Blackbaud is familiar to many nonprofits and universities as one of the world’s leading cloud software companies for fundraising, relationship, and financial management. Now they are in the limelight after a highly publicized ransomware attack in which perpetrators obtained a copy of a subset of data from its Raiser’s Edge and NetCommunity products that track clients’ donors and fundraising activities. Although Blackbaud maintains that no personal information (such as credit card numbers, banking information, or social security numbers) was compromised in the attack, Blackbaud users impacted by the breach have since filed a class-action lawsuit for negligence, breach of contract, and other allegations.
The tainted donor dilemma is nothing new; nonprofits have long wrestled with the ethical and reputational implications of receiving questionable characters’ gifts. But with the explosion of real-time mass communication and social media, stories of wrongdoing are quickly amplified and can quickly sink a person–and everything and everyone with whom they are associated.
To reap the tax-advantaged and protective benefits of conducting business through multiple entities, organizations must take care to respect the formalities of the arrangement. This includes remaining independent and dealing with each other at arm’s length, having separate board meetings, implementing conflict of interest policies, documenting transactions between the entities, and ensuring fair market value payment for any benefits received by affiliates.
We all know that 2020 has been a brutal year for nonprofits. Unfortunately, we are starting to see more nonprofits struggle with sustainability. We have helped many organizations wind-down their operations over the years, and in most cases, there have been one or more core programs that could be salvaged. In many cases, a joint partner allowed the charity to continue its most viable programs in one form or another.
Today, many charities are unable or unwilling to hold board meetings or membership meetings in person due to the pandemic and social distancing requirements and are considering, perhaps for the first time, holding their meetings electronically. In between the complexity of mastering Zoom and figuring out the most flattering lighting, many may not realize that their organization’s articles or bylaws do not permit virtual meetings.
How you can use a gift is generally controlled by donor restrictions written into a “gift instrument”; the instrument can be as simple as an email or a memo line in a check. If there is no restricting language in the gift instrument, the terms of the solicitation (i.e. whatever the charity advertises as the purpose of their solicitation) will govern what you can or cannot do. As to the length of the restriction, any donor restrictions that use the word “endowment” are considered to create a fund of permanent duration unless other language in the gift instrument limits the duration of the fund.
The “unexpected” has increasingly become….well, expected. And failure to adequately plan for anticipated risks can subject directors to scrutiny for breaching their fiduciary duties. Having a business continuity plan is increasingly important; not only for ensuring the continued operation of essential services but also to shield directors from liability for failing to plan for such disruptions. Here’s what you need to know:
The popularity of online fundraising was already on the rise before COVID; Blackbaud reports that online fundraising has grown 17% in the U.S. since 2016. Now COVID lockdowns have shattered fundraising expectations for nonprofits who rely heavily on special events, admissions, and fees for service to fill out their budgets. As a result, nonprofits are being challenged to quickly and effectively pivot fundraising efforts to the online space. Here are some of our best tips for success.
Quite simply, a contract is an agreement between two parties that can be enforced by a court. It involves an offer by one party to provide something of value to another party, followed by the other party’s acceptance of the offer and exchanging money or something else of value in consideration for the services or goods that are to be provided.
Business interruption insurance is most commonly designed to replace lost income in cases where a business premise is physically damaged or where access to the insured’s property is prohibited by closure orders from a civil authority because of damage to property surrounding the insured’s business.
As the economic hardships of the pandemic continue to mount, many are looking for ways to help employees weather the crisis. After 9/11, the Internal Revenue Code was amended to allow employers to make direct payments to employees for “qualified disaster relief” under Section 139. Likewise, employee assistance funds are also commonly used vehicles to provide disaster relief and/or emergency hardship financial support for people affiliated with a particular employer. Both vehicles serve not only to protect one of your business’s most important assets — your people — by getting them back to work, but they also serve to boost morale, build community, and reduce employee turnover in the long-run.
AdHoc said it best: “For everyone that is feeling outraged by the multiple lives that have been lost at the hands of the police, we’d encourage you to channel that anger into action.” For some, that action looks like self-education and awareness, or protesting, or speaking out amongst their friends and community. Another consideration may be giving to one of several organizations working diligently in the fight against systemic racism and violence.
While nonprofits may have a much different endgame in mind than their corporate counterparts, they can glean many benefits by incorporating a more diverse cadre of community members on their board rosters. The fresh perspectives and experiences that new and different members bring to the table result in organizations that are more nimble, effective, and ultimately better equipped to carry out their mission.
Fiduciary duties, as codified in state law, board bylaws, and common practice, are quite simply a set of rules to ensure that boards are run effectively, lawfully, and with the best interests of their mission in mind. Here, we’ll look beyond the legal jargon to distill the legal and ethical responsibilities of board members to oversee the management of and ensure accountability to your nonprofit organization.
Now is the time for thoughtful and decisive action. But how does your board do this when you can’t physically convene? Hope isn’t lost. Here’s what you need to know to hold an emergency board meeting.
We’ll spare you the pandemic intro; we know that nonprofits are acutely feeling the effects of the current financial crisis. And uncertainty about COVID-19 virology and what a “new normal” might look like is frustratingly confounding. But now is not the time for “magical thinking,” according to a panel of experts recently convened by BoardSource. We participated in their webcast to learn more about how nonprofits can best navigate the hard decisions ahead.
Think back to the last time you had to (or at least wanted to) confront your boss about micromanaging your work. Now imagine having ten bosses instead of one. You’ve just stepped into the shoes of your nonprofit’s executive director. While we might all like to cast aside the possibility of an overreaching board member in our organizations, even the most well run nonprofit boards will deal with difficult board members at some point. Boards are full of, well, humans, who have a unique set of personal experiences, emotions, and motivations that influence on their job as a director. Sometimes, that can lead to conflict that is uncomfortable, unproductive, and even contrary to the organization’s best interests.
Delegating activities to committees and other qualified individuals can be helpful for nonprofit boards that are short on the time or expertise needed to carry out certain functions. For example, nonprofit boards typically delegate the day to day management of the organization to officers such as the C.E.O./Executive Director. Boards also delegate specific tasks to committees who can devote more time to particular matters.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) became law. The CARES Act provides $349 billion in benefits for small businesses, including qualifying nonprofit organizations. Specifically, certain nonprofits are eligible for the Paycheck Protection Program and the expanded Economic Impact Disaster Loan program (EIDL). The CARES Act also provides payroll tax relief and expands the charitable deduction to all taxpayers for one year to incentivize charitable giving.
Force majeure has become the word “du jour”; French for “superior force,” it refers to a principle of contract law in which parties to a contract can limit their liability and performance obligations. In the simplest terms, it allows parties to suspend or discontinue the performance of contractual obligations in cases of emergent circumstances beyond the parties’ control. It may also operate to limit contractual liability. But its practical application is nuanced. Here’s what you need to know: