Hano presentation

Your Voice Matters: How to be a Strong Ambassador for Your Organization

Hawaiʻi Alliance of Nonprofit Organizations HANO promotes: • A stronger nonprofit sector • A supportive public climate • The ability of nonprofits to accomplish their missions

HANO achieves its mission through: • Research and education • Training and technical assistance • Public policy and advocacy • Access to affordable goods and services

This session: Best Practices for Nonprofit Board Members • High level overview of roles, responsibilities and duties of nonprofit board members

Ambassador Role • The multiple ways board members can “Stand for Your Mission,” including advocacy

Opportunity for Q&A

Principles for Good Governance & Ethical Practice • 33 Principles for dialogue between nonprofit boards and staff to strengthen organizational effectiveness and accountability • Four main categories: • Legal Compliance and Public Disclosure • Effective Governance • Strong Financial Oversight • Responsible Fundraising • HANO trainings use the Principles and Practices as a framework to share best practices for the sector • Can be accessed for FREE on the HANO website: www.hanohawaii.org

Types of Nonprofits – 501(c)(3) – Public Charities • Organized for public benefit - educational or charitable purposes.

• Receive special privileges such as tax deduction for donors.

– 501(c)(4) – Social Welfare or Advocacy Organizations are • Organized to have greater latitude in legislative advocacy, lobbying, and political campaign activities.

• They are not eligible for tax deduction for donors.

– 501(c)(6) – Professional and Trade Associations • Organized to promote the business or professional interests of a community, an industry, or a profession.

• They are not eligible for tax deduction for donors.

What Does this Mean for Board Members?

• Tax-exempt organizations exist act to benefit the public, rather than to make money for private shareholders or individuals.

• The board is the LEGAL ENTITY of the nonprofit and is responsible for making sure the organization adheres to legal and ethical standards.

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In this capacity, your job as a board members is to: ✓ Be good stewards of the organization and the public’s trust. ✓ Ensure the organization is operating in accordance with its mission and the purpose for which it was granted taxexemption.

• The Hawaii Nonprofit Corporations Act (HRS 414D) describes a board member’s fiduciary responsibility in relationship to a nonprofit in the state of Hawaii.

Documents That Guide Your Board Nonprofit organizations have documents that provide guidance. They are: • • • •

Articles of Incorporation Bylaws Mission/Purpose Policies

All board members should have access to these key documents and be familiar with their contents.

These Documents are your Friends!

You can learn a lot about your nonprofit by looking at its governing documents.

Things to look for: • • • • • •

Whether there are term limits for board members Whether the organization is a membership organization Whether the organization indemnifies board members Actions that are prohibited by board members Committee structure Officer Duties

Types of Boards: Why it Matters

A Nonprofit Board has Dual Roles • Governance – Act as a whole body, together – Stewardship • Legal and compliance-related issues • Management Support – Act as individual volunteers – Provide expertise, access to resources, act as ambassadors and advocates From Recruit the Board Your Organization Needs, Marla Cornelius, CompassPoint

Three Key Areas of Responsibility

From The Dynamic Board: Lessons from High-Performing Nonprofits, McKinsey & Company, 2003 and What Does Board Service Entail?, BoardSource 2016

The Governance Role Shaping the mission and vision: • The board, together, defines and upholds the organization’s purpose and mission – its reason for being

Engaging actively in strategic decisionmaking and policy decisions: • The board determines policy for the organization

• The board helps set the strategic direction of the organization – translating the mission into a plan

The Governance Role Stewardship: • The board, together, monitors performance and organizational effectiveness, ensuring accountability: ✓

✓

✓

It is aware of and assesses progress on strategic or high-level plans It reflects on and evaluates the organization’s impact on its mission and purpose It oversees financial management and exercises fiduciary care, ensuring legal and ethical integrity

The Governance Role: Stewardship • The board is the legal entity • Individual board members must meet certain standards of conduct • Increasing standards of accountability – The Hawaii Nonprofit Corporations Act, July 2002 (HRS 414D) • Helps define board members standards of conduct – The Sarbanes—Oxley Act of 2002 has some provisions that apply to nonprofits • Must have Whistleblower and Document Retention/ Destruction Policies – Form 990 governance provisions

What Else Should be Considered?

• Conflict of Interest Policy ✓Adopt and follow a Conflict of Interest Policy specific to the needs of the organization and its activities. ✓Clearly outline the process for handling conflicts of interest. ✓Encourage board members to speak up when things don’t seem right.

Standards of Conduct for Board Members

• Duty of Care • Duty of Obedience • Duty of Loyalty

Standards of Conduct for Board Members Duty of Care • Board members should be responsible and prudent in their actions and decision-making for the organization (as compared to someone like them in a similar situation).

• What should you do?

