KSAE Association & Meetings Vol. 5 / Summer 2021 by petersonpublications

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CONTENTS VOL. 5 • SUMMER 2021

6 6

ON LOCATION: GEARY COUNTY

24 30 SOLUTIONS

Geary County Conference Attendees Back to Nature By Cecilia Harris, writer, KSAE Magazine

Incorporating Video for Association Communication By Liz Stevens, writer, KSAE Magazine

10 HUMAN RESOURCES

34 TECHNOLOGY

Creating Safe Workspaces By Kristina Dietrick, PHR, SHRM-CP, president, HR Partners

UBIT and Virtual Tradeshows: What Associations Need to Know By Jeff Tenenbaum, managing partner, Tenenbaum Law Group PLLC

14 FOCUS Five Places to Be on the Lookout for Fraud By Christina Solomon, CPA/CVV, CFE, CGMA and Michael J. Devereux II, CPA, CMP, Mueller Prost

20 MEMBER SPOTLIGHT: CAPITOL STRATEGIES

DEPARTMENTS 4 22 26 38

Letter from the Director Industry News Association News Calendar / Ad Index

Capitol Strategies Works to Improve the State of Kansas By Jewlissa Frickey, writer, KSAE Magazine

24 NONPROFIT Encouraging and Recognizing Nonprofit Volunteers By Cecilia Harris, writer, KSAE Magazine

28 BOARD GOVERNANCE Board Role in Asset Protection By Bob Harris, CAE

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KSAE Magazine • Summer 2021 |

LETTER FROM THE DIRECTOR

Christy Classi, CAE Executive Director KSAE

t KSAE’s May Lunch and Learn event, speaker Trey Burton spoke about liminal experiences, and it made an impact. As he explained, the term “liminal experience” originally was used by anthropologists to describe a cultural rite of passage: young members of a tribe were tested to their limits, both physically and mentally to prepare them for the transition to adulthood. For all of us, as both individuals and through the organizations we represent, the pandemic served as just such an experience. Who and what we are today looks very different than it did one year ago. Now, as stability and optimism return, we are emerging stronger and wiser than before, with a shared experience and newly gained knowledge. KSAE will continue to be the place for association leaders and industry partners to connect, share and thrive, and we cannot wait to share in all our members’ triumphs and successes this summer. The Kansas Society of Association Executives values our association members and our industry partners, and we want to work together to make the comeback better than the setback. To help, the KSAE board of directors is offering support to members who may be financially struggling because of the COVID-19 pandemic, yet still want to maintain the professional connections and benefits of being a KSAE member. Please contact us for more details on this offer to stay in touch with KSAE and our membership.

Kansas Society of Association Executives (KSAE) PO Box 4790 Topeka, KS 66604 785.234.0155 • www.ksaenet.org KSAE Board of Directors President Sean Miller, Capitol Strategies President-Elect Amy Dubach, CAE, Midwest Political Science Association Secretary-Treasurer Niki Sadler, Kansas Dental Association Immediate Past President Ron Seeber, Kansas Grain & Feed Association/Kansas Agribusiness Retailers Association Chad Austin, Kansas Hospital Association Shahira Stafford, Stafford Public Affairs, LLC Brad Parker, MBA, CAE, Braden Heidner Lowe & Associates Carrie Riordan, Riordan & Associates Alex Orel, Kansas Bankers Association Hannah Yeubanks, Kansas Automobile Dealers Association Becky Schwartz, Fuel True: Independent Energy and Convenience

Published by:

Have a great summer. Rest easy knowing that no matter what challenges you are facing, with KSAE you have a strong community of peers for support and guidance along the way. Sincerely,

Christy Classi, CAE Executive Director Kansas Society of Association Executives

Peterson Publications, Inc. 2150 SW Westport Dr., Suite 101 Topeka, KS 66614 Phone 785.271.5801 www.petersonpublications.com Editor in Chief Jeff Peterson

Advertising/Sales Vicki Peterson

Managing Editor Dianna Brodine

Copy Editor Jewlissa Frickey

Art Director Becky Arensdorf

Circulation Manager Brenda Schell

Graphic Designer Kelly Adams

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ON LOCATION GEARY COUNTY

GEARY COUNTY BRINGS CONFERENCE ATTENDEES BACK TO NATURE

By Cecilia Harris, writer, KSAE Magazine

eing forced to work at home and delay family vacations due to the pandemic has brought about changes in the way many professionals view conferences. Meeting industry sources say attendees now salute planners who arrange gatherings in appealing destinations filled with authentic, local experiences. Junction City, located near Fort Riley, easily meets this objective with a number of interesting sites and activities near two very different conference centers offering very different experiences. Tagged “The Natural Choice,” the Milford Lake Conference Center at Acorns Resort sits on the shoreline of Milford Lake with views of Farnum Creek cove from the windows, according to owner Mike Harris.

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“The view from the patio is breathtaking,” Harris says, adding that on the other side of the building a private, shady outdoor deck overlooks a wooded area. The Conference Center offers 4,000 square feet of meeting space that seats 275 people and is able to be configured into three separate breakout rooms and a 12-chair board room. Larger cabins on the resort also may accommodate smaller meetings. Overnight lodging for 136 people includes three sizes of cabins, lodge rooms, yurts and camper rentals; also available are 61 camper sites for “guests who may want to bring their home on wheels with them,” Harris adds. On-site catering is offered through The Cove Bar and Grill, a popular restaurant open year-round. “Most of our guests www.ksaenet.org

Conference attendees retreat to the attached Courtyard by Marriott Hotel, which features six suites and 113 spacious guest rooms featuring a comfortable sitting area and large work desk. Amenities include a business library, fitness center, indoor pool, lobby lounge/bar and Bistro. “The Bistro offers specialty beverages made with Starbucks® coffee to help you get a jump start on the day,” she says, adding it also offers breakfast, dinner and cocktail options. The Center has previously worked with Hildebrand Farms, Milford Nature Center, Rathert Stadium and Fort Riley to accomplish the mission of providing diverse leisure activities and authentic local experiences. At Hildebrand farms, visitors walk through the milk barn, the free-stall barn, the calf barn and the dairy processing plant. Each tour ends with a sample of milk and an ice cream cone, according to owner Kathy Hildebrand. Scheduled at least a week in advance, tours are limited to 20 people and last an hour, with additional time needed for visiting the farm’s store.

compliment us on our catered food, especially the in-house smoked meats, such as brisket and pulled pork,” he says. Resort activities include a 3.1-mile nature trail, a threeseason pool, picnic shelters, sandy beaches, fishing and camping. “We can provide access to fishing guides for guided trips, kayaking and canoeing trips, rental pontoon boats, yoga, scavenger hunts, guided trail walks, bicycling, corn hole tournaments and a variety of music options at The Cove,” Harris says. Elk viewing tours and controlled shooting area hunts will become available in September. The resort also provides a 14-passenger bus for transportation to nearby locations. Conveniently located off Interstate 70, the Geary County Convention Center features 16,000 square feet of “elegantly designed” meeting space that can be configured to meet the needs of any size group from 10 to 800 people, according to Michele Stimatze, director of the Geary County Convention and Visitors Bureau. “The Center offers a full in-house catering service ready to exceed your culinary and service needs,” Stimatze says, adding there also is a Bar-B-Q and/or picnic area on the grounds. www.ksaenet.org

Visitors to Milford Nature Center view live wildlife including snakes, amphibians, turtles, lizards and prairie dogs. Dioramas depict an aquatic system with over 300 lifelike fish, turtles, snakes and insects, and a terrestrial system of prairie, marsh and woods wildlife. Outdoors, there’s a bobcat display, bird-watching wall, nature trails, a backyard habitat with educational sites explaining how to attract birds, butterflies and other animals, and a seasonal butterfly house where visitors learn the species’s pollination rules.

