Posts Tagged ‘Religion’

« Older Entries

Dear Nonprofiteer, There’s trouble in the pulpit: Can I get a witness?

December 20, 2010

Dear Nonprofiteer,

I’m dealing with a non-profit corporation, a church as a matter of fact, that is for all practical purposes a for-profit business masquerading as a non-profit.  The board is not independent—it is made up of the leader, her family and various of her hangers-on.

It would be easy to just walk away from this situation—it is so tempting!  However, taking the easy way out to let the organization fail on its own isn’t necessarily the way to minimize the harm the organization will likely do along the way while doing this masquerade.

Do you know of any tests that can be applied to non-profits, especially churches, that can expose cases where they are for-profits masquerading as non-profits?  If you have any other advice or guidance I would be glad to receive it.

Signed, Clean and Pure

Dear Clean and Pure,

There are all sorts of phony nonprofits.  There are “Astroturf” nonprofits, subsidiaries of for-profit corporations purporting to be grassroots efforts to educate the public on issues of financial import to the corporations.  There are what I’d call “lunch bucket” nonprofits, which exist to accept Congressional earmarks whose benefits actually flow primarily to for-profits.  And then there are flat-out scam nonprofits, which exist to provide tax-shielded income to their founders rather than the public benefit for which the tax shield is a quid pro quo.

The good news is, the IRS discourages out-and-out scams by requiring 501c3 groups to raise one-third of their income from public donations.  Though it seems peculiar on the face of it to identify charities by their income rather than their outflow, the theory seems to be that raising money is such hard work, no one would be willing to do it just for the purpose of stealing.  It’s easier to sell something, anything, and then steal from the earned revenue.  So that’s one of the many reasons that agencies which support themselves entirely by earned revenue are presumptively for-profits (and therefore taxpayers).

State Attorneys General also keep track of the scams, requiring agencies to specify a public or charitable purpose (which is sometimes broader than the IRS’s definition of a nonprofit, sometimes narrower) in order to qualify for tax-favored treatment.  (At the state level, this includes exemption from property and sales taxes, among others.)

There are hard and fast IRS rules about when a presumably public charity needs to be re-classified as a private foundation, but that represents a decision about which kind of nonprofit we’re dealing with, not the “phony nonprofit” scenario you’ve described.  Further details about those decisions and other IRS rules of thumb are available on the very clear and comprehensive IRS Website (no, really!) on the subject.  The decisions and guidelines often refer to  something soporific like “reclassification of exempt organizations,” but they are full of traps for the unwary nonprofit as well as disincentives for the dishonest one.

The bad news is, neither Federal nor state regulations are very often enforced against churches.  The First Amendment protects free exercise of religion and prohibits the government from becoming “excessively entangled” with religious organizations.  “Excessive entanglement,” according to the courts, includes most tax regulation, for if the government has the power to insist on an audit, what faith institution would be safe from government oppression?

This is all very well, except for situations like the one you’ve described.  Occasionally someone will petition the state Attorney General or the IRS to reclassify a “church” as a non-church to capture the kind of self-dealing you’re talking about.  But that would be very occasionally, which is why Jim and Tammy Faye Bakker and their ilk have managed to get so wealthy under cover of the cloth before crashing and burning for more venial (but juicier) sins.

The only thing you can do to keep yourself clean is to walk away.  If you’d like to notify your state’s Attorney General and/or Secretary of State that you believe this agency is not actually a church, you may do so.  But bear in mind that the burden of proof will be on you, and the mere fact that the pastor and her brood and buddies govern without membership input and  seem to be well-paid will not be enough.  Many churches are governed without membership input except in an advisory capacity (consider parishes of the Catholic Church, or affiliated congregations of the Lutheran Church, in which the diocese or the synod rules and the congregation obeys).  And many ministries are a family business: think Billy Graham and his son.

So though the Nonprofiteer wrinkles her nose in distaste at the situation you’re describing, she thinks you have no recourse but to walk away.  If you’re right, and the agency will crash and burn without your intervention, so much the better.  This would demonstrate the wisdom of the Bible saying, “All things come to him who wait.”

Sorry.

