members Archives - Page 3 of 11 - Spokes

Unconscious Bias

June 2, 2024 by Michael Simkins

What is unconscious bias, and what can I do about it?

Unconscious bias refers to the automatic, unintentional, and often subtle prejudices and stereotypes that influence our attitudes, actions, and decisions without our conscious awareness. These biases stem from our brain’s natural tendency to categorize and make quick judgments based on past experiences, cultural norms, and societal influences. While unconscious biases are a normal part of human cognition, they can lead to discriminatory behavior and perpetuate inequalities in various areas of life, including the work of our nonprofit staff and boards of directors.

What can I do?

Identifying unconscious biases is a crucial step towards fostering a more inclusive and equitable environment. One effective method is through implicit association tests (IATs), which measure the strength of associations between concepts (e.g., race, gender) and evaluations (e.g., good, bad) or stereotypes (e.g., athletic, intellectual). These tests can reveal hidden biases that might not be evident through self-reflection alone. One resource for such tests is Project Implicit.

Another useful strategy is to seek feedback from diverse groups. Engaging in open, honest conversations with individuals from different backgrounds can provide insights into how your behavior and decisions might be influenced by unconscious biases. Additionally, mindfulness practices, such as self-reflection and journaling, can help increase awareness of your thought patterns and challenge implicit assumptions. By recognizing and addressing unconscious biases, nonprofit leaders and board members can contribute to creating more fair and inclusive communities.

Do we have to follow Robert’s Rules?

April 8, 2024 by Michael Simkins

If your organization’s bylaws say your meetings will follow Robert’s Rules of Order, then yes, you do have to follow them—but do you follow them? Robert’s Rules are complex! It is very difficult to follow them to the letter unless you have a dedicated parliamentarian available. I’ve been on quite a few boards and none of them truly followed Robert’s Rules.

Robert’s Rules provide a method for making group decisions, but there are alternatives that may better serve your board of directors. Here are some examples.

Consensus Decision-Making: This approach involves discussion until all participants can agree on a single course of action. It emphasizes cooperation and collaboration, seeking to address concerns and find solutions that everyone can support.

Consent Decision-Making: This approach involves seeking consent from all members for a proposed course of action. Instead of requiring full agreement, consent decision-making aims to ensure that no member has strong objections to the proposed action.

Democratic Voting: Similar to Robert’s Rules, democratic voting involves members casting votes for different options, and the option with the majority of votes wins. However, the rules and procedures may be simplified compared to Robert’s Rules.

Each of these methods has advantages and disadvantages. I encourage you to check out thedecider.app. It’s a cool tool to help you choose a decision-making model that suits the decision your group needs to make.

And don’t forget! If you decide to adopt a different method, don’t forget to revise your bylaws accordingly.

Investing your reserve funds

January 29, 2024 by Michael Simkins

Our board is looking to know legalities a nonprofit board should be aware of in deciding how to handle or invest a financial reserve.

When one of our nonprofits approached Spokes for help with that topic, our first reply was, “We are not attorneys, tax experts, or financial advisors.” That said, we can offer practical suggestions based on our experience with the many nonprofits we serve.

The most important thing to keep in mind is the board’s fiduciary responsibility to the organization. As part of that responsibility it must act with prudence and with the organization’s best interests in mind.

California has adopted the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which provides guidelines for the investment and management of nonprofit institutional funds. It includes eight factors to consider:

General economic conditions.
The possible effect of inflation or deflation.
The expected tax consequences, if any, of investment decisions or strategies.
The role that each investment or course of action plays within the overall investment portfolio of the fund.
The expected total return from income and the appreciation of investments.
Other resources of the institution.
The needs of the institution and the fund to make distributions and to preserve capital.
An asset’s special relationship or special value, if any, to the charitable purposes of the institution.

In San Luis Obispo County, some of our smaller nonprofits with surplus funds have placed them in FDIC-insured certificates of deposit with varying terms to ensure that funds are available when needed. Nonprofits with greater reserves will want to adopt a sound investment policy in line with UPMIFA.

Learn more about UPMIFA.

Can the treasurer be the bookkeeper?

October 8, 2023 by Michael Simkins

A new nonprofit was struggling to put together its first board of directors. The organizers had contracted with someone to be the bookkeeper and they wondered if it would be acceptable to have that person also serve on the board as the treasurer. The answer: maybe, but it might not be the best idea.

One issue is conflict of interest. Directors of nonprofits are not to benefit financially from their role on the board. So, even if the bookkeeper were a director but not the treasurer, if her firm is paid to do the bookkeeping, that could easily be seen as a conflict of interest. That might be mitigated if the firm did the bookkeeping pro bono. Another possible mitigation is to get bids from several bookkeepers and, if the bookkeeper’s firm is willing to do the work for significantly less, then that also might mitigate the conflict. In the latter situation, the board would want to clearly document the research that was done, and the bookkeeper would recuse herself from participating in the decision to contract with her firm.

A second issue to consider is that a fundamental part of the treasurer’s responsibilities is to provide financial oversight. So, if the treasurer is the bookkeeper, he/she is overseeing him/herself. In that case, it would be prudent to put a structure in place to ensure oversight. For example, the board might formally appoint another person to be the Chief Finance Officer and provide a written description of the CFO’s duties, which would include oversight.

The board also needs to keep in mind that if the organization is paying the director/bookkeeper, then that person becomes an “interested person.” In California, no more than 49% of the board of directors may be interested persons.

Finally, whatever arrangements are made, the board would be wise to put in place some basic internal controls. Here are two useful resources on that topic.

Two Important New Employment Laws

December 17, 2022 by Michael Simkins

Pay Transparency

Among the new employment laws that go into effect January 1, 2023, two deserve special mention. One, referred to as “Pay Transparency,” applies to your nonprofit if you have 15 or more employees. Starting January 1, you’ll need to include pay range information in any job posting. In addition:

ALL employers must provide a pay scale to any current employee for their position upon request.
Employers must also maintain records of a job title and wage rate history for each employee during employment and for three years after separation from the company
All private employers with 100 or more employees must file pay data reports with the State’s Civil Rights Department, regardless of whether they are required to file a federal EEO-1 with the EEOC. (Note: nonprofits are considered “private employers.)

Retirement

The other change has to do with retirement programs. The CalSavers Retirement Savings Program is a state-run retirement program for employees who work for employers not offering a private-market retirement plan, such as a 401(k) plan. Previously, the law only applied to nonprofits with 5 or more employees. As of January 1, it applies even if you have only one employee.

Learn more

Spokes members can view the 60-minute video overview of these and other new HR-related laws for 2023. Sign into your account, click “access member benefits,” and go to the Video Library. You’ll find the recording in the Past Classes showcase. Not a member yet? Check out the member benefits.