The biggest attraction is the outdoor bird of prey exhibit featuring the Bald Eagle, Golden Eagle, hawks, falcons, vultures and owls. Manager Pat Silovsky says the biggest attraction is the outdoor bird of prey exhibit featuring the Bald Eagle, Golden Eagle, hawks, falcons, vultures and owls. Birds of prey also are the most popular program requested by groups. “Convention groups can schedule a naturalist program with us where we do an hour-long program, like the birds of prey, during which you can see them up close rather than in the wild,” she says. The Center accommodates up to 100 people, who are divided into smaller groups for tours led by staff members. continued on page 8

KSAE Magazine • Summer 2021 |

ON LOCATION GEARY COUNTY continued from page 7

One of the most historic baseball venues in Kansas, Rathert Stadium opened in 1937 as part of President Franklin D. Roosevelt’s New Deal. Built of limestone quarried from the region, the design of the circular-shaped stadium facing northeast keeps fans cooler with open grillwork for air circulation. The Junction City Brigade, Junction City Blue Jays and the Junction City American Legion Flames baseball teams all play inside the restored architectural landmark.

Depending on the time of year, visitors to Milford Lake are able to see pelicans.

Fort Riley, home of the 1st Infantry Division, offers driving and walking tours and also houses several museums of historical importance. The U.S. Cavalry and 1st Infantry Division Museums will reopen in

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2022 with redesigned display spaces discussing the history and traditions of the U.S. Cavalry from 1775 to 1950 as well as the history of Fort Riley from its establishment to present day. Custer House, one of two surviving sets of quarters from Fort Riley’s early years, was constructed in 1855 of native limestone and remains largely unchanged from its original design. It is believed General and Mrs. Custer occupied the sister-set of quarters while stationed here in 1866. Filled with period furniture from 1870 through the 1890s, it depicts military life on the Western frontier and the living conditions of a typical military family. The First Territorial Capitol of Kansas, built in the town of Pawnee, also stands on Fort Riley and is a state historic site. The fight for freedom for all people in the Kansas Territory and the struggle to determine whether Kansas would enter the Union as a free or slave state began when the first territorial legislature convened here in July of 1855. Every visitor to Fort Riley must follow orders and obtain a temporary Fort Riley Access Badge or Pass; information on ways to attain the passes prior to conference dates can be found on the fort’s website. F

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HUMAN RESOURCES

CREATING SAFE WORKSPACES By Kristina Dietrick, PHR, SHRM-CP, president, HR Partners

OVID-19 disrupted workforces across the nation, forcing both employers and employees to adapt to new technologies, processes, changing legislation and nontraditional work settings and schedules. Business owners now face the challenges of employees returning to work and adjusting business operations to the “new normal.” The “new normal” includes long-term influences of COVID-19 on the post-pandemic workforce, such as:

1. Updated Administration of Paid Time Off

During the pandemic, multiple legislative actions required employers to provide paid time off for employees due to COVID-19 related needs. While this has been reduced to a voluntary basis at the federal level, some states have elected to continue illness-related paid time off under various statutory schemes. While Kansas has yet to enact any such legislation, many of our clients are reviewing leave policies to ensure they are flexible to the current needs of the workforce. Additionally, employers are tightening the requirements to access such leave by requiring medical notes for certain amounts of sick leave to minimize abuse.

2. Remote Work Alternatives/ Hybrid Schedules

Remote work schedules can be customized to business

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While some small businesses cannot absorb higher wages, flexible schedules and remote work are options to incentivize potential employees to apply. needs. Post-pandemic remote work may not be a good fit for all businesses or employees, but for some, it allows employers to keep operations running and remain flexible when “life happens.” Businesses that are set up for remote work due to the pandemic now can use the existing processes to allow employees to work from home in instances such as when a child is sick and must stay home from school or when an employee needs to be home while the plumber fixes the leak under their sink. This allows business to maintain productivity while supporting work/life balance.

3. Recruitment

Many clients are finding it difficult to bring employees back to the workplace post-pandemic. A combination of factors, including extended unemployment benefits, employee continued on page 12

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burn out, decisions to switch career paths, an increase in retirements and the lack of competitive wages and benefits have led to difficulty in recruitment. In a market economy, the supply and demand of labor is forcing certain industries to re-evaluate their compensation and benefits packages. As a result, we have seen an increase in requests for compensation surveys in order for employers to recruit at a competitive level. While some small businesses cannot absorb higher wages, flexible schedules and remote work are options to incentivize potential employees to apply.

4. Continued Legislative Impacts

Pandemic-related legislation still is affecting the postpandemic workforce. Under the American Rescue Plan Act of 2021, employers are required to provide COBRA premium assistance to Assistance Eligible Individuals (and their qualified beneficiaries) who are eligible for COBRA as a result of an involuntary termination of employment or reduction in hours. The premium assistance applies to periods of health coverage on or after April 1, 2021, through Sept. 30, 2021. An employer or plan to whom COBRA premiums are payable is entitled to a tax credit for the amount of the premium assistance.

5. Communication Methods

Communication methods post-pandemic should be a hybrid of electronic and physical meetings, focusing on quality over quantity. While face-to-face meetings can never be replaced, they are best used for weekly team meetings, major projects and significant decisions. Less important issues or problems may be more efficiently solved via email, phone call or video conference. F HR Partners, a woman-owned, regional human resources consulting firm in Topeka, Kansas, specializes in human resources outsourcing and consulting services, audits, assessments, compliance, training and organizational development, as well as executive recruitment. Dietrick HR Partners’ professional team has extensive knowledge and experience to develop customized solutions to fit an organization’s needs and culture. For more information, call 785.233.7860, 800.635.2310 or visit www.hrpartnersks.com.