Tags:, , , , , , , , , , , , , , , , ,
Posted in Boards of Directors, Charitable Choice/Church-State Separation, Charity scandals, Earned income, Finances, Fundraising, Mission, Nonprofit management, Nonprofits--General, Volunteers/Volunteerism | Leave a Comment »

Of church and state

March 11, 2009

A friend who’s a church administrator mentioned to the Nonprofiteer that the church’s fundraising is up these past few months, and that the administrator’s  job is safer than it’s been in years because of the sudden inflow of support from parishioners.  Historically churches have done better during recessions and depressions, as people direct their giving to places that provide comfort, or perhaps just to places benefiting them rather than other people.

This fact puts a slightly different spin on the President’s otherwise troubling appointment of a minister to lead the White House Office of Faith-Based and Community Service.  If the churches are the only agencies attracting contributions, then it makes sense to lean hard on them to be ones providing desperately-needed social services.  The Nonprofiteer may prefer secular agencies, but what’s important is that people get services from somewhere.

Of course, this makes it all the more important that the President and Attorney General move aggressively to combat any discrimination in service provision or in hiring by these religious organizations.  If they’re going to do Caesar’s work they’d better abide by Caesar’s law.

Interesting that in this recession/depression, the two best places to look for a job seem to be church, and state.  Especially with employment in the secular nonprofit sector projected to decline 20%.

Tags:, , , ,
Posted in Charitable Choice/Church-State Separation, Current Affairs, Finances, Fundraising, Nonprofits--General, Private Philanthropy, Social Service Agencies | 1 Comment »

Straws and nets

February 17, 2009

A note from the World Bible Society advises us of two new affiliates, one dedicated to supplying anti-malarial bednets and one to providing personal water-purifying straws.  But the Nonprofiteer isn’t inclined to support either one because the World Bible Society is in the business of conducting Christian ministry and conversion throughout the world, an activity the Nonprofiteer regards as equal parts wasteful and culturally intrusive.

UNICEF supplies bednets and water purification services without those drawbacks; but perhaps people whose interest is in evangelism wouldn’t be moved to assist poor people without exacting a pound of conversion in return.

Which raises another, larger question: when we see that a huge hunk of individual donations goes to religious organizations, should we celebrate because religious organizations provide social services or mourn because they do so inefficiently, that is, only after siphoning off x per cent of what’s given for the operation of the church?  Is that any worse than a secular nonprofit’s siphoning off operating expenses from its donations?

Or any better?

Regardless: pure water and bednets are a good idea.  If you’d like to supply yours with a side of  Bibles, contact the World Bible Society; otherwise, UNICEF will be happy to direct your money so it provides clean water and malaria-free sleep to the maximum number of people worldwide.

Tags:, , , , , , , ,
Posted in Health care, International, Mission, Nonprofit management, Nonprofits--General, Poverty, Private Philanthropy, Social Service Agencies | 2 Comments »

Lies, damn lies and statistics

January 7, 2009

Nicholas Kristof’s column Bleeding Heart Tightwads purports to reveal that political conservatives are more charitable than political liberals, and that Americans are more charitable than Europeans.  These are familiar neocon morsels, and Kristof’s willingness to swallow and regurgitate them casts doubt on his claim to be a liberal–not to mention his claim to be a journalist who analyzes and thinks before he writes.

Self-described conservatives donate more money to charity than self-described liberals ONLY if “charity” is taken to include donations to churches.  As many more conservatives than liberals are regular churchgoers–and the most regular and charitable of all are the ultra-conservative Church of Jesus Christ of the Latter Days Saints, whose members tithe 10 per cent of their income–any count of charitable contributions which includes church donations will unfairly portray liberals as cheapskates.  The Nonprofiteer doesn’t give a dime to her church because she doesn’t belong to or participate in one, but she’ll measure her actual contributions to charity–social services, education, health care and the arts–against the actual contributions to charity of any registered Republican, any time.

Similarly, Europeans give less money to charity than Americans not because they refuse to put their money where their social-justice mouths are but because they’ve already done so in the fields of health care and education to an extent as yet undreamed of by the United States.  Of course Europeans, Canadians and Japanese give fewer charitable dollars to health care: most medical care is paid for out of their taxes.  Of course they donate less to institutions of higher learning: tuition to those institutions is paid by the state.

