Preparing A Nonprofit Board Welcome Kit and Check-off List:

Some nonprofit and nongovernmental organizations have Board Welcome Kits, material that helps a new board member begin the learning process about the intricacies of the organization.  Such Kits briefly tell the story and the history of the agency (and if the agency is part of a national body that history as well).  The board in most organizations is the leadership for creating and establishing policy, keeping the vision, passion and mission at the forefront.  In most NPOs the board members are expected to give funds and help raise funds for the organization.  The Kit should address the role of the board and list the functions as follows: 

• Establishing and reviewing the budget
• Selecting and receiving the report of the auditor
• Hiring, evaluating, and firing the executive director
• Setting the mission and broad policy for the organization
• Approving all grants and contracts (with recognition some applications have to be filed without board approval but are subject to later review)
• Overseeing accountability to clients/customers, funding sources, and other source-standards
• Participating in strategic and long-range planning
• Establishing priorities
• Evaluating the effectiveness and efficiency of the organization
• Establishing the role of individual board members contributing to the organization and in fund raising
• Understanding the legal aspects of board membership, fiduciary responsibilities, ethics of a nonprofit organization, loyalty, conflict of interest, and confidentiality.

There may be limits to the board's authority and responsibilities that are required by law, by ethics or by contracts.  The Kit can describe briefly how staff handles its activities and outline that client/customer information will not be provided to board members except statistically.  There are instances that individual board members may attempt to pressure staff to break policy to assist a relative or friend; the Kit should address the process for ALL clients/customers to receive assistance.  There can be pressure from funding sources and politicians as well to help someone outside of the intake process.  The Kit should address that, but there should be some conscious agreement how that will be handled as well. 

The Kit should address what insurance the organization has and its sufficiency of coverage, how board members may be reimbursed for agency business travel, which they serve without a stipend (although some organizations pay members). Does the budget include a line item for board training and travel?  There should be an indication of the effect of a board member seeking employment with the organization - resign before applying for a job.  A short section in the Kit about the management of the organization clearly stating the executive director hires, evaluates and fires staff, that there are staff meetings, and that there is supervision and formal evaluation of staff.  The Kit can have the following checklist with some detail:

• Information board members should have (list of board and contact information and staff, organization chart, budgets, etc.)
• The awareness of when a board may legally have closed meetings within the state and what documents are open records to the community and the media
• The good faith responsibilities of the board (attend meetings, receive and read material before the meetings, assure minutes are accurate, issues serving on other community boards, etc.)
• Awareness of organizational operations (incorporation papers, bylaws, human resources, conflict of interest, possible litigation, etc.)
• Knowledge of the human resources of the agency (clear personnel policies, staff reflective of the community diversity, adherence to all written policies, grievance procedure for staff and for clients/customers, board orientation process, etc.)
• Information about the finances (internal controls, regular financial reports and projections, annual audit, property inventory, tax forms filed timely and paid timely, role of board as contributor and as a fund-raiser, etc.)
• Involvement in planning (is there a 3-5 year plan consistent with mission, annual evaluation of program effectiveness and efficiency, etc.) and
• Participation in community relations (dealing with the media – whose responsibilities, clear guidelines on client information, assessment of community needs and priorities, relationships with other nonprofits and government service offices, representative board, etc.).

One discussion that has to occur periodically is the expectation as part of the corporate culture that board members contribute financially annually according to means and passion, the board historically and the staff that the board have to help raise funds and the board’s expectation it is not the staff's responsibility to raise the necessary money.  There is significant literature that citizens are tired of receiving letters to support this or that.  There are also significant studies indicating that for many nonprofits, the board disagrees with staff about the role of fund-raiser.  Without meeting that issue and having it clear and agreed upon as corporate culture, there will be an unhealthy aspect where the rubber meets the road, where the board perceives its role.

The board needs to have a clear understanding who will maintain the records and that the records belong to the organization, not the person.  The board needs to develop an accounting procedure for reconciling accounts regularly and auditing the accounts by members who are not handling the funds.  What paperwork will be needed in order to generate a check?

The board needs to develop written policies, procedures, forms and recordkeeping capability for fiscal accountability.  Who will maintain the corporate files for fiscal accountability?  How will the board know what is going on?   

If you are involved with a nonprofit organization as a staff member, volunteer, board member, or funder, are you sure that the organization is following all legal and contractual obligations?  Do you have written policies and are you following them?  Where do you place your loyalty, values, passion, vision – this nonprofit group or another nonprofit on whose board you serve? What community do you serve and represent?

As a board member or staff member do you know about your rights and responsibilities about advocating for pubic policy affecting your organization, its clients, customers and the community it services?

