Wednesday, December 3, 2008

The Real Clients of the Nonprofit CEO – It’s the Staff – Here Are 29 Reasons Why

We can make an argument that the clients of the CEO are the people served, the community, the board or the supporters and funders. And they are truly clients from time tom time for the CEO. For me, however, the number one client is – staff. Here are my top 29 aspects that the chief operating officer or executive director must exhibit for the nonprofit or nongovernmental organization employing her or him.

  1. Listen to staff, board and community. There is a reason this is first. CEOs and other leaders have a tendency to always talk at meetings. Learn to be brief if it is necessary to speak. Learn to actively listen to others. Listening is more and demands more than hearing people. Take it all in – the words, the phrases, the inflections, the facial expressions, body movements or lack thereof, the context, the group in the room, the emphases. The worst line a manager can say to staff is “I have an open door policy.” No you don’t. You are always willing to arrange a suitable timely period to talk. Make yourself available in person when both of you can talk.
  2. Provide leadership and encourage others to lead as appropriate and as needed. You are not the only person in the organization who can provide leadership. Use and let knowledgeable staff to develop and provide leadership when appropriate.
  3. Maintain and translate an understanding of the organization’s mission, values, vision, ethics and culture. Stimulate the energy and focus of the staff about why the whole thing exists and their roles. Translate the mission, vision and passion to board, employees and volunteers
  4. Know what everyone in the organization is doing to further the mission and he vision. You do not need to know how they do it, but you should know what they are doing and why they do it.
  5. Guide the organization through though and good times. One of the most difficult times for a CEO is when she/he does not know the answers or a best guess about the future. In these hard economic moments the CEO has to find and look at the facts and make best judgments for the mission and vision of the organization. There is an old saying, make haste slowly. When facing decisions, which decision are you likely to regret the most; it may be the right decision to make?
  6. Relate and develop relationships between staff and board. Avoid being the funnel between the board and staff. Make room in terms of paid time for some staff to attend board meetings. If the board and the staff are to be working on the same mission and vision, why should the CEO stand in the way?
  7. Play a supportive role in downsizing. That is not a contradiction of terms. It’s your job. I don’t care what it is, freezing or reducing salaries and benefits, laying people off, closing offices, shutting down programs, reducing hours, giving some people lead time to leave their jobs – it is difficult. No one will feel good about any of the decisions. Morale will fall. Gossip will increase. Facts will be twisted. Lies will be created out of whole cloth. Know it in advance. During this entire maelstrom, the support you give is to stay focused on the mission and vision of the organization. Tell the truth. Tell the staff what the current situation is and what the future presents, no matter how bleak. You are dealing with human lives. Spend time with staff and their pain. See #1 above – actively listen and respond with understanding. They may beat you up, but the problem is bigger than you and you can be bigger than the criticism. Take the high moral ground. The attack may be at you, but not about you. It is about the bad decisions that have to be made. It is about the causes that may not be fully understood. But you have to do it. Often times not making a decision is worse than making a bad decision.
  8. Develop fair, equitable salaries and benefits comparable to similar employment in the public or private sector. In good time and in bad times this may be my most critical point about our sector. We have bought into the myth that people work for nonprofits for personal satisfaction and they expect lower pay and benefits. As the CEO you should serve your clients much better than this. Salary comparability studies should be made. They are not difficult. I do not mean comparing your staff with nonprofit staff elsewhere. I mean compare staff salaries to comparable public and private wages and benefits at the local, regional or state levels. That comparability may be your staff is being paid currently at fifty% of the other sectors...are you satisfied and proud of that? What about mileage? In many nonprofits staff account for 70% to 85% of the budget. Generally the only salary out of that which is closest to comparable is the CEO’s. Yes, higher salaries will mean fewer staff members. That is the way it will be. Fewer staff members may translate into fewer case numbers. It may increase the quality for those cases handled. We have to do something here. We are cheating the staff, lying to funders about what the mission really costs and ultimately in my view the public. I do wonder if unionized nonprofits are faring well on this point.
  9. Create good, clean, safe and appropriate work space, comfortable chairs, desks, file cabinets, desk top equipment, and comfortable and attractive public areas. Have accommodations for disabled employees and guests. I am not talking top of the line and hiring a decorator. I am talking about showing dignity and caring for the work area. Each employee should have her/his stuff. Paint sometimes can do wonders over a couple of weekends – yes, as work time if necessary. Some staff member or board member or volunteer may know somebody who can reupholster the chairs in the common areas for the cost of the material.
  10. Provide sufficient and appropriate equipment and technology. Computers, monitors, calculators, printers, copiers, software programs, and other technology should be available, maintained and upgraded for staff to perform their work effectively and efficiently. And staff should be trained on how to use it.
  11. Budget for periodic relevant and fair training for staff and yourself. Although not every employee needs to attend a training event annually, there should be budget line items for training and travel for more than the CEO and other top echelon people. There can be room for paying for continued education for licensed staff. But more than that, other training is available in nonprofit accounting, support work, dealing with difficult people, employee relations and more.
  12. Assure productivity, goals and objectives are being measured and being met or revised as needed. You should be receiving regular reports showing the key features – not all features – about how the organization and individual staff members are producing, whether they are meeting goals and objectives in a timely fashion and you should assess where there are weaknesses, strengths and where changes may need to be made.
  13. Oversee supervision and leave nothing to chance or favoritism. Do not assume the senior employee, the highest degree or licensed person or the most experienced are doing what they are supposed to do and with quality. Verify they and all staff are doing the job correctly, meeting contract or legal compliance and are timely with work and reports.
  14. Know where the money is and where it is going. Receive and review fiscal reports including originals such as bank statements and check books. Check frequently that separation of duties for fiscal matters is functioning. Look at cancelled and voided checks for number sequential, payee and amount with billings. Review all payroll material.
  15. Know and utilize the lessons from the past and be creative in the long run - your own and the organization. We all learn from the past. And for most of us we will repeat the mistakes from the past. This is a sensitivity you as CEO should exhibit and retrain yourself to avoid them.
  16. Spend time planning fiscally along with the goals, objectives and activities of the organization. Look at the books in the context of what the staff and the organization are doing. What are you spending the money on? Do you have knowledge about the cost centers of the organization and why the money is spent that way? Do the priorities match the expenditures?
  17. Lead by guiding, modeling, mentoring by following when others know more than you do. You do not know everything and you do not know more than your staff put together. You can model what expectations are with humility and grace and honor and silence for others.
  18. Insist on evaluation of all employees on a regular basis including you. This starts with you. Help your board develop a legally defensible annual evaluation system with timely written evaluations for all employees and a written annual evaluation of you
  19. Assure responsible hiring. Develop the written policies, procedures, forms and recordkeeping of written on recruiting, hiring, training, and firing, Develop written personnel policies and procedures.
  20. Offer staff opportunities for growth, development and promotion. This can look to be next to impossible for a staff of 25 or less but it is not. Employees need to grow in their jobs and their accomplishments. Find creative ways to do this in consultation with staff.
  21. Help create and maintain a cultural competent environment. Set the mood, the standards and the actuality for cultural diversity in the organization. Be sensitive and aware of activities that may create barriers to the diversity and those that encourage a natural environment for diversity.
  22. Foster mutual respect and problem solving among staff. Set the tone and the skills for respecting differences of opinions and convictions. Provide the atmosphere for staff to resolve their own differences before heading to you or a supervisor - or the rumor mill
  23. Encourage a corporate culture that fosters cooperation, initiative, creativity, partnering, honesty, open communication, behavior and change. A silent and an acknowledged corporate culture exists in every organization. Your task is to keep those two cultures carefully aligned for the results listed above.
  24. Recognize and celebrate organizational and individual achievement, workable innovation and results. A negative environment may be productive but not without its costs. That is also true for a positive supportive organization – too much time spent on creature comforts of staff will have its costs. The staff is not the reason the organization exists but they are your clients. Salute them for work well done.
  25. Consider openness to new forms of work including telecommuting, networking, communicating. These may help the organization function more efficiently and effectively. It does take time thinking and planning in order to save in the future. Consider these along with other ways to be a better program.
  26. Partner at the top level with similar organizations working on the same mission in the region, state, country politically. Small and medium sized programs can suffer from being alone, not connected to other organizations that share similar missions, visions and history. CEOs should spend time looking for compatriots for partnering for support and even political support. You can gain muscle for the clients of the organizations and for your organization about public policies and funding nationally, statewide or regionally. You are not alone, why act that way? You can perform advocacy. Learn the rules. See Resources below.
  27. Throughout the organization foster an understanding about partnering with other organizations. Lead staff to partner with others and to be aware of services and activities that can be used by the organization’s clients. Duplication is wasteful. Funders are looking for realistic partnering not just simple referrals or nice-nice between CEOs.
  28. Find time for reflection, soul searching, contemplation, silence. I have a spiritual sense of our work in the nonprofit world. Our work is above us and guides us. I am not talking about religion or any God. I am talking about spending time with your soul and the soul of the organization. Think about you. Where are you doing well and where must you grow? Find a silent period on the clock or off it, but find it for the organization and for you.
  29. Prepare for succession of staff, board and yourself. One of the most important concepts an organization’s people have to understand and live with is change. Staff and board members will reign. The great CEO -, and founding person – will lead for change. Succession planning at levels is important. There needs to be in place a process to develop corporate memory so that what is lost by the person is not also an information lose. It is very important that the board have a plan for your successor. That could be tomorrow. Plan for it. Plan on it.