– Attend meetings; come prepared – Stay well informed; read information carefully before making decisions – Vote independently – Ask questions for clarification, and if you disagree, voice your dissent (get it on the record)

Standards of Conduct for Board Members Duty of Obedience

• The board is responsible for making sure the organization complies with federal and state laws as well as its own bylaws and stays true to its mission and purpose.

• What should you do?

– Make sure appropriate taxes and forms are being filed (990’s, etc.)

– Use the mission as a screen to check in on major decisions made about the organization (are they consistent with the mission?)

– Read the governing documents – follow your own rules – Do regular strategic planning to set the direction of the organization and check on continued mission relevance

Standards of Conduct for Board Members Duty of Loyalty • You should be loyal/faithful to the organization by putting its interests above your own personal/ professional interests. You should not gain financially in an inappropriate way from your connection with organization.

• What should you do?

– Have policies and procedures for understanding, discussing, disclosing and resolving potential conflicts of interest – Ensure that there are checks and balances and other safeguards in place (like competitive bids for large purchases)

Managing Risk #1 way to manage risk is through PREVENTION

Have sound Policies and Procedures • Make sure they’re articulated and communicated widely

Be prudent board members • Understand the standards; be familiar with your governing documents

Manage Money • Clarity about how restricted/unrestricted funds can be used; have appropriate checks and balances in place

Follow the Law

Last, in the Governance Role…

Selecting, Evaluating, Developing the CEO: • Establishing compensation and conditions of employment for the CEO • Regularly evaluating that person, working jointly to establish mutually agreed upon expectations for excellence • Supporting professional development for the CEO

The Management Support Role • Board members provide support to the organization as individual volunteers • Board members ensure adequate financial resources to support the organizations plans

• Board members also: – Offer thought partnership to the CEO – Provide expertise and access for organizational needs – Enhance the reputation of the organization in the community – Stand for the organization’s mission

Part I: Fundraising – One Size Does Not Fit All • There are MANY ways that board members can be engaged in fundraising – all are valuable: – ALL board members should make a personal financial commitment, annually and appropriate to their means – ALL board members should be Ambassadors and Advocates for the organization – Some board members may be willing and able to make the “Asks”

• This involves a strategic partnership between staff and board • Together, build the “compelling case” for supporting your organization – In addition to positive impact, consider what would happen if your organization went away? What would be lost?

– This leads us to Part II…

Part II: Stand for Your Mission • Campaign to build awareness about the importance of board advocacy to advance the missions of our organizations • Why? – We do this work because we believe in something – Decisions are happening around us that affect our ability to achieve our missions – You are the voice your mission needs • More at www.standforyourmission.org

Part II: Stand for Your Mission • As board members you have a right and a responsibility to champion your organization’s work and advance the organization’s mission and impact • This is another way you can be an Ambassador – As an advocate, your voice matters!

– You have a unique role to play – “The voice of the unpaid, volunteer board member, acting or speaking out of altruism and passion for a worthy cause, is potentially much more influential than the highest paid lobbyist.”

– Start by reviewing your mission statement and values.

Develop a clear explanation of how advocacy and working on public policy issues connects to the beliefs and goals of your organization and advances your mission

You Can Be a Force For Good • High impact nonprofits both advocate and serve – they become good at both (Forces for Good – Leslie R. Crutchfield and Heather McLeod Grant) – Programs + Advocacy = greater ability to affect systemic change and expand an organization’s impact – Programmatic work helps inform an organization’s policy advocacy and policy advocacy, in turn, can lead to stronger, more effective and better resourced programs • What Can Advocacy Do? – Raise awareness for your organization’s mission – Mobilize your members, volunteers and donors around important causes – Establish and expand government investment in important social problems, like the one’s your organization is addressing – Reform laws and regulations that govern the operation and evaluation of your programs • When we think holistically and mobilize every sector of society – government, business, nonprofits, and the public – we can all be a force for good

What are the Limits?

• You can (and should) help your organization advocate for or against decisions that might help or hurt the mission. This could involve: – Public education or research – Nonpartisan voter registration or education activities (a 501(c)(3) CAN’T endorse or oppose a specific candidate or political party) – Work for or against a piece of legislation (lobbying – within limits)

• Without the 501(h) election: “insubstantial” – Lobbying cannot be a “substantial” part of the organization’s activities • Consider taking the 501(h) election*: – 501(h) provides clearer dollar/percentage guidelines based on lobbying expenditures – Learn more: www.councilofnonprofits.org/taking-the-501h-election *Note: Private foundations, churches, and integrated auxiliaries of churches are not permitted to file the 501(h) election.

Mahalo!

Jennifer Cornish Creed Director of Professional Development

HawaiĘťi Alliance of Nonprofit Organizations 1020 South Beretania Street, 2nd Floor Honolulu, HI 96814 jcreed@hano-hawaii.org www.hano-hawaii.org Ph: 529-0453