Are you thinking about incorporating a not-for-profit organization?  Do you or the organization have a business plan, a mission, a vision, goals and measurable objectives, appropriate activities and are they being met?  What roles are expected of the board or staff and are those expectations being met?  When was the last time the organization was given a wellness checkup?  Just as we humans need medical and dental checkups and our motor vehicle needs a checkup, so do nonprofit organizations need a checkup.  Are you part of a sick organization that needs a tune up or are you humming on all cylinders? Do you want to know how well your group is? 

Here is the start of an online library.

The Sarbanes-Oxley Act and Implications for Nonprofit Organizations – 

http://www.independentsector.org/issues/sarbanesoxley.html

Audit Committee Toolkit - http://www.aicpa.org/Audcommctr/toolkitsnpo/homepage.htm

Checklist for Accountability - http://www.independentsector.org/issues/accountability/Checklist/index.html   

Article by Jeffrey S. Gittler, CPA for Guidestar in August 2011, Roles and Responsibilities of Nonprofit Audit Committee Members

http://www2.guidestar.org/rxa/news/articles/2011/nonprofit-audit-committee-roles-and%20responsibilities.aspx?hq_e=el&hq_m=1234478&hq_l=11&hq_v=e088500728

Insurance Questions for Nonprofits – http://www.idealist.org/if/i/en/faq/144-221/50-5

Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations http://www.nonprofitpanel.org/

Evangelical Council for Financial Accountability Standards and Best Practices - http://www.ecfa.org/Content.aspx?PageName=ECFABestPractices

Maryland Nonprofits: Standards for Excellence - An Ethics and Accountability Code for the Nonprofit Sector - http://www.marylandnonprofits.org/html/standards/04_02.asp

Standards for Charity Accountability - http://us.bbb.org/WWWRoot/SitePage.aspx?site=113&id=4dd040fd-08af-4dd2-aaa0-dcd66c1a17fc  

2010 New Year’s Resolution – No New Nonprofits Unless…

http://dongriesmannsnonprofitblog.blogspot.com/2009/12/2010-new-years-resolution-no-new.html

Minutes: The Ongoing Record of Your Nonprofit Organization

http://dongriesmannsnonprofitblog.blogspot.com/search/label/Agenda

One Phase of Nonprofit Organizational Readiness for Grant Funding: Recordkeeping

http://dongriesmannsnonprofitblog.blogspot.com/2008/11/one-phase-of-nonprofit-organizational.html   

The Nonprofit Business Plan - Program Precedes Money. Planning Precedes Program

http://dongriesmannsnonprofitblog.blogspot.com/2008/07/nonprofit-business-plan-program.html

http://www.idealist.org/media/pdf/FAQ/080123NP_Biz_Plan.pdf  

Before you join that board... from the Wall Street Journal, November 28. 2011 

http://online.wsj.com/article/SB10001424052970203716204577018071821606512.html#articleTabs%3Dcomments

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? http://www.nonprofits.org/if/idealist/en/FAQ/QuestionViewer/default?category-id=1&item=1505&sid=40057025-157-xBkAU

Auditors

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. .

RESOURCES

What should be included in the minutes of a board meeting?
http://www.boardsource.org/Knowledge.asp?ID=3.71

The Nonprofit FAQ: Who Should See Board Minutes?
http://www.idealist.org/if/i/en/av/FAQText/25-54

How Nonprofits Take Action: Getting Board or Member Approval
http://www.nolo.com/article.cfm/ObjectID/ADF48429-FBE8-4BF2-80E1A65CA117F22E/catID/ce94a6b3-efb6-4036-8498d5414328fd73/111/262/ART/

Can staff take over the board secretary's role?
http://www.boardsource.org/Knowledge.asp?ID=3.89

Executive Sessions: How to Use Them Regularly and Wisely
http://www.boardsource.org/dl.asp?document_id=555

Sample of a Board of Directors Meeting Agenda
http://www.managementhelp.org/boards/agenda.htm

Basic Sample of Board of Directors Meeting Minutes
http://www.managementhelp.org/boards/minutes.htm

How to Take Meeting Minutes- Samples of Board of Directors Meeting Minutes
http://non-profit-governance.suite101.com/article.cfm/how_to_take_meeting_minutes

Agenda and Minutes of First Board Meetings
http://dongriesmannsnonprofitblog.blogspot.com/2008/07/agenda-and-minutes-of-first-board.html

The Consent Agenda: A Tool for Improving Governance
http://www.boardsource.org/dl.asp?document_id=484 and
http://www.boardsource.org/Knowledge.asp?ID=3.70

Agenda and Minutes of First Board Meetings

Your State law may provide for the minimum agenda for the first meeting of the organization. The Board members named in the Articles/Certificate of Incorporation are to receive at least five (5) day's notice of the meeting by mail to each trustee. The notice must state the time and place of the meeting. State statutes may provide that the Board shall adopt bylaws, elect officers, provide for initial members if there are to be members and transact any other business that may come before the first meeting.