Making Performance Management Work ... Better -

Reducing the Fear Factor Workers look for reassurance from their employers as the financial downturn raises economic anxiety to new heights, by Ed Frauenheim and Jessica Marquez -

The Numbers behind Workers’ Financial Fears: From unemployment to home foreclosures to declining wages, employees’ economic fears are well founded. -

Looking for the Exit on Wall Street, by Jessica Marquez -

Most Employers Exercising Caution on Slashing Jobs, by Jessica Marquez -

Lobbying and the Law =

Nonprofit Advocacy and Lobbying -

Alliance for Justice Worry Free Lobbying for Nonprofits -

Lobbying and Advocacy Handbook for Nonprofit Organizations: Shaping Public Policy at the State and Local Level -

Introductory guide to policy & lobbying for nonprofits -

Why Don’t Nonprofits Fire Poor Performers and Jerks?

24 Factors In Developing an Exit Strategy for Nonprofit and Nongovernmental Organization (A Business Plan in Reverse)

According To My Crystal Ball, Your Nonprofit Organization May Be Toast In 2009

Friday, November 21, 2008

According To My Crystal Ball, Your Nonprofit Organization May Be Toast In 2009

Who will lose most in these tumultuous times? Where will the money come from in the next several tumultuous years for nonprofit and nongovernmental organizations? One thing is clear: it will not be from banks, insurance companies, lending institutions, corporations, Chrysler, General Motors, Ford or investment firms.

Foundations are looking at what they are currently funding and how to maintain that level of funding. For some it means increasing their giving from the norm of 5% of investments to 6% annually simply to keep pace for their current grantees. They will attempt to honor their commitments but not necessarily add new grantees. For others it means lowering their grantees’ expectations.

Most if not all foundations have laid out a three to five year plan for funding. They are aware based on current data what they can expect to do in the next year or two with some certainty. I am going to find it very interesting - and probably very disappointing - to see how many foundations are open to new applications in 2009 and 2010 that I can list in the Grant Opportunities at CharityChannel.

Count on it: there will be greater competition for funds. Your organization and applications will have to be quality AAA+. And your relationships with people who know funders will also have to be AAA+ rated. Your relationships will have to be quite powerful through the six degrees of separation.

Competition for state and Federal contracts will also see high competition. For-profit and nonprofit organizations will compete for those contract-type grants for services government does want to perform itself.

For many nonprofit and nongovernmental organizations it will mean reducing programs and services, closing offices, going out of business, merging, layoffs (Reduction in Force, Riffing, more on this in a future blog), salary freezes, loss of fringe benefits, changes in the way you do business, shifts in policies to meet the clients’ greatest needs and other innovative responses.

I think we can expect most foundations will not change their priorities for funding. On the other hand we may see an enormous need to provide emergency shelter, food and clothing for numbers of people far larger than now. Who will fund emergency shelters and food banks? What will be the pressures on local United Ways, community foundations, local trust funds and other local funders to meet basic human needs?

What are you planning for the next 1-3 years to provide your mission and vision? Where are you planning to be frugal? How wide are you opening the window of NPO/NGO secrecy and becoming more transparent and accountable? How are you prioritizing what you can and will do under your mission and with reduced funding? Most small and medium sized nonprofits should be looking at 10-20% reduction in 2009 and even more in 2010.

Is it realistic that your group will survive the next 1-3 years? If not, what should you be doing now to close down appropriately and help clients after you are gone?

The list below is my best guestimate of where there will be substantial reductions in funding.

New organizations – Generally funders want to fund groups after they have been in business for some 3-5 years. Most foundations and corporations do not say this at their web sites but it is a fact. All funding is built at a minimum on relationships, friends, local supporters, contacts, viable mission, vision and passion. Those things alone will not work unless there are proven accomplishments, partnering, mission-based social values, demonstrable and meaningful goals and objectives, demonstrable fiscal responsibility and integrity, leadership, transparency and sustainability over a certain period of time. Even with all that there will still be incredible competition so that many new organizations if not most will not receive grants in 2009-2010. The lone exception will be national or international start-ups by notable people, former governmental officials, the very wealthy, show business and sports personalities, although that does not necessarily equal quality and effectiveness. Before anyone starts a new nonprofit, you MUST assess what the realistic future will be in your written business and resource development plans.