The relationship between politics and charity is a complex one, and there are serious people who believe, for instance, that donations to food banks interfere with achieving long-term food security for all Americans because they keep the hunger problem just below the national radar.  (And there are certainly serious people who believe that columnists who try to buy young Asian prostitutes to liberate them are merely increasing the profitability of Asian prostitutes and thus the risk to young Asian girls.)    These difficult policy analyses are not made simpler or likelier of resolution by facile comparisons and repititions of nonsense on the Op-Ed page of the New York Times.

Tags:, , , , , , , , , , , ,
Posted in Advocacy, Coverage of nonprofits, Disease charities, Education, Fundraising, Health care, Higher education, International, Nonprofits--General, Poverty, Private Philanthropy, Social Service Agencies, Women's Issues | 10 Comments »

Dear Nonprofiteer, Can a church board shut out the congregation?

July 10, 2008

Dear Nonprofiteer,

The church to which I belong holds monthly board meetings to conduct church business. As a member of this community I wish to attend if for no other reason than to observe and better understand the issues and challenges that our face our congregation. I am told that our by-laws do not allow my attendance other than at yearly annual meetings which are more of a presentation of selected information than an actual meeting in any sense of the word. I have checked the by-laws and indeed they state in part: “Due to the confidential nature of some agenda items, Board Meetings are not open to the membership.”

While I don’t doubt that there are confidential items that are best handled in private, I feel this is a cop-out as any meeting can be organized so that there are public and private portions. After all we, the congregants, are the owners of the church, not the board which is currently operating as an ivory tower.

When I served on my Condo board we were structured in such a way that the first portion of the meeting was open to homeowners who could come and ask questions/make comments followed by the public portion of the meeting during which time they could stay and observe but not comment. While it sometimes made for long meetings it was an effective tool in allowing our stakeholders access to the board and the transparency proved to be vital.

As a stakeholder in my church, should I not be allowed the same access? Besides, aren’t there legal requirements that board meetings be open to their stakeholders (I think it’s called the Brown Act)?

Signed, Disenfranchised Congregant

Dear Disenfranchised:

You’ve raised two separate questions (at least two)–whether it’s a good idea for Board meetings to be open to church members, and whether it’s required by law or custom. Unfortunately, the answers to these questions point in two different directions.

The Brown Act is a California state statute requiring open meetings by local government bodies, which has served as a model for Open Meetings Acts around the country. Though nonprofits aren’t local governments, in any state the legislature or courts may choose to make applicable the open meetings act to the meetings of charity Boards of Directors; so the Nonprofiteer can’t say definitely that it doesn’t apply in the case you’ve described.

BUT. The First Amendment to the U.S. Constitution, which prohibits establishment of religion and guarantees the free exercise thereof, pretty well prevents most governmental bodies from inquiring closely into the operation of churches. The only way to maintain the separation of church and state is to keep the long arm of the law from reaching past the church door; so, even if some Brown Act-equivalent applied to other nonprofits in your state (such as your condo association), it couldn’t be applied to your church. No sane State Attorney General would even try.

So that means, as a member of the congregation, you’re pretty much on your own. The first place to look for assistance is the place you’ve already looked: the bylaws. Don’t be discouraged just because those bylaws say that Board meetings are closed; instead, see what they say about the bigger question, namely, who “owns” the church? Are members of the Board of Directors elected by the congregation, or is it a self-perpetuating Board? Can changes to the bylaws be made by the Board alone, or must they be approved by the congregation? The answers to these questions will tell you whether congregants are, in fact, members of the governing community, or whether you’re just guests at the feast.

If you [congregants] can fire the Board of Directors and/or amend the bylaws, it seems to follow that you can insist that the Board and the bylaws conform to your desire for open meetings–assuming that your personal position on this subject is also the position of a majority of your fellow-congregants. The Board should respond to reasoned discussion of the subject, but if it doesn’t, you simply vote the bastards out at the next scheduled opportunity.

If, however, the church Board is self-perpetuating, or appointed by a synod of your denomination, then you may be out of luck. In that case the church “belongs” to the people who set it up, and your only choice is to play by their rules or take your ball and go home.