At some point earlier than the statutory meeting described above the organizers should create an agenda for the first formal meeting of the Incorporating Board of Trustees. The agenda and the meeting should include approval of the name of the organization, reserving the name, approval of the expenditure for reserving the name, filing of the Articles/Certificate of Incorporation, the signing of the Articles/Certificate and the payment of fees to the State.

This initial meeting may also approve the filing for the Federal Employer Identification Number (FEIN or EIN). There is no charge for the FEIN and may be secured over the Internet or be telephone. An FEIN is similar to a Social Security number, but for businesses. You will need an FEIN to file the IRS Form 1023. The FEIN is an important part of the nonprofit’s identity so do not use it everywhere, such as on a web site. Applications for the FEIN may be filed by telephone, FAX, online or by regular mail.

https://sa2.www4.irs.gov/modiein/individual/index.jsp

Each item on the agenda should be the subject of a motion to approve, a vote and recorded in the minutes.

The Board may approve the opening of a bank account in the name of the organization subject to receipt of the FEIN and approval of the Articles/Certificate of Incorporation by the State. The motion to open an account should name the bank and branch address, the names of the two or more persons who are approved to sign checks and deposit funds. All checks should require at least two signatures. No check should be signed that is blank. The Board will manage the affairs of the corporation. The Board can also approve the filing of the business entity public record filing form with the State.

When the agenda also includes the adoption of the Bylaws, the Board may have the election of officers, begin the process of naming members if there are to be members and transact other business that may be raised. Thereafter, the corporation is governed by the Bylaws. Requirements for the meeting of the Board and members, if any, are to be spelled out in the Bylaws, subject to the Articles/Certificate of Incorporation and state and federal law.

At one of the early meetings or a subsequent meeting the Board must approve the filing of Internal Revenue Service Forms 1023. The name of the person approved to sign the forms should be named in the motion. The motion should include the payment of the appropriate fee to be sent with this material to the IRS.

After the Board has received the determination from the IRS, the Board may have to approve the filing of a State form relative to avoiding certain State taxes on corporate purchases. The motion should include approval for a person to sign the form.

If the corporation intends to hire employees, desires to hold raffles, or wants to receive the State petroleum benefit (if there is one), other forms should be approved by the Board with approval who may sign.

This practice of approving forms or fund raising programs or grant applications and the person responsible for signing at the same time should appear in the minutes. This practice will protect the organization. All motions should be reflected in the minutes of the meetings.

Board meetings can be exciting and focused. A lot depends on the leadership, knowledge and experience of the chairperson. The setup of the room where meetings are conducted can also affect the meeting. For ideas about meetings and room setup, see

http://www.llrx.com/columns/guide59.htm

There are many ways a board can agree to conduct its meetings. Many continue to refer to Robert's Rules of Order. I would suggest not requiring Robert's Rules of Order in the Articles/Certificate or the bylaws. The bylaws may reflect that Robert's Rules of Order shall provide guidance to the board in the conduct of business.

Parliamentary procedure allows groups to make fair and effective decisions. Someone must propose each item of business as a suggestion that the group do something. This is called a motion. It is usually presented, "I move that we blah, blah, blah…" There then must be a second or the motion dies. Following a second there is discussion of the motion or a motion to table the original motion and then a vote by those in favor, those opposed and those who abstain.

An issue confronting nonprofit groups is using Robert's Rules of Order. There are some sites that are useful to parliamentary procedure. I have found several web sites that I think are helpful to understanding Robert's Rules of Order. Although there is a push to sell the book on each, there are useful "cheat sheets" and discussions as well on the sites.

http://www.robertsrules.com/ - The official Robert's Rules site

http://www.rulesonline.com/ - An adaptation and helpful outline to Robert's

http://www.jimslaughter.com/robertsrules.htm - An excellent site where a "cheat sheet" is available

http://pzen.northwest.net/index.php?main_page=page_7&zenid=m2b86017o1odli9tnbq0s1ntg6 - A web site from a consultant with free material on writing minutes, counting a quorum and other matters

http://www.newkent.net/rules.html - Trout's Top Ten Rules of Order

Decisions are made by voting on each motion after discussion. The rules for voting guarantee that the will of the majority will be adopted and the rights of the minority will be protected. The rules should explain in advance the method of the voting such as simply saying "yes", "no" or "I abstain" or calling for a role call vote or a show of hands

Remember, the purpose of rules for a meeting is to get the work done in a timely and legal manner and make everyone feel good about the meeting.

For a sample copy of minutes for a board meeting see -

http://www.managementhelp.org/boards/minutes.htm