The "Big" dictate the funding - One fear I possess is the impact of the "Big" contributors. Beware the "Bigs"! The "Big" foundations from Bill Gates, Bill Clinton, Warren Buffett, George Soros, Australian Iron-ore magnate Andrew "Twiggy" Forrest and other very wealthy leaders globally are growingly dictating the priorities for grant awards and giving. The more they control the greater percentage of grants, the greater their influence. It is not simply an issue they are funding the wrong issues. It is not about wrong issues. They are demonstrating what they believe to be the global needs and how they are to be met. They influence others by modeling where charitable gifts go and what they pay for. The more they influence and gain partnerships with other funders the narrower funding will be at international and national levels and ultimately local levels - the new trickle down theory. Pet projects in their "home towns" and the "home towns' of their supporters will reduce local funding in other communities. The "Bigs" are also setting the tone by their local giving as to priorities. When Gates provides funding for certain programs in schools in Seattle, other local funders may follow suit in their own communities. Foundations need to heed their own responsibilities and listen to their constituencies for the expenditure of ever reducing funds now and the next several years. Foundations and NPO/NGO organizations cannot turn lazy and let "Big" run the Third Sector.

Social welfare – This may be one group that will see the least amount of reduction in funding. The NPOs here may have to redefine their missions and take a hard look at what the priorities are. Expectations may grow that sliding fees for service are necessary in the future. They will have to look hard at collecting fees with greater force from third party funds such as health insurance, Medicare and Medicaid and individual or private pay where appropriate. Programs in family services, children and youth services, drug and alcohol, mental health, case management, outreach and others may also have to triage who their clients or customers will be in the future and prioritize what they can in fact accomplish.

Health care – More than others this may stay steady. Government funding for drug, alcohol, HIV/AIDS, mental health services may be reduced but probably not vanish. Funding for research may drop a little.

Advocacy- Although there is some movement by foundations to fund advocacy, it is small and late in the process. Government and corporations will not fund advocacy unless it meets their goals and they approve of the activities. Many nonprofits do not have a clear understanding what can and cannot be done in advocating, but their leaders should be studying it; you cannot apply for what you do not know. Certain affinity groups have been funded for advocacy such as women, gay, lesbian, bisexual, transgender, and people infected and affected by HIV/AIDS. The advocacy purse will, however, become smaller.

Community organizing – Without defining what we mean by “community organizing” this has received short shrift for decades. There are some progressive foundations that have been consistent in funding community organizing and advocacy but they are generally smaller foundations. Local foundations have shown leadership here and may continue at the local level but probably with less funds and narrower priorities.

International development – Governments and banking/lending institutions will reduce funding or eliminate it at this level for the foreseeable future. Governments may find openings for political gain funding some areas of the world. The new U.S. President and Congress will have to take some leadership here. The Clinton Foundation may suffer some reductions in ability because of the potential appointment of Hillary Clinton to the Obama Cabinet.

Animals – Whether the animals are horses, domestic cats and dogs, tigers, elephants and so on, funding will take a deep cut. Some governments may continue to fund certain endangered species. The search for oil, coal and natural gas, the expansion of corporations to find minerals, the deposit of atomic fuel will receive easier licensing or smaller penalties allowing a greater negative impact on creatures large and small. The work of dedicated volunteers will have to be enhanced in my view.

Art and culture – With few exceptions, art and culture funding will be reduced. Museums, classical orchestras, libraries are already reducing budgets for 2009-2010 substantially. Grants, membership dues, and other fundraising activities will be more difficult to secure. Fees for service will have to be considered.

Technical assistanceNPOs seeking technical assistance in terms of planning, management, board development, priority setting, succession planning, will not find willing funders unless they already are funded by a foundation that has provided this support over the years.

Training grants – The training of boards, staff and volunteers has been a low value for most NPOs unfortunately. Training for capacity building, best practices and other buzz word activities will not be seen as valuable for funders. If NPOs do not currently have funding for capacity building and best practices, there will not be funding to rescue them.

Technology grants – There have been periodic grants available from government and corporations for technology. Technology grants for nonprofit groups have generally been part of the budget request for foundations and other fundraising. There will be a sharp decline in interest to fund this element although many NPOs now put this at a high priority. It may be that those who delayed to take technology seriously have waited too long. If you snooze, you lose. Seeking donated equipment such as computers and telephone systems will have to be the method for the future but funds for compatible systems and training staff to use the equipment and to maintain the equipment will be hard to come by.

Environment – As more and more corporations and governments claim to be going “green”, the tendency could be a decreased support for other environmental activities. This could be one of those: Be careful what you ask for. As conservation apparently wins through societal, corporate and governmental activities and policies the less conservation may be seen as valuable to funders’ causes. Cultivating current supporters may be the necessary priority over the next 1-2 years for eco-nonprofits.

Education – This group receives the second largest funding after health. I see little change here. The reductions here will probably be from corporations.

Toast – So, are you headed to the toaster?

What are your thoughts on these issues?


GLOBAL: Tight belts, tough choices for charities from IRIN November 13, 2008

In a Successful Campaign: Lessons for Nonprofits by Paul Schmitz

Fundraising in a Cold Climate, 6 October 2008, Prepared by: Dennis O’Connor and Deirdre Hatch

The Cohen Report: What the Financial Sector Meltdown Really Means for Nonprofits and Philanthropy

Because Things in the Game Done Changed: Nonprofits Need Generation Y Leadership in an Uncertain Economy Posted on October 27, 2008 at Nonprofit Congress by Rosetta Thurman

Past Economic Downturns and the Outlook for Foundation Giving -

Foundation Giving Priorities Remain Consistent During Economic Slowdowns, New Foundation Center Research Advisory Shows -

Aid charities are taken to task over their 'culture of secrecy' By David Ainsworth, Third Sector, 5 November 2008

N.J. arts groups get ready for a 'bumpy financial ride' by Laurie Granieri,, November 13, 2008.

Survey: Nearly 40 Percent of Businesses Poised to Lay Off Workers - If economic conditions don’t improve soon, it appears that the majority of companies are set to begin implementing hiring freezes or laying off their workers. About three-quarters of human resources executives polled at several hundred companies said budget cuts across their entire organizations are likely.

2006 Statistics Distribution of Foundation Grants by Subject Categories -

Australia’s Richest Man Plans to Give It Away -

World's 25 most influential billionaires -

24 Factors In Developing an Exit Strategy for Nonprofit and Nongovernmental Organization (A Business Plan in Reverse) -

Nonprofit Incorporating - Business Plan -

How Do We Find Local Support for Our Program? -

Monday, November 17, 2008

One Phase of Nonprofit Organizational Readiness for Grant Funding: Recordkeeping

Every organization needs well-planned, carefully maintained files in order to handle applications, grants and to function effectively. Setting up a useful filing system can be an easy task if several basic decisions are made beforehand. This article offers an outline of what an organization can expect to maintain: written policies, procedures, forms and recordkeeping. It will discuss the need for maintaining, retrieving, archiving and destroying records and accountability for each.

I have included a list of resources for deciding on retention deadlines and management of records.