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FOCUS

FIVE PLACES TO BE ON THE LOOKOUT FOR FRAUD By Christina Solomon, CPA/CVV, CFE, CGMA and Michael J. Devereux II, CPA, CMP, Mueller Prost

raud takes on many forms, resulting in substantial financial losses and exposing your company to undue risk. Fraud can be perpetrated by internal sources – those employees, managers and even owners who are implicitly trusted, yet this group historically has caused losses exceeding a median loss of $240,000 per instance of fraud because they are able to circumvent or override existing controls that are in place. Your business also can be targeted by external sources, which may include your suppliers, customers or contractors looking primarily to overcharge for materials or services that may not have been provided, were provided but improperly billed or do not otherwise meet specifications. Furthermore, your employees also may be unwittingly put your business’s confidential information and reputation at risk, by falling victim to attacks by cyber criminals. Because of the varied ways, reasons and opportunities for fraud, a good defense is your best strategy to deter and identify fraud within your company. In this article, we explore five areas to be on the lookout for fraud in your plastics company.

The work floor

Your employees can commit fraud in many ways, but the greatest opportunity often exists with timekeeping matters and the theft of physical and intangible assets.

Timekeeping fraud occurs when an employee mischaracterizes the hours they worked or took as paid leave. Strong internal controls regarding clocking in/out, and supervisory review and approval of leave requests are important to control any potential misuse or abuse by your employees. Brainstorming ways employees can work together to cover for each other, or collude, will help identify weakness in the process that should be strengthened. Automating processes so that key tasks can increase the effectiveness and efficiency of controls that are implemented, along with periodic testing, can ensure that those controls are operating as intended. Your organization’s physical assets are at risk of theft or misuse by your employees. Commonly, one or more employees may identify that certain goods can be taken without notice and sold to third parties on various social media marketplaces. While physical controls, such as surveillance cameras, are an important element to deter and

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detect, strong inventory controls are even better. There are two main types of inventory controls. The first is to control the physical movement and access to inventoriable assets, which commonly includes designated locations by inventory type, barcoding and restricted physical access to products with high-dollar value, fungible or at greatest risk of theft. The other type of inventory controls relates to performing cycle counts, periodic inventories and using data analytics to identify unusual trends in the purchasing, usage or scrap of inventoriable goods. Theft and use of intangible assets can occur just as easily. This can range from the theft and sale of the company’s proprietary information to the use of the company’s design software licenses to perform services “on the side.” Internal controls can be developed that can deter and mitigate the use of these assets.

The accounting office

The accounting office is a hot spot for fraud in any industry, and fraud risks are compounded when one or two trusted employees are responsible for sensitive jobs. The danger is even greater when these same employees have administrative access and password control to manipulate the accounting system, as well as control over financial reports. Over 14% of fraud committed by employees occurs within the accounting department, with a median loss of over $200,000 per instance. Fraud perpetrated by your company’s accounting department can be very complicated and well-concealed, but most often it is hiding in plain sight. The following are common fraud schemes affecting the manufacturing industry and simple strategies to help you identify and deter them. Ghost Employees. An employee with the control to create a new employee in the payroll system, record and submit payroll, and make changes to the payroll master file easily can create a false employee, increase amounts or fail to terminate an employee. Direct deposit or mailing information easily can be updated. While it is a best practice to segregate the duties outlined above, it may not be practical to do so. If this is the case, having another person reconcile the payroll registers between pay periods and/or reviewed against a simple list of verified employees would be advised. In continued on page 16

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FOCUS continued from page 15

addition, “change” reports, which summarize the additions/ deletions/changes for the pay period, can be a quick and efficient internal control – just be certain that the designated reviewer can run the report on his/her own or that the report is generated by the payroll provider, if applicable, and sent directly by them to the reviewer. AP Ghost Vendors. Like ghost employee schemes, ghost vendors are a common problem. An employee who has control over both the creation of a vendor in the payables file and the payment of invoices can create a vendor or edit an existing one, receive fake invoices for common goods or services, approve the invoice and pay the bill. To the extent duties cannot be segregated easily, regular scrutiny of your vendor master list – including the frequency and amount paid during the period(s) under review – is a strong mitigating control. In addition, regular maintenance of your vendor file will decrease fraud risks by ensuring that unused vendors are deactivated, active vendors are not duplicative and that active vendors have full and complete contact information. Other Disbursement Schemes. An employee who has access to check stock or online banking tools often has the access to commit fraud against your company if the need, opportunity

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and rationalization for the misconduct exist. Such misconduct may include making checks payable to cash or him/herself directly, the payment of personal expenses using online banking tools or misrepresenting the payee or amount on a “blank” check they may present for signature. As mentioned earlier, these schemes are not cleverly concealed and, as are result, often are detected with a careful review of the monthly bank statement, including the check and deposit images.

The sales office

Your sales staff, given their role and relationship with your organizations’s customers, puts your organization at risk of fraud stemming from that relationship. These frauds commonly are referred to as corruption schemes and may include kickbacks or conflicts of interest. While close relationships between your sales staff and your customers and clients are important, recognizing red flags that may indicate an unusually close relationship, such as taking on responsibilities outside of their normal job duties or excess possessiveness regarding the contract, are important to deter misconduct. Increased fraud risks exist from commission schemes and employee expense reports schemes, both typical types of fraud committed by a sales team. Commission schemes often inflate the sales amount, quantity or the rate of commission. The schemes also may include collusion with customers to purchase product and return it after the commission is computed or involve sales made to a fictitious company. Aside from behavior red flags that may be present, a company may identify anomalies with its accounts receivables and related discounts/write-offs, customer information irregularities or complaints, and inconsistencies with the employee’s performance and compensation when compared over time or to their peers. An employee expense reimbursement scheme involves the employee making an improper claim for the reimbursement of expenses. The expenses could be fictitious, personal in nature, overstated or submitted more than once. A good employee reimbursement system should include prior approval for large expenditures and enforcement of submission of receipts as proof of purchase. Generally, expense reimbursement forms are treated as an administrative task and rarely are the forms – and the required receipts – reviewed with the appropriate care to identify mistakes, much less deceit. Using automated expense reporting tools or detailed spreadsheet-based templates can allow for advanced data analysis to help your company identify anomalies and inconsistencies by employees when compared over time or to their peers.

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The supply chain

Fraud risks within your supply chain are present and put your organization at unnecessary financial and reputational risk.

Billing Fraud. Billing fraud results when a supplier submits multiple invoices for work that was only incurred once or issues false or inflated invoices. Strong controls over the purchasing cycle – including vendor selection, inventory tracking and diligent three-way matching controls to ensure that discrepancies between purchase orders, packing slips and invoices are identified, investigated and sufficiently resolved before payment are due – strengthen your organization’s internal controls and mitigates the risk of fraud loss from billing discrepancies, whether incidental or intentional. Misrepresentation of Goods. Fraud involving the misrepresentation of goods occurs when a supplier knowingly misconstrues the products sold or offered. For example, a supplier may knowingly deliver products that fail to meet the contract specifications. This misrepresentation, even if not fraudulent, puts your company at risk for reputational harm and can cause the loss of established or new business, customers and relationships. Ensuring that your contracts have a “right to audit” clause can be an effective tool, if enforced, to identify misrepresentation issues, billing discrepancies or other contractual breeches. Corruption. The employees responsible for the purchasing of goods used in business processes can collude with vendors to exploit your company. This can take the form of bribes and kickbacks and can come in various forms (e.g. gifts, money, favors, etc.). As a result, your organization may overpay for goods, accept inferior quality products, create a conflict-of-interest or simply create a supply chain that is not properly diversified. Identifying behavioral red flags and having strong purchasing controls, including periodic request from bids, coupled with data analytics will help you identify and mitigate risks associated with supply chain corruption schemes.