None of this, of course, suggests that it’s actually a good idea for Board meetings to be closed at any kind of nonprofit agency, secular or religious. Sunshine, as the saying goes, is the best disinfectant, and most agency decisions should be suitable for examination in the light of day. There will certainly be confidential issues–especially personnel matters–that shouldn’t be discussed in an open meeting; but that’s a reason to go into occasional Executive Session (which Robert’s Rules of Order allows, whether or not the bylaws mention it), not a reason never to be in open session.

So: good practice is on your side, but the law won’t help you. The bylaws may, by demonstrating your ownership of the institution; but if they don’t, it may well be you don’t want to belong to a club that wouldn’t have you as a governing member.

Tags:, , , , , , , , , ,
Posted in Boards of Directors, Charitable Choice/Church-State Separation, Mission, Nonprofit management, Nonprofits--General, Uncategorized | 8 Comments »

“. . .bless the United States and this honorable Court”

December 11, 2007

The Constitution triumphs.
"Faith-based" social services are a snare and a delusion, an
opportunity for religion to gain a foothold in civic life where it
doesn’t belong, an opportunity for the state to control the church for
the state’s own purpose, an opportunity for union-busting.   

Tags:,
Posted in Charitable Choice/Church-State Separation, Public private partnerships, Relations with funders, Social Service Agencies | Leave a Comment »

God only knows

December 10, 2007

Here’s a problem for the entire nonprofit sector: a pair of preachers refusing to provide information to Senator Grassley’s investigation of expenses claimed on the religious equivalent of the Form 990.  These evangelical ministers apparently share the view of their co-religionist in the White House that obedience to the law is merely one of several options and that responses to Congressional subpoenas are best delivered with the middle finger of the hand. 

What difference does this make to other charity leaders?  Well, the Senator wants to examine the preachers’ expenses to determine whether they and their churches have been violating the Internal Revenue Code’s prohibition of excessive personal gain through tax-exempt work.  While there are some significant limitations on what the government can do to secure cooperation from religious organizations–for good Constitutional reasons which this pair of jackasses is exploiting for its own benefit–no such limitations apply to secular nonprofits.  So here’s an enormous spotlight being shone on our favorite issue, expenses and their abuse; and if the actual abusers manage to dodge into the wings, the light’s going to land on some other agency, certainly less well-protected and probably more sinned-against than sinning. 

Not to mention the obvious fact that we owe our privileged status to legislation–legislation that can be modified at any time, in any way that may seem satisfactory to an enraged and stymied legislative branch.

Isn’t that the way it always goes?  It only takes a few to ruin it for all the rest.

Tags:
Posted in Charitable Choice/Church-State Separation, Charity scandals, Nonprofits--General, Personnel Issues | Leave a Comment »

I’ll Give You Yours If You Give Me Mine

November 6, 2007

You’ll rarely find the Nonprofiteer arguing for reduction in funding for any social program–but here’s an exception.  In yet another pointless effort to secure cooperation from Republicans so the government can accomplish something actual people actually want (partisan, moi?), Democrats offered a swap: they’d agree to fund abstinence-only sex education programs if Republicans would agree to fund one of the Democrats’ pork-barrel boondoggles, namely, health care for working-class children.

Of course, it didn’t work–here’s an idea, guys: if you’re going to sell out, get something back, okay?–but even if it had, it’s an idiotic way to do business.  Instead, when Republicans argue there’s not enough money for the S-CHIP program, respond to their argument: CANCEL abstinence programs, which are a dishonest and ineffective waste of time, and use that money to PAY for S-CHIP.

Of course the outcome would be different if we had a Democratic (that is, non-vetoing) president.  But the Nonprofiteer is afraid the S-CHIP battle is the shape of things to come.  If we don’t make the big push for universal health insurance within the next few years, it’ll be too late: the more Baby Boomers become eligible for Medicare, the less they’ll worry about those of us who don’t have the option of government insurance.  And if you think the health insurance lobby isn’t watching that clock, consider that these are people who look at actuarial tables for a living. 

You don’t fund programs by diverting money to other programs: you fund programs by withdrawing money from other programs.  Let’s start with abstinence.

Tags:, , , , ,
Posted in Advocacy, Current Affairs, Education, Health care, Poverty, Women's Issues | 2 Comments »

Dear Nonprofiteer, Help! We’ve got a flat and no spare!