There are those of us who see the mission and the vision of an organization as a spiritual process seeking and expressing the values of the organization. It is outward, not inward. It is the pursuit of excellence, not necessarily perfection. It is an experience of constant renewal; there is a dimension of the human soul and an orientation of the heart. It is a way of making sense of the insensible and insensible.

Beginning and working in a nonprofit organization is a leap of faith. It is walking to the end of a cliff and taking one more step. It is a calling that is difficult to put down. It is a risk about which we are passionate. With this spiritual side of an NPO, there are the hard facts that leadership, paper work, recordkeeping, management, budgets, grant writing, fund raising, cleaning the bathroom are the outward and visible signs of that inward and spiritual belief in the mission and the vision of the organization.

And so here we go.

How long should you keep records? Some records may have to be kept 3 years, some 7 years, some permanently. Your state or the grant or contract may have minimum requirements for keeping records. It is my suggestion that you have a written policy about keeping these records and more such as business-related web sites and significant e-mail at least through the state or Federal statute of limitations for bringing a lawsuit against the organization and any subsequent appeals. The statutes of limitation are different state by state and with the federal law; they are based on the type of suit or administrative complaint.

It is important that you meet with an attorney to assist on this and other policies to be certain you are appropriately protected.

Specific people should be assigned responsibility for maintaining specific files. Once these assignments are made, everyone in the organization should know who can assist in locating needed information, as well as to whom various documents should be given for filing. When an organization has staff and an office, the staff usually maintains the files for the organization in the office. Public disclosure laws require certain information be located in all offices with three employees or more. Privacy laws may affect the way you handle personnel records and the records of applicants for employment.

In an organization without staff, generally the secretary is responsible for maintaining corporate records, correspondence, and membership files, while the treasurer is responsible for all financial records. The bylaws should clearly state that the officer, secretary and treasurer are obligated to return all records to the organization president or chairperson when relieved of duties. Make sure board members know who is responsible for what, and that nothing falls through the cracks.

Nonprofit organizations should have a written, mandatory document retention and periodic destruction policy. Policies such as this will eliminate accidental or innocent destruction. In addition, it is important for administrative personnel to know the length of time records should be retained to be in compliance with the law and with contracts.

I also suggest checking with your attorney and accountant before destroying any records.
But First: An Important Tip - Always return all material to the proper file promptly to avoid loss of important documents.
Records and Files to Be Kept
The following are samples of records you should keep permanently, even if the law or a grant permits a shorter period. Your state/province may have statutes of limitation for legal action that will influence the maintenance and destruction of records. Some of these records will be important to preparing a grant application.
  • Audit reports of accountant or board committee
  • General ledger
  • Cash books, petty cash, client funds
  • Charts of accounts
  • Transfer registers
  • Bank statements
  • Property lists and inventory, serial numbers, date of purchase, original cost, grantor(s) who paid for it, purchase records
  • Checks (canceled, and especially for taxes, purchase of property, salaries, contracts, etc.)
  • As appropriate copies of staff licensing (i.e. social worker, doctor, lawyer, psychologist, nurse), staff and volunteer motor vehicle insurance if driving clients or for other work duties
  • Employment contracts
  • Personnel records and material filed by applicants for employment
  • Hiring policy, procedure and application forms; establish a written policy for the retention of applications, resumes and employment inquiry letters, from three to six months but there is an argument that you need to keep them through the statute of limitations for any potential law suit.
  • All employee withholding, transmittal, reporting, forms filed.
  • Written policies, procedures, forms and recordkeeping such as Personnel Manuals, Equal Employment, Anti-Sexual Harassment Policy, Drug and Alcohol-Free Workplace Policy, Violence in the Workplace Policy and Procedure Manual, Standards of Practice, Ethics, etc.
  • Employee benefits and records of accrual, employee time and travel sheets
  • Policies, applications and records of volunteers
  • Correspondence (legal and important letters)
  • Records of all gifts received and letters of acknowledgement
  • Deeds, mortgages, easements and bills of sale
  • Financial statements (at least end-of-year, other months optional unless required by law or a grantor)
  • End of year trial balances
  • Insurance policies and other records, correspondence, claims
  • Current accident reports and claims
  • Journals and minutes of Board meetings and attachments
  • Charter or incorporation papers with amendments, bylaws and amendments and change of registered agent, state and local approvals and reports
  • Purchase of Service Agreements.
  • Memoranda of Understanding (MOU)
  • Copies of all Federal, State and local tax documents, e.g.: Federal Employer Identification Number (FEIN), IRS designation letters, state identification number, all correspondence with the IRS and state including annual reports, 990 and so on
  • All correspondence to or from federal, state and local taxing agencies, tax returns, extensions, worksheets, reports, income tax forms etc.
  • Property records (costs, depreciation, blueprints, plans, etc.)
  • Trademark registrations, patents and copyrights and applications
  • Material related to any threat of or actual lawsuit or administrative claim including but not limited to civil rights, ADA and other potential liabilities, subject to statute of limitations; avoid destruction of e-mail and other records that may impact litigation
  • Client or customer's files; client or customer complains, contracts, a state or federal Statute or a licensing organization may set time lines for retaining these files but be conscious of the statute of limitations for legal action by a client or customer
  • Copy of all matters posted on your web site
  • Significant and relevant e-mail, instant messaging, and other telephonic communication systems
  • Labor contracts
  • Training and orientation material
  • Hardware and software licenses
  • User names and passwords
Important Tip: Nonprofit organizations should give careful consideration to written policies, procedures, forms and recordkeeping separating duties between officers and employees. For instance the duties of opening envelopes with checks, registering the checks, preparing bank deposits and accounting for funds are different duties that should be shared by various board officers or employees. Talk with your accountant to develop these written policies, procedures, forms and recordkeeping to increase accountability.

There are two other files that the organization and development people should create, The Dream File and The Memory File:

The Dream File – This file should contain the dreams of programs and activities that leadership, staff and others present for funding ideas. They may be somewhat far fetched. They cannot be off-mission, however. The record of a dream may be simply a few lines; it may be several pages with details started. Take the time to dream and capture the dreams for potential funding opportunities and partnerships. Add to the dream file material from what you read or what you hear, a line may make a good opening to a grant application if on mission I have used lyrics of Bruce Springsteen successfully more than once to lead off the cover letter.

The Memory Files - These files should contain information that a potential funder may request. Have them clearly available so that there will be no delay or lost opportunities for grants. There is no consistency about what funders want. These are samples of commonly requested material:
  • Original verified copies of the Articles of Incorporation and any amendments, and copies of the bylaws and all amendments,
  • History and mission of the organization,
  • The completed IRS Form 1023, FEIN, state identification number or other papers
  • The last three years of 990s, audits and management letters,
  • Employee and board job descriptions,
  • Leadership resumes,
  • Current annual budget,
  • Board minutes and fiscal reports for the most recent 12 month period,
  • Evaluations and monitoring reports by any funders,
  • Press coverage, Internet references
  • Names and short biography of board members and staff management and leadership,
  • Templates of the description and brief history of the organization, its mission, goals, objectives, activities,
  • List of current funding sources,
  • Business or strategic plan, needs assessment and priority studies,
  • Building plans and
  • Any other papers you believe may be relevant to a government, foundation or corporation.
The copies sent to a funder should be legible and presented in and orderly and best possible fashion. It may help to have an appendix sheet listing additional material. Some applications require consecutive numbering from page 1 through the last page. A copy of a that is crooked or the bottom cut off is not the way to do it.