Your employee’s inbox

Email has become an essential means of doing business; however, the expectations it sets regarding the immediacy of responses allows cybercriminals to exploit your employees, ultimately leading to the comprise of your company’s most sensitive data. This data can be held for ransom; to gain access to financial and personally identifiable information of your employees, vendors customers necessary to commit identity theft fraud; or can be used to gain illegal access to your company’s propriety processes or intellectual property. The stakes are high, with significant economic losses and exposing your organization to debilitating reputational risks.

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Cybercriminals use different ways to breach your systems and social engineering techniques to cause your employees to take inappropriate actions. Phishing and other email compromise schemes today are masterful – they look legitimate, are personalized and are carefully worded to create a sense of legitimacy by the sender and create a sense of urgency by the recipient. It has been estimated that up to 90% of successful breaches involve a phishing scheme. Attacks of this nature can result in a myriad of fraud, a few of which are listed below: • Wire transfers to cyber criminals posing as a supplier or key executive. • Installation of key loggers by clicking on an embedded link in an email. These loggers are used to gain access to passwords, account numbers or systems. • The purchase of gift cards and submission of the account information via email. The best defense strategy to this type of fraud is first acknowledging that it can happen to your company. Your company is not “too small” to be targeted – you have information that is valuable, and your firewalls and information technology controls are not likely to prevent all attacks. Increasing employee training on cyber fraud, particularly phishing schemes, is just as important as instituting password requirements and keeping firewalls and email filters up to date. This training also should include strong practices regarding verifying information before taking action. This could include developing protocols for secondary authorization of wire transfers and verifying instructions with the sender by using contact information in your records, not those listed in the body of the email. In addition, protecting your company with cyber insurance, developing a proactive incident response plan and testing to ensure information technology controls are in place and functioning as intended are excellent strategies to mitigate your risks and exposure from cyber fraud. F Michael J. Devereux II, CPA, CMP, is a partner and director of Manufacturing, Distribution & Plastics Industry Services for Mueller Prost. Devereux’s primary focus is on tax incentives and succession planning. He regularly speaks at manufacturing conferences around the country on tax issues. For more information, visit www.muellerprost.com.

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MEMBER SPOTLIGHT CAPITOL STRATEGIES

CAPITOL STRATEGIES WORKS TO IMPROVE THE STATE OF KANSAS By Jewlissa Frickey, writer, KSAE Magazine

“O

ur longstanding relationships with legislators of both parties, and from across all regions of Kansas, allows us to provide the level of engagement needed by an association to be successful,” said Capitol Strategies partner Sean Miller. “We work with our clients to identify realistic goals and develop and implement the strategy, timeline and resource allocation necessary to achieve their objectives.” Capitol Strategies was founded in 1976 and is one of the longest operating government affairs firms working in the Kansas Capitol. Started Capitol Strategies was founded in 1976, making it one of the longest by John C. Peterson, a former Kansas State operating government affairs firms at the Statehouse. Front row, from representative, he works alongside Bill Brady left: John C. Peterson, founder and chief executive; and Bill Brady, and Sean Miller, as well as other associates. partner. Back row, from left: Leigh Keck; Sean Miller, partner; and Since the firm’s creation, it has grown to be Michelle Butler. Not pictured is Tom Cox. one of the most respected and successful can be difficult for many associations due to staff size and the government relations entities in the state of Kansas. crowded legislative schedule.” Government affairs firms, such as Capitol Strategies, bring However, Miller cautioned that an organization such as his resources to the Capitol that an association may not be able requires support from association membership. “It’s equally to provide. “Associations in Kansas have very different important for an association to understand that a good lobby needs, so understanding those needs and working to bolster team is only a piece of the puzzle,” he said. “Having a their existing framework is key,” Miller said. “Some of our membership that is active and regularly communicating with clients have very active governmental relations staff and their local legislators and the state administration often is the others have no presence at all in the Statehouse.” tipping point for achieving success.” While smaller associations may outsource their legislative Capitol Strategies works with an association’s leadership to advocacy needs, larger associations may use government develop priorities and work to engage its general membership affairs firms to provide extra resources and help bridge the throughout the legislative process. When developing an gaps inherent in a compressed legislative schedule. organization’s priorities, Miller notes that it is important to also educate the leadership teams on the opportunities Professionals within a government affairs firm work with and challenges that will be present during the legislative legislators and other state leaders daily, so their personal session. Once an organization recognizes the importance relationships and legislative experience can help an association of engagement and other challenges, a full strategy can be achieve the goals most beneficial to their membership. developed that includes traditional media, social media and personal outreach aimed at key members of the Legislature. “Our staff size, and their diversity of experiences from all Miller explained, “The timing of these actions can be levels and types of governmental involvement, allows us to absolutely critical to the ultimate success of the initiative.” have a thorough understanding of the process, the people and thus the opportunities that may present themselves at any However, with every industry comes its challenges. As the given time,” Miller explained. “We are able to cover all the decision makers in the Kansas Capitol change every two to committee work and other activities during the session. This

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four years, there is a constant need to build and strengthen those new relationships – something Capitol Strategies prides itself in doing. In addition to the everchanging nature of lobbying, the increased presence of internet and social media must be managed as well to adjust the way information, or misinformation, flows.

Capitol Strategies’ goal is to ensure that policy makers have the information necessary to make educated decisions that ultimately best serve their districts and the state of Kansas as a whole. By facilitating communication between lawmaker, their constituents, and the associations and members serving their communities, the firm does just that.

The role social media plays in legislation provides a level of uniqueness that was unseen before. With representatives and senators being in near constant communication with their constituents on platforms such as Facebook and Twitter, the social media applications allow for ample opportunities for messaging purposes – but could also provide a flood of bad information. This rise in social media has only strengthened polarization in politics, which is why Capitol Strategies gives prominent attention to its own online presence in order to effectively communicate with and educate both policy makers and the firm’s clients, during the Kansas Legislature session and in the interim. Miller spoke on the work performed during the interim period by stating, “For a lobbyist who works with associations, this is the perfect time to set up site visits to member facilities so that legislators can see for themselves the opportunities and challenges that your members have daily. Laying this framework throughout the year really helps an association achieve success in the future.”