October 25, 2007

Dear Nonprofiteer,

I’m on the Board of a nonprofit serving homeless teenagers.  We’ve been led by the same person for nearly 20 years–not the founder, but the person who gave shape to the group in ways the founder never had a chance to.  Unfortunately (and I shouldn’t be being flip about this), our leader didn’t give the same priority to her own shape, and she’s just experienced a major heart attack. 

Right now we’ve got the Program Director standing in, but that’s not a permanent solution (is it?).  Nor will it work to just wait until the ED is healthy–though she’s going to be fine, she’s already made it clear she won’t be returning to her 80-hour days leading our shop.

So we need a new ED right now, and I have no idea where to find one or even what to look for.  I always thought when the time finally came to change leaders we’d have plenty of opportunity to contemplate and plan; but the time’s finally come and what we’ve got is plenty of nothin’.  How do we proceed?  Help me, Nonprofiteer; you’re my only hope.  Signed, Panicked on the Personnel Committee

Dear Panicked:

Deep breath.  You don’t need a new ED right now; you need a temp.  And while it’s not a simple task to find one of those either, it’s a lot easier when you know that’s what you’re looking for.

Let’s pause to ascertain how the Nonprofiteer decided you need a temp even though you’ve asked for a new leader.  ‘Cause she’s a consultant, that’s how!–but in this case an even Higher Power is involved, because leadership transitions are one area where the secular nonprofits can really
learn from the churches. 

Many denominations have formalized interim
pastor programs, where a veteran (usually semi-retired) minister comes
in for a year or so to steer the church while the search for a new
pastor goes on.  Why?

  • Because at such a time the church’s need to think about its long-term direction conflicts with its parishioners’ short-term needs for marrying and counseling and burying.  Likewise, the church’s need to think long-term conflicts with its building’s short-term need for paint, its suppliers’ short-term need for payment and so on.
  • Because people need time to resolve their feelings about the departed pastor, and separate the ones that have to do with his/her actual strengths and failings from the congregants’ projections about what they needed and never got from their parents.
  • Because the best leader in the world will have enemies as well as friends, and they’ve been waiting for an opportunity like the leader’s departure to enact their own vision of the church’s future, whether it’s a vision anyone else shares or not.
  • Because the best leader in the world has friends as well as enemies, and their initial reaction to a pastor’s departure will be to seek that person’s clone, whether or not such a creature exists or would be good for the church as currently positioned if s/he did.

All these reasons apply equally to secular nonprofits, whose leaders–especially long-term leaders–similarly stand in loco parentis to their communities and whose Boards of Directors similarly need a bit of time to adjust lest they go loco in replacing the parentum.  Tres Oedipal, n’est-ce pas?

What a shame secular nonprofits have no similar institutionalized
system of access to people who are equipped to operate an agency but uninterested in doing so on a permanent basis.  But as our capitalist friends remind us endlessly, where there’s genuine demand the Invisible Hand will provide a supply; and indeed there seems to be the beginning of a market in serviceable used Executive Directors, driven only on Sundays and good for the next few thousand clients while you shop around for a new hot-rod.

Great, you say; where do I sign up?  It’s still an almost-black market, so you’ll have to do some exploring; but try these suggestions:

  • In a few cities, the Nonprofiteer has heard, the Executive Service
    Corps is training retired executives (albeit from the for-profit
    sector) to perform this function at nonprofits.  This is not ideal–running a nonprofit, as we’ve hashed over endlessly, is not just like running a business but with weird bookkeeping.  On the other hand, ESC training is focused on the unique aspects of nonprofits, and there is something to be said for the senior person who already knows how to handle a personnel crisis, negotiate with an irate unpaid creditor and read a balance sheet.  So ask your local ESC if it’s got a stash of interim EDs lying around. 
  • Touch bases with professional associations of consultants, executive coaches or executive search firms and see whether there’s a listserv on which you can post your desire for a person to come run
    your shop for 6 to 12 months while you do a search.  You may find
    consultants who do this specific work; more likely, you’ll find avenues for putting the word out which will reach retiring EDs who’d be happy
    to take on the task at someone else’s institution.
  • Ask every member of the Board of Directors to ask every
    acquaintance s/he has in the nonprofit sector for the name of someone who’s been an ED and might be willing to serve again for one brief shining moment.  Make sure you’re clear with the Board that neither its members, nor your own founding ED, nor any member of your staff is an eligible candidate for the role.  An interim ED must be if nothing else above the fray: s/he cannot have an ax to grind about the agency’s past or future, nor any favorites among staff or Board.
  • Ask your funders for recommendations.  This is one of those rare cases in which funder advice is likely to be worth something: program officers know more about the comings and goings of nonprofit personnel than anyone else in the community, and may know that Joe Bfstlfk is retiring from the Association to End Misspelling of Cartoon Characters’ Names but could be persuaded to work half- or three-quarters time at your shop for the next six to nine months.