Funders may request all material be on back-to-back paper for conservation. Others may request 20 copies of everything. Follow the instructions. Provide what they ask for. Follow instructions as to what they do not want. You are putting your best foot forward here. Show your professionalism, your passion and abilities.


The recordkeeping about recordkeeping should give guidance concerning categories of records, access to records, forms, schedule for retention or destruction, schedule for archiving if appropriate, methods for retrieval and notice of who is responsible for the action.

The board needs to develop written policies, procedures, forms and recordkeeping capability for fiscal, legal, contract, employment and other accountability. Who will maintain the corporate files for fiscal accountability? Who does not have access to certain records? How will the board know what is going on?

Where do you keep these records? What facts and documents of your organization are available to the public? If you receive public funds there may be requirements from your state law or funding source about more public accountability. If you have staff, there are certain personnel records that may not be released, such as health records. On the other hand, there are some personnel records open for inspection at least to funders. What other records should an organization retain permanently and in what format? Who may have access to the records?

What policy and procedure will you have for destruction and retention of records? What system will be used for retrieval of documents? Who has access and who has the right of access to these records?

Where do you store the old records for your organization? In a disaster, how vulnerable do you think these records will be? There are consultants to help you assess the vulnerability of your organization to disaster, but they may be more costly than you can afford. But what can you afford if you lose everything?

The best advice: Plan ahead. Keep copies of backup material off site. Store it in an electronic vault or secure web site if necessary. Double-check your insurance – does it cover floods if you are near water or other disasters? Develop a plan for protecting your business so you will be up and running as soon as possible.

If you are going to seek grants, be certain you have looked carefully at the responsibilities, recordkeeping and reporting in the application and in the contract.

I am required to tell you that I am a licensed attorney in New Jersey. It is not my intent to provide you with legal advice. I may have given you legal information but I have not given you legal advice. Reading this material is not a substitute for seeking legal assistance in these decisions.


Document Retention Limits

A limited list from Pfau Englund Nonprofit Law can be found at

Records Retention Schedule at Delaware Association of Nonprofit Agencies’ web site -

Document Retention In The Digital Age: How Long Is Long Enough? By Philip L. Gordon of Littler Mendelson, P.C. -


The Basic Guide to Nonprofit Financial Management by Carter McNamara at

See the Policies for Financial Accountability at Idealist/Action Without Borders

Financial Management -

Foundation Center Tutorial, Proposal Budgeting Basics -

The Sarbanes-Oxley Act and Implications for Nonprofit Organizations

Compendium of Standards, Codes, and Principles of Nonprofit and Philanthropic Organizations -

Audit Committee Toolkit -

Checklist for Accountability -

Insurance Questions for Nonprofits

Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations. and

What Must We, What Can We Disclose to the Public, Staff, Board and Clients? -

Standards for Charity Accountability -

Nonprofit Governance and Accountability -

Evangelical Council for Financial Accountability Standards and Best Practices -

Maryland Nonprofits: Standards for Excellence - An Ethics and Accountability Code for the Nonprofit Sector -

Grant Writing Tools Web Sites -

IKnow is Interactive Knowledge for Nonprofit Organizations Worldwide -

Is a Grant Right for Your Agency? A helpful one page check list from U.S. Department of Agriculture - 

Wednesday, November 12, 2008

U.S. Election Night 2008 - Flashes of My Life Came Before Me

Watching the U.S. election returns on Tuesday night, November 4, 2008, brought many flashes of memories and experiences into my frontal lobes from 76 years. They, whoever they are, say your life flashes before you before you die. Well, what I know is that night my life flashed before my eyes and I am alive. They are vignettes.

From my childhood In Pleasantville NJ in 1940 when I could visit a black friend in his house and he could visit me, but he was not allowed in our house; I did not understand why. I traveled with the Wildwood High School (NJ) basketball team and every year in certain communities we would have windows broken on the bus because we had black players.

In college I did sports broadcasting for the four years. We went to Annapolis MD to broadcast a game between Gettysburg College and the Naval Academy. The only black student in Gettysburg was with me. We were not allowed to eat anywhere in Maryland together so we did not eat.

In seminary a black friend from Pleasantville NJ and I worked on a model mission to South Philadelphia, poverty, racism, prostitution, unsafe housing, no employment but near the University of Pennsylvania. He was a friend of my childhood friend who was then a cop. The model served as the way I started a community center in Camden NJ about 5 years later. Both friends are now dead.

I was almost fired from my first clergy job in Grace Church Plainfield NJ in 1958. My boss was on vacation in Nova Scotia and I was left in charge. On one Sunday I preached on the question why there were two Episcopal Churches in the small community of Plainfield, one white, one black, and how can we begin to worship together. Before the service was over my boss was on the phone waiting for me. He asked what happened. I told him. He said yes that is basically what he heard. He said some of the leaders wanted him to fire me. He then told me he was not coming back over this issue and to preach about whatever God and I decided. So I did it again the next week. The ceiling never caved in.

On April Fool’s Day, 1959 I moved to Camden NJ to work in an inner city church. Camden: too many mountain top experiences, too many sadnesses to write here. I started the community center across the street from the church, a huge building, a half-block long, three stories high with a gymnasium, library and rooms everywhere. It became a center for children and youth and for inner city adults, my neighbors, working on community issues.

The flashes include being on the Civil Rights March in 1963 in Washington DC and listening to Dr. Martin Luther King preach. There must have been 50 speeches that day, but only one conquered us. I heard an earlier version of the speech that he gave in Detroit, but he was under the spirit that bright sunny day in Washington DC and it became a hymn. He gave us all a dream. We knew we could realize it. But as decades past the dream stayed a dream.

JFK's death. King's death. Bobby Kennedy's death. Each was a different experience. When JFK was shot I was driving a parishioner for her brother to enter a rehab center in Princeton. When we arrived no one was in the reception room. That is when we three learned of it.

Martin and Bobby's deaths I was in Camden and I opened the church for anyone to use. We had an impromptu service for each and the church was almost filled both days by folks who did not go to our church. The neighborhood mourned there those two days, however. We did together. Many civil rights marches. The Camden riot. Speaking before Senate and House committees about Camden and urban renewal. Blocking I-76 from coming into Camden until there were protections for a public housing complex and competent relocation of families throughout the region, not just in the inner city.

Changing dim light bulbs in tenements from 25 watts to 100 watts. We did it because it made sense. The hallways were dark, the stairs dangerous, the tenants black and Hispanic families. If the landlord removed them we replaced them.