“The legislative process can move so fast that it’s important to engage on your issues immediately,” said Miller. “If you aren’t able to take advantage of an opportunity when it arises, or stop an action that would have negative consequences, it simply may be impossible to reverse that action tomorrow. Having additional eyes and ears in the state Capitol, whether it’s Capitol Strategies or another governmental affairs firm, can be very beneficial to an association and its members.” Moving forward, Capitol Strategies hopes to embrace newly developing technology and to continue utilizing the tools necessary to achieve the goals of its clients. “We’ll all be working to thread the needle by seeking to actively engage our clients and members across the state through web platforms while still having the critical policy discussions necessary for the long-term success of every organization.” F

Amidst a global pandemic, individuals in all areas of life were challenged to reevaluate their day-to-day approaches. Capitol Strategies was no exception as the firm adjusted to social distancing and virtual meetings as opposed to the typical form of client contact that its team was used to. “For an industry built on face-to-face conversations, social distancing and the lack of in-person meetings turned our business world upside down,” Miller said. “We had to rapidly become proficient with the various online meeting platforms and reformat new ways (and re-embrace old ways) of delivering information.” In addition, the Capitol Strategies staff was physically divided in the 2021 legislative session in order to ensure their work could continue in case of a quarantine situation. However, despite the hardships COVID-19 brought, Capitol Strategies found a silver lining in the potential for outreach. “The ability for an association to have a state leader, or a national expert, present virtually at board meetings provided previously unrealized statewide engagement and education,” said Miller. “It provided an opportunity for their members to participate in the political process in a way they never envisioned pre-pandemic. The Kansas political process always has been a relatively open process, and with every committee meeting and floor session now being broadcast on the internet this is truer than ever.” www.ksaenet.org

KSAE Magazine • Summer 2021 |

INDUSTRY NEWS PMCA Changes Name, Becomes Fuel True

For over 100 years, there has been a statewide organization representing independent energy marketers, convenience store owners and the professionals in the field throughout Kansas. That organization has a new name. The Petroleum Marketers and Convenience Store Association now is known as Fuel True – Independent Energy and Convenience. “Our new brand, Fuel True, is forward focused, and will allow our team of professionals to better serve our members, and more cohesively offer our membership benefits for another century,” said Thomas Palace, executive director. For more information, visit www.fueltrue.org.

Photo courtesy of Home2 Suites by Hilton

Home2 Suites by Hilton Reaches Downtown Wichita

Home2 Suites by Hilton is one of the fastest growing brands in Hilton’s history and, as of January 2021, has opened doors in the historic Delano district of downtown Wichita. The new hotel has excellent visibility and is well positioned for easy access to shopping, entertainment and several eateries. The four-story, pet-friendly, 95-room hotel features a range of value, tech-focused and eco-conscious amenities. For more information on a personal or business stay, visit www.wichitadowntown.home2suitesbyhilton.com.

Hilton Garden Inn Opens in Hays

Hilton Garden Inn & Convention Center opened November of 2020 in Hays, Kansas. This new addition is located near Fort Hays State University, the Sternberg Museum and the Fort Hays Historic Site. Guests of the hotel will find several enhanced food and drink options, including onsite dining options such as the Garden Grille and Bar. Additionally, guests will have access to The Shop, a 24-hour, grab-and-go retail space. For more information, visit www.hgi.com.

Manhattan Conference Center Completes Expansion

Manhattan Convention and Visitors Bureau has announced the completion of the Manhattan Conference Center expansion at Hilton Garden Inn. Construction began in March 2020 and was completed by December 2020. The conference center grew by 11,800 sq. ft., for a total of 34,000 sq. ft. of space, which easily accommodates a variety of seating arrangements and a

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large pre-convene area. “We are thrilled to welcome meeting planners and convention goers back to Manhattan with this expansion to the Manhattan Conference Center,” said Karen Hibbard, Manhattan CVB vice president and director. For more information, visit manhattancvb.org/meetings.

NEW FACES

Keating

Berkley

Dixon

Dains

Kansas Health Care Association Announces Staff Changes

Teresa Keating has joined the Kansas Health Care Association as the special programs coordinator. She brings 20 years of association experience to her new role, with eight years of that being health care related. Polly Berkley was promoted to vice president of operations and education earlier this year. She has been with the organization since January of 2014. For more information, visit www.khca.org.

Visit Topeka Names Dixon as President

Visit Topeka and Greater Topeka Partnership announced Sean Dixon as the next Visit Topeka president. Dixon previously served as marketing director for the Springfield, Missouri Convention and Visitors Bureau. “Throughout this hiring process, I’ve fallen in love with Topeka and the spirit of cooperation demonstrated by the leadership of the Partnership, the City of Topeka, the Topeka Lodging Association and others,” Dixon said. For more information on Visit Topeka, visit www.topekapartnership.com.

Emporia CVB Names Dains as Director

The Emporia Chamber and Visitors Bureau announced Lelan Dains as the new director of the organization. “I am elated to have the opportunity to serve in the role as director of the Convention and Visitors Bureau,” said Dains. “I look forward to working with the team in finding new and creative ways to enhance the Emporia experience for our residents and out of town guests.” For more information, visit www.visitemporia.com. F www.ksaenet.org

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NONPROFIT

ENCOURAGING AND RECOGNIZING NONPROFIT VOLUNTEERS By Cecilia Harris, writer, KSAE Magazine

ecause of her love for history, Susie volunteered at a historical society where she spent several hours of her free time every week looking through the archives for misplaced items that she then returned to the correct location. Months later, when she proudly announced to the director she finally had everything in order and had found the missing item he had been searching for over the past year, he mumbled a quick thank you without looking up. She left to find another nonprofit where her organizational skills would be both useful and appreciated. It wasn’t that Susie desired to be the guest of honor at a fancy banquet – she only yearned for the director to acknowledge in a more meaningful way the important work she accomplished for the organization. According to Michigan State University (MSU) Extension, human beings need to be recognized for their efforts for their own self-esteem, motivation and selfassessment. Unfortunately, however, the recognition of these essential workers who give freely of their time and skills to nonprofits often is overlooked, given little thought or hastily planned at the last minute. In The Ultimate Volunteer Appreciation Guide, author Tatiana Morand states that no matter the role volunteers play in an organization, finding regular and creative ways to frequently say thank you goes a long way toward building loyalty, retaining a dedicated volunteer base and helping

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those who support your mission feel great about their efforts. In addition, former volunteers who feel appreciated are more likely to return to assist with special events or projects. Volunteer management software company Galaxy Digital agrees, stating on its website that recognizing volunteers for their time and efforts is essential for better volunteer engagement and retention: “Volunteers are more likely to become lifelong supporters of your cause when they feel appreciated. They look to your organization for a sense of community, kinship and an opportunity to feel good while doing good. Showing appreciation and recognition goes a long way toward supporting a welcoming environment where volunteers regularly enjoy taking part.” Galaxy Digital defines volunteer appreciation as showing your volunteers you care about them, while volunteer recognition is about acknowledging and celebrating their achievements and impact with your organization. Simply talking to volunteers and getting to know them cannot be underestimated; people feel valued when someone gives them attention. The Minnesota Association for Volunteer Administration suggests trying “little things” to show appreciation, such as handshakes, kind words, smiles, handwritten thank-you notes, gift cards, photos, small tokens, snacks at meetings and asking about their families. www.ksaenet.org