The ideal candidate will be someone who’s just retired from a
similar agency.  How similar?  Well, it doesn’t have to be youth
services–it doesn’t even have to be social services–but it should be
a charity rather than a philanthropy, and a 501(c)(3) rather than a
professional association or advocacy group.  Again, what you’re hiring
is skills in managing this particular kind of institution, so the
wheels can keep rolling while you map out your next turn.

The ideal candidate will also be someone calm and pleasant.  For once, we are utterly uninterested in diamonds in the rough, hidden treasures and other subterranean fortunes.  For once, surface is going to be more important than depth.  You’re not going to be plumbing this person’s depths, or asking him to plumb yours.  You’re going to ask him to wrap some duct tape around the pipe and keep it from leaking til you’re ready to bring in the plumber. 

In selecting a permanent leader it’s often difficult to choose between the dynamic and the
stable–you want both, but if one has to predominate which should it be?  With interims, it’s all about unflappability.  Remember: this person isn’t going to be charming Board recruits and
spearheading a capital campaign and expanding the agency’s network;
this person is going to be paying the bills and refereeing employee
complaints and making sure reports are completed on time.  Moreover, dynamic people often get their juice from big egos, and people with big egos can be persuaded that though they came in on an interim basis the world will in fact end if they don’t stay permanently.  This is the LAST thing you want in an interim ED, and in fact perhaps the FIRST thing you want in such a person is the ability to resist the inevitable invitation to stay on forever.  Stable people are harder to flatter, so hire one. 

Hiring anyone is a lot of work, so you may be thinking, "Why don’t I just cut to the chase and do a full-out executive search"?  Actually, finding an interim ED will be easier than describing the process of searching one out, because your requirements are both clear and minimal.  And even if that weren’t the case, remember that an interim interregnum

  • provides a person to unearth all the dirty little secrets and wipe up all the messes, leaving the next real leader with a clean house. 
  • [even more important] provides a person on whom staff and Board can take out all their fears and resentments at having
    been abandoned by their mommies–that is, at having to become accustomed
    to a new leader. 

No matter how terrific a permanent ED you find, the
successor of a long-term leader has the almost impossible task of
making change while making friends.  An interim ED can make change and
not care about friends–like a consultant, s/he asks nasty questions and forces unpleasant
decisions and then walks away bearing all the group’s troubles on his/her back, a literal scapegoat. 

Finally, to return to your initial question: no, having the Program Director take over is not a permanent solution, or even a temporary solution.  As soon as possible you need to give relief to the Program Director so s/he can go back to providing services.  Some Program Directors want to be EDs and some don’t; some are able to make the transition and many aren’t.  It certainly shouldn’t be something automatic, like [heaven forfend] Dick Cheney’s becoming president.  Especially if the Program Director is a candidate for the permanent job, s/he should be prevented from holding it by default for more than a few weeks.

Tags:, , ,
Posted in Boards of Directors, Nonprofits--General, Personnel Issues | 4 Comments »

Dear Nonprofiteer, What does “gut yom tov” mean?

September 13, 2007

Dear Nonprofiteer,

Why aren’t you publishing today?

Signed, Your adoring public

Dear Adoring,

Today is Rosh Hashanah, the Jewish New Year.  "Gut yom tov" (that would be "happy holiday") to the Nonprofiteer’s co-religionists, and a good year to all.   

Tags:
Posted in Current Affairs | Leave a Comment »

« Older Entries
Follow

Get every new post delivered to your Inbox.

Join 93 other followers