The church was all white, suburbanites coming back to the old neighborhood, when I started work there. The church was a white spiritual doughnut hole in a black and Hispanic poverty community. After I started the community center with their help in 1960, we saw black and Hispanic people begin to come to church. Then regularly. I started a new custom of greeting each other with a fold of the hands over the others in the form of a cross. White, black, Hispanic touched each other. I held a jazz mass. Black jazz musicians.

Black power. A description of a people changed from Negro to black to African American in a flash it seems. I remember being trailed by Camden police wherever I went with black kids or adults in the car. I remember riding shotgun with a sheriff many nights. He was Arnold Cream, a hero of mine from high school. He was also known as Jersey Joe Walcott, former heavy weight champion of the world. We were friends in Camden.

I remember he and some federal employees worked with me to bring H. Rap Brown, later Jamil Abdullah Al-Amin, to the community center to speak. He was wanted for federal offenses at the time. Brown was sneaked into Camden and out by black law enforcement and federal officials. He was a leader of the militant black power group, the Black Panthers. And he was a hero in the black community. He is now in prison on a homicide conviction. He was a wonderful speaker.

Minister Malcolm X came to Camden in 1965. I heard him preach and he was phenomenal. I was one of a few white people there, escorted straight to the front of the convention hall by a Muslim Guard. He entered the stage to a standing and tumultuous greeting. He looked around the auditorium and then said, I hear there are some white people here today but I cannot see them for all the beautiful color. The place went over the top! I never felt fear or apprehension. I was with neighbors and friends, why should I? I also met him for a brief talk. Weeks later he was assassinated.

My oldest daughter was with me through most of these events. I was a single parent.

I remember meeting after meeting in our house with African American and Hispanic and white leaders talking about the present and the future of Camden through the 1960s - one eventually became governor of NJ; another became the first minority/Hispanic on the Federal Court in NJ. I learned so much at the feet of black women who wanted so much more for themselves, their children, their community, their country. At that time we were simply trying to get a minority on city council. We did, the brother of the future judge.

It was an exciting and vibrant and hopeful time. But president...? Not even in our vocabulary.

Now there are and will be children who will grow up thinking that having a black president is a norm.

I have been enriched for these and so many experiences as a clergyperson and a lawyer with legal services programs in low-income communities over 76 years. I looked back on election night and I rejoiced. I have seen history in the United States through a kaleidoscope, not simply in black and white.

My family participated at one level or another for Barack Obama. My wife, her family and I in New York, My oldest daughter, an attorney, in New Jersey. My middle daughter (who came home from Korea where she teaches) in North Carolina. My youngest daughter (where she is completing her masters in journalism) at the University of Oregon. My granddaughter (in her third year at Penn State before heading to study in Argentina) in Pennsylvania. All blue states this election.

The flashes of light from 76 years, but only a portion. Unto the second and third generations.

Tuesday, November 11, 2008

Minutes: The Ongoing Record of Your Nonprofit Organization

This article is prepared to give a board of trustees of nonprofit organizations guidance about the importance of keeping written minutes of meetings. Throughout this article I will refer to the board as "board" or "board of trustees". Some states use the words "board of trustees" and others refer to the "board of directors". Basically they are the same and state law generally dictates what name is used.

What is the Importance of Minutes?

The minutes are the official record of meetings of and the actions by the board of trustees or its committees. They should clearly record important facts and decisions in order to prevent or clarify disputes that may arise at a later date. They serve as the basis for the history of the organization.

What do the Law and the State Statutes Say?

Many if not all states have provisions similar to those below which are a general set of standards about what should be reflected in a nonprofit organization's minutes.

  1. Each corporation shall keep books and records of account and minutes of their proceedings of its members and board and committees. Unless otherwise provided in the bylaws, the books, records and minutes may be kept outside the state in which it is incorporated. The corporation shall make available certain records for inspection at its registered or principal office in the incorporating state. The records usually include the names and addressees of all members, the number, class and series of membership held by each and the dates when they respectively became members of record.
  2. There is a requirement to make records available within a certain time period after demand by a member entitled to inspect the books, minutes and records. The books, minutes or records may be in written form or in any other form capable of being converted into written form within a reasonable time. A corporation is required to convert into written form without charge any records not in that form, upon the written request of any person entitled to inspect them.
  3. State laws may require that upon the written request of any member, the corporation shall mail to that member its balance sheet as at the end of the preceding fiscal year and its statement of income and expenses for that fiscal year.
  4. State laws may provide that members of the corporation, either singly or in number, shall have the right for any proper purpose to examine in person or by agent or attorney, during usual business hours, the minutes and to make copies at the places where the minutes are kept.
  5. State statutes may provide that a member has the right to go to court to compel the production for examination by the member of the books and records of account, minutes and record of members of a corporation.
  6. There is a definite movement among states and within the Federal Government to open the accountability and transparency of not-for-profit organizations to the public. Be certain you are aware of what is a public record for your organization under both the IRS and state law.

What about Unincorporated Associations?

Keeping a record of meetings and decisions made is just as important even if your organization is not incorporated. The important criterion should be whether your organization will have a continued existence and you want to have a record of your meetings, actions and activities. Some unincorporated groups, such as Alcoholics Anonymous, have no minutes or formal meetings. The purpose of the group will dictate what you want or need.

Who Records the Minutes?

The bylaws usually state who is responsible for taking and keeping the minutes. The Secretary does this for most organizations. In rare cases the Vice President or Treasurer may have this task. If the organization has staff, the bylaws can be drafted to allow delegation of taking and preparing the minutes to a staff member. Some organizations tape record meetings to help recall who made certain motions, who abstained and so on. There are some organizations that have a policy to retain such recordings and other organizations are silent and reuse the tape after the minutes are approved.

The person who takes notes at the business meetings uses these notes to prepare minutes, reads or distributes them to the entire board of trustees and dates and signs the minutes after approval by the board of trustees. There is no doubt that early distribution of the minutes to the board by mail, e-mail or web-site posting saves precious time at subsequent meetings.

Where are the Minutes Kept?

Minutes usually are kept in a bound or loose-leaf book or in a file. They may also be kept on a computer file with backup. Most organizations prefer a loose-leaf book or a file with a binder. Keep all minutes in one book (or set of books) or file and never remove them without replacing them. You may want to have the minutes for the year bound at the end of each corporate year.

What should be in the Minutes?

The minute's book should contain at least:

  1. Title page and agenda
  2. Minutes of the meetings of members, board of trustees and its committees with important documents attached to the meeting record to which they pertain. The minutes should be kept in order by date.
  3. Minutes are not a record of all discussion from a meeting. The minutes should reflect the date, location of the meeting, starting and ending times, name of the chairperson, list those in attendance and those who were absent with and without an excused absence and state if there is a quorum. The minutes will reflect all motions that are made whether approved or defeated listing the mover, the person who seconded the motion and the names of any persons asking to be listed who are opposed to the motion or abstaining from the vote.
  4. The material that has been provided to the members and to the board such as budgets and reports, generally mailed in advance, should also be bound in the chronological order with the appropriate minutes.
  5. Some organizations tape record board meetings to assist in writing the minutes. There are differences of opinion whether tapes of meetings should be maintained or recorded over after the board approves the minutes. Some organizations have found that one member may bring a tape recorder to a meeting; the board should be prepared on what it will do if this is from a growing disagreement among members. There is disagreement whether the approved minutes or a tape recording is the official record - check with an attorney promptly if this is an issue.