Other simple ways to make a volunteer feel valued and cared about include getting name badges for your office volunteers, taking them out for a coffee break, highlighting the volunteer on your webpage or in your newsletter, sending a card during a stressful time for the volunteer, putting their birthday on the monthly email or bulletin board, asking about their family, telling the person when others speak highly of him and telling others, such as a boss or family member, how much you appreciate their contributions to the program. Asking a volunteer to take on a leadership role, speak to a reporter about their experience with the program, provide a testimonial to new volunteers or emcee at an event are other options. After a successful event, consider posting to a social media account a note of appreciation to all that made your event a success, and posting a photo on Instagram tagging the individuals who volunteered. Volunteer recognition shows appreciation, reinforces efforts and recognizes accomplishments, according to MSU Extension. A comprehensive recognition plan acknowledges participation, effort, progress toward goals and a job well done. Recognition is important because it creates a personal link between a specific volunteer and the impact your nonprofit is making in the community, according to volunteerhub.com. The first step in thanking volunteers is understanding how important they are toward your nonprofit achieving its desired outcome. After reflecting on the value a volunteer brings to your organization, discuss your ideas with your board or other staff members who may have their own suggestions and ways to engage your volunteers. Then, throughout the year find opportunities to personally offer meaningful appreciation, from the informal thank you plate of treats or verbal acknowledgement to a formal event. When offering verbal appreciation to recognize a volunteer’s accomplishment, it is important to communicate effectively through a face-to-face discussion focusing on the volunteer’s efforts. Morand advises recognizing the person, not the work, by saying “you did a great job,” which emphasizes the individual’s contribution, instead of saying “this is a great job,” which focuses on the end result. Your comments also should be timely, occurring shortly after an achievement has been reached because the value of your gratitude diminishes as time passes. Volunteers may desire different forms of recognition, just as they have different motivations for volunteering at your association. The Minnesota Association for Volunteer Administration (MAVA) advises recognizing volunteers based on their generation.

Volunteers may desire different forms of recognition, just as they have different motivations for volunteering at your association. years of service or honored with a plaque, pin, certificate or useful item. They may enjoy the annual volunteer banquet, a recognition program at a site where they volunteer or being recognized for achieving certain results. Having a photo with the guest of honor, being named volunteer of the year or having the chance to hand out all of the awards at the annual banquet also can be perfect recognition for the volunteer who is motivated by influence. Baby Boomers, born between 1946 and 1964, seek recognition that emphasizes their leadership, expertise, hard work or commitment to the program; they also appreciate notes of thanks for sharing their time and like to be highlighted on websites and in newsletters. Generation X, born between 1965 and 1980, want to be recognized for their creativity or contributions through notes, cards or e-mails of appreciation, and inclusion of their family in one-on-one settings. Millennials, born after 1981, prefer recognition of their collaborative efforts through feedback, a verbal “thank you” and reference letters, according to MAVA. Recognition, however, should be appropriate to the achievement. Morand says a paper certificate and a private thank you message are suitable for a few months of service, but a public dinner, speech with specific details on what was accomplished and the difference made, and an engraved plaque are fitting for a 10-year volunteer. However, consistency is key; Morand warns that honoring volunteers at a recognition dinner one year sets up expectations among other volunteers, so she suggests making sure the standards of recognition you establish can be maintained by the organization for years to come. When volunteer efforts go above and beyond year after year, obviously special recognition is warranted. Nominating your volunteer for the Presidential Service Award or other state, county or local volunteer recognitions is one way to honor your most outstanding volunteers and recognize the impact they make on your organization. F

The Silent Generation, born between 1925 and 1945, are motivated by public and formal recognition events for www.ksaenet.org

KSAE Magazine • Summer 2021 |

ASSOCIATION NEWS KSAE has a broad slate of upcoming programming for member education.

Me, Myself & My Camera: Implementing Video Production Solo

Monday, 8/2/2021 - 12:30 PM CT In today’s social media world, it is well known that video is king. In the association world, however, factors like small staff, limited resources, and lack of time and expertise may seem to hinder the ability to produce the video. Often, communicators will avoid utilizing video because they feel unqualified, undertrained, or unequipped to create video content. But, with a camera, tripod, and a few video tricks, implementing a video strategy is easier than you’d think. In this session, participants will learn how Nicole operates as a one-person video crew, see the equipment she uses, and learn tricks to make the editing process less daunting. 1 Total Credit: 1 CAE

Adding Value with Valuable Learning: Leveraging Adult Learning Theory

Wednesday, 8/25/2021 - 12:30 PM CT Associations are known for their ability to provide bestin-class training opportunities for members. This session

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KSAE 2021 Conference and Expo Oct. 21-22 Prairie Band Casino & Resort KSAE is switching things up! Mark your calendars now, and look for details and registration opening soon. will explore how to engage learners in a virtual or hybrid environment leveraging adult learning theory. Members boost their career prospects through learning and certification, so ensuring relevant, engaging education that improves the learner’s experience is critical. 1 Total Credit: 1 CAE

Creative Improv for Member Retention and Board Development

Wednesday, 9/8/2021 - 12:30 PM CT Non-Profit Board of Directors should rethink how they come up with new ideas for their organizations. During brainstorming sessions, we criticize while we are trying to create, which is the wrong approach. Phrases like “we can do that,” “we have tried that before, and it didn’t work,” or “we don’t have the resources to pull that off” kill the creative process. The cure is to break the brainstorming process into two parts: divergent thinking and convergent thinking. Divergent thinking is the accumulation of all ideas without dialogue or critique—quantity over quality. Convergent thinking is assessing the ideas to see which one could be viable. This breaking apart the traditional brainstorming method is accomplished by adopting an improviser’s mindset. In improv, we say, “bad ideas are bridges to good ideas and no ideas lead to nothing. This session will show you how to use the divergent thinking process to get the maximum number of ideas and learn how this same process works during convergent thinking. 1 Total Credit: 1 CAE

Advertising, OnBoarding and Retention: The Key to Lowering Your Turnover

Wednesday, 9/22/2021 - 12:30 PM CT This webinar will discuss the constantly changing advertising avenues such as social media and advertising boards. Hiring has gotten tougher and finding the right applicant is almost impossible. Learn how to sell your business to applicants and join an open discussion on how your industry retains employees. 1 Total Credit: 1 CAE F

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www.ksaenet.org

BOARD GOVERNANCE

BOARD ROLE IN ASSET PROTECTION By Bob Harris, CAE

n a meeting of the components of a national association, odds are good you will hear the whispers, “Did you know about the embezzlement at XYZ association?” The amounts are sometimes staggering, exceeding $1 million. Equally surprising is how the board was oblivious to the losses occurring over multiple years. The responsibility is shared between the board of directors and professional staff. As partners and fiduciaries on behalf of the membership, they are charged with protecting resources. When asked about the budget, directors may stutter. Or say, “Staff watch the budget for us.” I asked a treasurer about the size of the organization’s budget and she responded, “I haven’t looked at it recently, I don’t really know.” (It was a million-dollar association.) Some directors hone in on the smaller line items (“What’s this $75 expense?”). Many don’t know the size of the annual budget, the largest line items and the value of assets. These three numbers would be the start for protecting resources.

