Strategies for Handling Difficult Board Members

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. 

The Pitfalls of Delegation (and how to avoid them)

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.

CARES Act Assistance Programs Available to Nonprofits

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. 

What Your Non-Profit Needs to Know About Force Majeure

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:

What Employers Need to Know about the Families First Coronavirus Response Act by Deanna Rader

On March 18, 2020, the Families First Coronavirus Response Act (the “Act”) was signed into law, and it goes into effect on April 2, 2020. It is the first relief package approved by Congress and requires certain employers to provide employees with emergency paid sick leave and expanded family and medical leave for specified reasons related to COVID-19.

Best Practices for Taking Board Meeting Minutes

Meeting minutes need to record the proceedings in a way that is simple, unambiguous, and accurately reflects the wishes and actions of the Board. A simple rule of thumb is that minutes should contain enough detail to reflect the steps that the Board took and any critical discussions that took place. Well drafted minutes are essential evidence that the directors fulfilled their fiduciary duties. 

The Pros and Cons of Fiscal Sponsorship

Fiscal sponsorship is when a nonprofit organization accepts tax-deductible donations on behalf of another organization that does not have 501(c)(3) status.  Solicitations are made in the name of the fiscal sponsor and therefore permit the sponsored project to rely on the sponsor’s IRS determination letter, solicitation registrations, etc.

How to Claim Parking Tax Refunds

On January 21, 2020, the IRS issued guidance detailing how nonprofits can apply for refunds of the repealed “parking tax.” Recall that in December 2017, the Tax Cuts and Jobs Act imposed an unpopular and widely criticized 21% tax on employee transportation benefit expenses incurred by nonprofits. The transportation tax, or “parking tax” as it came to be known, was retroactively repealed in December of 2019. The retroactive nature of the repeal creates an opportunity for nonprofits that paid the tax to seek refunds. 

What’s New for Nonprofits in 2020

At the close of 2019, Congress passed legislation that has a significant impact on nonprofits. On December 20, 2019, the “Further Consolidated Appropriations Act, 2020,” also known as H.R. 1865, became law. This act includes two provisions that significantly impact nonprofits:

The simplification of the excise tax on net investment income; and
The retroactive repeal of the unrelated business income tax on qualified transportation fringe benefits.

Board Quorums, Non-Profit Strategy, and Technological Innovation

Many non-profit’s use the 51% benchmark for a quorum as a concession that directors will not be able to attend all meetings, but having a majority of board members in attendance for official business ensures a representative cross-section of participation which will not simply reflect the will of a very small clique of directors.  However, organizations that value strong hands-on participation by board members may set a higher quorum requirement to encourage meeting attendance and broader participation. 

Can Your Nonprofit Board Vote by Email?

Technology now offers businesses and boards many advantages, including the ability to meet via teleconference, video conference, or even conduct discussion and voting via electronic communications, such as email.  But while email is commonplace among many organizations for its ease of use, especially for busy and geographically diverse volunteers sitting on nonprofit boards, there are several reasons to think twice before using email for your next important nonprofit board vote. 

How Often Should Your Board Meet?

At a baseline, your board needs to meet with sufficient frequency to adequately carry out your basic fiduciary and governance duties.  This includes hiring the CEO and monitoring the CEO’s performance, creating a vision and direction for the nonprofit, setting goals and monitoring their progress, developing policies and procedures, ensuring sufficient financial resources, and generally safeguarding the organization and its mission.