The file or book should always be treated as an entire unit. Pages should never be removed. When particular pages are needed, the entire file or book should be removed and returned.

Pages should be numbered and initialed by the secretary after the board has approved the minutes. An index by subject, date and a page number can be very helpful particularly if there are frequent meetings during a year. It can be placed at the beginning of the minutes for that year.

What Should Be the Form and Contents of the Minutes?

The minutes of each meeting should contain at least:

  • Name of group, organization or committee.
  • Time (date and hour).
  • Place (address and even the room number).
  • Statement that the meeting was duly called:

    a) by whom;
    b) indicating the kind of meeting (regular meeting, special meeting, etc.);
    c) name of the presiding officer;
    d) name of the secretary of the meeting;
    e) time of the beginning and end of the meeting.
  • Names of those present and those with an excused absence and those not excused.
  • Quorum statistics (how many were present in person and how many by proxy or through telephone or other technological means, if allowed).
  • Reading, correction and adoption of minutes of the previous meeting.
  • Approval of the agenda or consent agenda
  • Record of what occurred at this meeting, including:

    a) important decisions;
    b) resolutions proposed;
    c) resolutions adopted, defeated or tabled (include names of the proposers; the names of the seconders);
    d) record of those for or against a proposal (when requested by a member);
    e) record of who abstained on any vote by name;
    f) reports of the officers, committees and staff;
    g) some organizations have an open forum for staff members or community members to address the board;
    h) other business or ideas.
  • Next meeting date, time, place.
  • Adjournment (time).
  • Signature of the secretary and date following approval of the minutes by the board with each page initialed.

The handwritten meeting notes taken by the secretary should be carefully copied in ink or neatly typed. The minutes should report mainly on what is accomplished or decided at the meeting, not what is said. Minutes should follow the progress of the meeting, but should be arranged so those important items, such as resolutions, votes, etc., can be easily found. Brief summaries of important discussions are often helpful to remind people about why certain decisions are made. Minutes should include exact statements of motions and decisions made.

A recent concept called the “consent agenda” has helped make many board meetings more focused and shorter. I have included material about consent agendas under “Resources”, below.

What About Corrections and Verifications?

Approved minutes of each meeting should end with the signature of the Secretary and the date. After they are read and, if necessary corrected in ink at the next meeting, the corrections should be initialed in the margin by the Secretary. Any such correction ordinarily may be made only with the consent of those present at the meeting, but the trustees also may amend the minutes to include official actions not already recorded at the preceding meeting.

No change or alterations should be made in the minutes after they are signed. If changes in decisions or records are to be made, they should be indicated in the minutes of later meetings - not by rewriting past history. Minutes of the meetings are proof of what occurred at that meeting.

There may be minutes when there is no meeting but the board makes a decision by mail or on a signed ballot. The written votes are to be attached to the minutes indicating the date and the motion voted upon.

What About Executive Sessions?

Some state laws have limits on what topics can be discussed in an executive session or closed meeting of nonprofit organizations. The board should review the state law laws, open meeting laws or sunshine laws, with an attorney. The bylaws of the organization may be appropriate place to list the rules for executive sessions.

An executive session generally is listed on the agenda for the meeting so that any non-board member will be excused from the meeting. The meeting can include the executive director or chief executive officer. Sometimes an attorney for (but not necessarily on) the board will be present to take minutes. Many executive sessions have no minutes since no decisions are made.

The topics for an executive session may include discussions about a lawsuit threatened or pending or actually filed against the organization, the planning for the purchase or leasing of property, the hiring, evaluation and discussion of firing the executive director. Organizational mergers are also topics for an executive session. Decisions about these topics, however, have to take place in an open meeting.

Are minutes open to the public?

Generally the answer is no, but check your state law. I am not certain why a nonprofit organization would want to keep them a secret, however. I was never asked for copies of minutes of meetings except by some new members on the board. Whenever I was granted an interview for the CEO position, I always asked for certain documents before the interview including the minutes of all meetings in the prior twelve months.

I cannot emphasize enough the erosion of privacy of nonprofit organizations. There are many documents that are required by state and federal laws to be made public. The door will continue to widen on into the future. Nonprofit organizations have been given a great privilege to serve our world. Nonprofits belong to the community and should not be hidden by veils of secrecy.

See my article entitled Nonprofit Organizations - Disclosure of Information: What Must We, What Can We Disclose to the Public, Staff, Board and Clients?


Auditors will want to have copies of all minutes and all relevant material to review for the annual audit.

Other Corporate Records

The Secretary of an organization generally has the responsibility of maintaining the corporate records including but not limited to the incorporation papers, the IRS letter recognizing the organization as tax exempt, budgets, audits, Form 990 and its family, all annual reports filed and all correspondence between the organization and the state government and the IRS. The secretary does not own the minutes and other records. The secretary has a duty of loyalty to the organization to maintain the records for the organization and to turn them over to the leadership if the secretary resigns and or cannot maintain the position. .


What should be included in the minutes of a board meeting?

The Nonprofit FAQ: Who Should See Board Minutes?

How Nonprofits Take Action: Getting Board or Member Approval

Can staff take over the board secretary's role?

Executive Sessions: How to Use Them Regularly and Wisely

Sample of a Board of Directors Meeting Agenda

Basic Sample of Board of Directors Meeting Minutes

How to Take Meeting Minutes- Samples of Board of Directors Meeting Minutes

Agenda and Minutes of First Board Meetings

The Consent Agenda: A Tool for Improving Governance and

Thursday, November 6, 2008

Your Nonprofit Library Third Shelf – See What the IRS Demands of Your Tax Exempt Organization After it is Recognized as Tax Exempt

Here are the links for your nonprofit library to all the IRS forms, Publications and other material related to what you have to do after your organization is recognized by the IRS as tax exempt. Make a copy of all the publications and forms or mark them for easy access. Your local IRS office can secure copies for you without cost.

You will find here annual forms that must be filed, how to report contributions, issues over donations of motor vehicles, employment taxes, auctions, political lobbying, postal regulations and other resources. This completes the third shelf.

The single most change for reporting is the new Form 990. You should know this cold. Now!