Diversions

Reporting a loss of funds is a requirement of the IRS on Form 990. The agency describes a diversion as any unauthorized conversion or use of assets other than for the organization’s authorized purposes, including but not limited to embezzlement or theft. Form 990 requires reporting diversions by officers, directors, trustees, employees, volunteers, independent contractors or any other person. Most are attributed to theft or embezzlement, sometimes leading to the loss of tens of millions of dollars to a single organization. A Washington Post article in 2008 highlighted the “thefts, scams and phantom purchases” in nonprofits. The analysis identified more than 1,000 nonprofit organizations reporting a “significant diversion” of assets on Form 990. The article reports the IRS said that 285 diversions totaling $170 million had been disclosed in one year alone.

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Board Oversight

There are many tools and processes available for a board to protect resources. Form 990. This is the annual information report to the IRS required of nearly all exempt organizations. Averaging 25 pages, board members can glean a lot about income, expenses, assets and programs. Give it a good read. It is expected that the governing body reviews it before submission. Audit. An audit generally is defined as a review of the organization’s financial situation by an independent outside professional. Look for the organization’s policy on the frequency and type of audit required. If it does not exist, inquire why not. When an audit is completed and presented to the board, review it carefully and ask questions of the auditor. Budget Approval. The budget is a projection of income and expenses for the year, approved by the board. The elected treasurer has a duty to keep the board informed of discrepancies in the budget. Directors should be articulate about aspects such as the size of the budget and the major income and expense items. The budget is a year-round tool of the board. Financial Reports. Directors should receive a financial report at every board meeting. Review it carefully, and be ready to ask questions about trends and performance. If www.ksaenet.org

the report is missing, ask why and get assurance it will be provided shortly after the meeting. Let the minutes reflect that the board received, reviewed and accepted the report.

dashboards designed as pie charts and graphs comparing dues to non-dues income, savings to budget, dues renewals and membership growth.

Oversight. Directors must accept that they have responsibility for financial management and asset oversight. Don’t assume that a committee, treasurer or staff are taking care of matters.

Internal Controls. Practices should be in place that protect assets. From secured checkbooks and separation of duties to limiting petty cash, be sure safeguards exist.

Policies. There should be numerous policies regarding finances. For example, check signatories, credit card use and requirement of receipts for reimbursement. Be sure the policies are in place and followed.

Finance Committee. Spread the responsibility from the sole treasurer to a broader group of directors serving on a committee. Having several eyes on the books and financial matters is advantageous.

Access to a CPA. If directors need more information to better understand financial matters, ask a CPA to address the board. Topics might include IRS requirements, policy safeguards, audit options and Generally Accepted Accounting Principles.

Avoid stories of diversions and embezzlement with a board that understands the responsibility and tools for financial oversight. F

Big Picture. Directors sometimes micromanage by inquiring about the smallest line items. The attention should be on the big picture.

Bob Harris, CAE, provides free governance tips and templates at www.nonprofitcenter.com.

Dashboards. Graphics reduce the time spent on listening or reading reports. Improve financial understanding with

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KSAE Magazine • Summer 2021 |

SOLUTIONS

INCORPORATING VIDEO FOR ASSOCIATION COMMUNICATION By Liz Stevens, contributing writer, KSAE Magazine

t’s time to get ready for the association’s close-up. Some nonprofits may have dragged their feet about using video as a communication tool, but nowadays everyone is more comfortable in front of the camera. There are Zoom meetings, classroom webinars, remote court appearances, virtual happy hours and video birthday parties. Videos really are an effective way to communicate. They make it easier to grab attention and build an audience, and savvy nonprofits are learning about the value of “lights, camera, action.” In an Association Management Center (AMC) blog1, Carly Mangus, assistant editor and resident video editor, Creative Media Services at AMC, explained the value of video for associations. “Video is the most effective way to reach your audience,” Mangus wrote, “as it establishes trust, communicates your brand and delivers information more effectively than any other medium. It shows the personality of your organization and makes the audience feel more connected, not only to the cause or mission, but to the people making it all happen.” Mangus noted that in a world where attention spans are measured in mere seconds, internet video can keep watchers’ attention for nearly three minutes. “Visual content is more likely to be engaged with for longer periods of time and shared on social media,” Mangus wrote, “and video content is more likely to rank your organization on the first page of a Google Search than standard text.” So, video defies the attention span threshold, boosts one’s Google Search placement and often is shared.

A creative-minded association can use videos for many types of communication. A video can contain a message from the board, an overview of the association and its mission or a Q&A session fielded by the association team. A video could describe a new campaign, lay out the success of a just-finished push or feature the benefactors of an association’s well-met goal. In “How Your Association Can Use Video to Engage Members,”2 Brianna Lawson wrote that associations can use videos to present their professional education offerings. Lawson also stressed that videos can be a new way to convey content or to target a hard-to-reach new group for membership. “Video can attract new members, especially younger ones,” Lawson wrote. “Featuring videos of members from your association talking about what they are excited about that relates to the industry allows younger individuals to more easily identify with your association – because they share the same interests as your current members.” And Lawson pointed out that a video might be a terrific way to simultaneously build brand awareness for the association and spotlight important advertisers and sponsors. There are plenty of avenues for sharing association videos. One of the easiest ways is to post videos on the association’s website and to ask staff and volunteers to share videos on their social media platforms. Videos can be included as links in emails and email newsletters. Popular social media sites on which to share videos include Facebook, YouTube, Twitter and Instagram. continued on page 32

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SOLUTIONS continued from page 30

The strategy for preparing and launching a single video or a video campaign will be familiar to associations because strategizing for video includes some of the same decisions as strategizing for recruiting or fundraising. Communications managers should ponder these four big questions: What is the goal, what is the topic, what are the key points to keep in mind and how will success be measured?

What is the goal?

In “Tips for Creating a Nonprofit Video Marketing Strategy,”3 Mina Poyraz discusses fundraising as a goal for using video, and also brings up other end results. “Think about your goal and what you expect for your video marketing outcome,” Poyraz wrote. “Video is often perceived as a tool to create awareness, but it can do more than just that for nonprofits. Think about using video to increase your fundraising.” Poyraz noted that Google calls online video the best online method for driving donations, with more than 50% of donors making a donation after viewing video on a favorite nonprofit cause. Poyraz also pointed to video as an effective way to direct traffic back to a nonprofit’s website and to increase its follower base. In a Wild Apricot blog, “The Ultimate Nonprofit Video Marketing Strategy + 5 of the Best Nonprofit Videos We’ve Seen,”4 Tatiana Morand urged nonprofits to answer one preeminent question before diving into video production: What am I hoping to achieve with this video? To explore this key point in more depth, Morand suggested addressing three additional questions: who is the audience for the video, how many videos will be produced and who is available to help with this project? “Writing down these answers and keeping them top of mind will help you stay focused on the kind of content you’re going to create (and ensures you won’t get in over your head),” wrote Morand.