Annual Filing to the IRS on Forms 990

Independent Sector’s article Revised Form 990, Accountability and Oversight -

Instructions for the New 2008 990s -,,id=186015,00.html

Forms 990 or 990-EZ and Schedules A and B

990-EZ -

Instructions for Schedule A -

Instructions for Form 990 and Form 990-EZ (2007)

e-Filing for Charities and Nonprofits, Form 990 (Return of Organization Exempt from Income Tax), Form 990-EZ (Short Return of Organization Exempt from Income Tax) and Form 990-PF (Return of Private Foundation) -,,id=108211,00.html

E- Postcard Form 990-N New Annual Electronic Filing Requirement for Small Tax Exempt Organizations -,,id=169250,00.html

E-Postcard: Questions and Answers -,,id=173864,00.html

Pension Protection Act of 2006 Revises Exempt Organizations Tax Rules -,,id=161145,00.html

IRS Complaint Process For Tax Exempt Organizations -,,id=178241,00.html

Contributions from Taxpayers to Tax Exempt Organizations

IRS Publication 1771, Charitable Contributions - Substantiation and Disclosure Requirements,,id=96102,00.html and

Publication 526 is information for the taxpayer who makes charitable contributions -

Motor Vehicles and Other Donations to a Tax Exempt Organization

New Publications Focus on Car Donations -,,id=124421,00.html

Form 4302, A Charity’s Guide to Motor Vehicle Donations

Form 4303, A Donor’s Guide to Motor Vehicle Donations

IRS Rules About Making a Motor Vehicle Donation -,,id=131660,00.html

Internal Revenue Bulletin 2007 – 40, Information Reporting by Organizations That Receive Charitable Contributions of Certain Motor Vehicles, Boats, and Airplanes -

Exempt Organizations Abusive Tax Avoidance Transactions -,,id=128722,00.html

IRS Testimony: Charitable Giving Problems and Best Practices -,,id=124186,00.html

Independent Sector’s Comments about car donations -


In addition to any state laws, see the material published by the IRS, Gaming Publication for Tax Exempt Organizations -

Topic 419 - Gambling Income and Expenses

Instructions for Form 990 and 990-EZ (2007)

Employment Taxes and Other Employer Instructions for Tax Exempt Organizations

Links to IRS articles concerning Employment Taxes for Exempt Organizations -,,id=128716,00.html

2008 Form 15, Circular E Employer's Tax Guide (revised annually) -

2008 Form 15–A Employer's Supplemental Tax Guide (revised annually) -

2008 Form 15-B Employer's Supplemental Tax Guide on the employment tax treatment of fringe benefits -

2008 Form 941 Employer’s Quarterly Federal Tax Return 941 Form (Rev. January 2008) -

2008 Instructions for Form 941 -

Publication 78, Cumulative List of Tax Exempt Organizations described in Section 170(c) of the Internal Revenue Code of 1986, a search for charities -,,id=96136,00.html

2008 Publication 509 (changes annually), Tax Calendars for 2008 -

Publication 598 - Form to Declare Unrelated Business Income of a Tax Exempt Organization (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status)-

Disclosure of Unrelated Business Income Tax Returns - The IRS has provided interim guidance (Notice 2007-45) on the requirement for 501(c)(3) organizations to make available for public inspection a copy of their unrelated business income tax (UBIT) returns (Form 990-T). The disclosure procedures are generally the same as those required for disclosure of an organization's Form 990. Some organizations not subject to other public disclosure requirements, such as churches, are required to disclose a Form 990-T; see Publication 598 immediately above -

Intermediate Sanctions, Excise Tax on Excess Benefit Transactions (NOTE: Tax Exempt organizations should be very aware of this Publication and its implications for Exempt status. The purpose of this is to impose sanctions on the influential persons in charities and social welfare organizations who receive excessive economic benefits from the organization, rather than to punish the exempt organization itself.) -,,id=123298,00.html and

Political Activity and Lobbying

IRS Reminds Charities and Churches of Political Activity Ban -,,id=175825,00.html

Political Activities - Particularly important given the election season, the IRS released a revenue ruling (Rev. Rul. 2007-41) regarding what political activities are prohibited for tax-exempt organizations. To illustrate, the revenue ruling describes 21 situations and discusses which are permissible and which are not.

Political Activities Compliance Initiative (2008 Election),,id=181565,00.html

On February 3, 2009 the Chronicle of Philanthropy reported on an IRS vs Church-audit case involving alleged lobbying and candidate support. The article says in part:

Court Rules Against IRS in Church-Audit Case, By Grant Williams

The Internal Revenue Service has suffered another setback in its effort to pursue an audit of a church in Minnesota in a case that has ramifications for the tax agency and churches nationwide.
A U.S. District Court judge in Minneapolis ruled that the Living Word Christian Center, in Brooklyn Park, Minn., does not have to comply with an IRS summons for information because the summons was not authorized by a government official of sufficient rank.

The ruling by Judge Ann D. Montgomery concurs with a decision in December by U.S. Magistrate Judge Jeffrey J. Keyes.

Some tax-law experts have said that the IRS’s defeat could spur challenges to audits by other churches and force the IRS to engage in a lengthy, formal rule-making process to determine who has the authority to order an investigation into a church’s finances.

The IRS began to investigate Living Word in April 2007, following reports that the Rev. Mac Hammond had endorsed U.S. Rep. Michele Bachmann, a Minnesota Republican, from the pulpit—an act that would violate charity tax laws.


Faith leaders and other nonprofit leaders may want to monitor this over the next several years. It could take that long.

IRS Miscellaneous Material

IRS Field Memoranda -,,id=96374,00.html

IRS Published Guidance and Bulletins -,,id=125361,00.html

IRS Revenue Rulings - and

IRS Frequently Asked Questions (FAQ) -,,id=96986,00.html

ABC's for Exempt Organization,,id=187787,00.html

United States Postal Service and Tax Exempt Organizations

United States Postal Service Publication 417, Nonprofit Standard Mail Eligibility; Explains and discusses eligibility for Nonprofit Standard Mail rates, application procedure, and mailing requirements - and

Other Resources

The Center for Non-profits of New Jersey has a booklet about Thinking of Forming a Non-Profit? What to Consider before You Begin:

See the Forming a Nonprofit Organization: A Checklist for incorporating at BoardSource,

Foundation Center Establishing a Nonprofit Organization - What are the characteristics that define an effective Nonprofit Organization? -

American Institute of Certified Public Accountants Understanding the Responsibilities of a Not-For-Profit Board Member [Download]

American Institute of Certified Public Accountants How Fraud Hurts You and Your Organization

American Institute of Certified Public Accountants The AICPA Audit Committee Toolkit: Not-for-Profit Organizations

Six Things Every Board Member Should Know About the NEW 990

Planned Giving Design Center Tax Consideration in Charitable Auctions

Previous Related Blog Articles

Your Nonprofit Library Third Shelf – Getting the U.S. IRS to Recognize Your Nonprofit as Tax Exempt

The Role and Non-Role of Nonprofits and Churches in Elections – Your Nonprofit Library Third Shelf

IRS Makes Filing For Nonprofit Tax Exemption Easier, Sort Of

Effect of IRS Ruling Eliminating Advanced Rulings On Form 1023

IRS Rules on the Phase-in for Nonprofit Organizations to File the New 990 Series Forms

Fiscal Sponsorship or Agent: A Yellow Light

There are other articles here on incorporating a nonprofit. You are invited to add to this list.

Thank you.
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