What is the topic?

Once an association has a result in mind for creating a video, it is time to consider which type of topic will best tell the nonprofit’s story and elicit the desired response from viewers. Morand’s article touched on this question and offered suggestions. A video might tell the story of an association’s raison d’ etre – its underlying cause – or it might illustrate the professional or social need that prompted the creation of the association. A video could showcase an association’s team members or testimonials from the people who benefitted from the association’s hard work. A video might announce an event and invite attendees, or it might be a thank you offered to the association’s most generous donors.

What are the key elements?

Some of the elements that make for great theater or movies carry through to making a great video. A compelling film or

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Communications managers should ponder these four big questions: What is the goal, what is the topic, what are the key points to keep in mind and how will success be measured? play or nonprofit video relies on storytelling skill, a strong story, passion (as in a deep sense of purpose or gravitas), relatable and memorable characters, and content that evokes the senses and touches the audience’s emotions. An association’s video will go a step further than entertainment since it will aim to reach and impact its own community and extend a simple call-to-action. Mobile Cause described the value of these ingredients in “Smartphones Make It Easy for Nonprofits To Create Professional Looking Fundraising Videos.”5 “When you highlight your organization’s core messaging in a real, authentic way, you give viewers the opportunity – and inspiration – to get involved with your nonprofit on an emotional level and encourage them to volunteer time and resources to your cause. Key Components of the Best Fundraising Videos: • Evoke the senses when telling your story with images and stories that give viewers a reason to believe in your cause. • Relatability is key, so tap into what resonates by creating a familiar persona that incorporates your organization’s message and aspirations. • Cast powerful characters, passionate people from your org or benefiting from your mission to create empathy to help viewers relate to and get them behind your cause. • Know your audience. Target your story for a direct and specific purpose – if you don’t know who you’re talking to, the right people won’t be listening. • Passion is paramount, so keep your purpose in mind and add in some depth to match the tone and feel of your organization. • Humility helps everyone – connect your audience to your organization in a sincere way to create trust in your mission and get people involved.”

How will success be measured?

Theaters that stage plays and movie houses that show films measure success by box office receipts. Associations don’t have a box office, per se, but they can measure the success of video projects by the number of donations or the total amount of donations they receive as a result of sharing a video. www.ksaenet.org

Other ways to measure success include the number of video views, the total amount of time (hours and minutes) all viewers spent watching a video, the “likes” or YouTube subscribers earned, or the number of new members that join the association after watching a video. The measure of success, of course, will be tied directly to the overall goal of the video or video campaign. Examining the success (or lack thereof) for a video will help an association decide whether to do more of the same or change things up for better results. To get the creative juices flowing, here are a few ideas from backtoyoumarketing.com6, Carly Mangus’s blog and Tatiana Morand’s blog for video content that might be just the thing to script, produce and share: • • • • • • •

Telling the organization’s story Time-lapse (of an event or project) Videos about partner organizations Event invitations or recaps Sharing the association’s mission Explaining an aspect of the association’s work Report summaries

www.ksaenet.org

• Holiday greetings • Stories from passionate association members • Highlighting the nonprofit’s impact F

References

1. Carly Mangus, “Why Video Content is Important for Your Association,” Association Management Center blog. http:// connect2amc.com/68-why-video-content-is-important-foryour-association. 2. Brianna Lawson, “How Your Association Can Use Video to Engage Members,” May 2, 2015. https://www.naylor.com/ associationadviser/video-to-engage-members/. 3. Mina Poyraz, “Tips for Creating a Nonprofit Video Marketing Strategy,” April 3, 2018. https://mediacause.org/videomarketing-nonprofits/. 4. Tatiana Morand, “The Ultimate Nonprofit Video Marketing Strategy + 5 of the Best Nonprofit Videos We’ve Seen,” July 20, 2018. https://www.wildapricot.com/blogs/ newsblog/2018/07/20/nonprofit-video-marketing-strategy 5. “Smartphones Make It Easy for Nonprofits to Create Professional Looking Fundraising Videos,” Online Fundraising: The Beginner’s Guide for Nonprofits; Chapter Six: Fundraising Videos. https://www.mobilecause.com/online-fundraisingguide/fundraising-videos/. 6. Stephen Koranda, “22 (More) Easy Video Content Ideas,” October 4, 2018. http://backtoyoumarketing.com/22-videocontent-ideas/.

KSAE Magazine • Summer 2021 |

TECHNOLOGY

UBIT AND VIRTUAL TRADESHOWS: WHAT ASSOCIATIONS NEED TO KNOW By Jeff Tenenbaum, managing partner, Tenenbaum Law Group PLLC

he IRS has made clear that revenue from traditional in-person tradeshows is not subject to unrelated business income tax. Does this safeharbor exception apply to today’s virtual or hybrid versions? Unfortunately, the answer to that question is as clear as mud. The transition from in-person to virtual events during the COVID-19 pandemic has raised a critical question for associations seeking to maximize sources of nondues revenue while also minimizing unrelated business income tax (UBIT): How is virtual tradeshow revenue treated for UBIT purposes? Guidance issued 17 years ago by the Internal Revenue Service was the last time the association community received direction on this issue. Applying it to today’s world is challenging, to say the least – leaving associations that hold virtual or hybrid tradeshows exposed to UBIT risk unless and until the IRS issues clarifying guidance. Although associations are granted a general exemption from federal corporate income tax for income derived from activities that are substantially related to their tax-exempt purposes, income from unrelated business activities is potentially taxable. Unrelated business income comes from a trade or business that is regularly carried on and that is not substantially related to the organization’s tax-exempt purposes. The most common form of unrelated business income for associations, by far, is advertising income. However, there are numerous statutory exclusions and exceptions that can exempt otherwise taxable income from UBIT. Since 1976, one of those exceptions is for income received from “qualified convention and tradeshow activities.” To qualify for this exception, an association must “regularly conduct as one of its substantial exempt purposes a show which stimulates interest in, and demand for, the products of a particular industry or segment of an industry or which educates persons in attendance regarding new

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developments or products and services related to the exempt activities of the organization.” The safe-harbor exception applies to 501(c)(6) tax-exempt entities, as well as to 501(c)(3), (c)(4) and (c)(5) organizations. Before 1976, the IRS had started to treat associations’ tradeshow exhibit fees as subject to UBIT, arguing that such fees were akin to taxable advertising income.

2004 IRS Revenue Ruling

In 2004, the IRS issued Revenue Ruling 2004-112 on the subject of virtual tradeshows. With the then-increasing prevalence of the internet and the ability to offer virtual tradeshows, questions began to arise as to whether the offering of a web-based tradeshow is the type of activity that is “of a kind traditionally conducted at … tradeshows.” The guidance describes two hypothetical scenarios: one involving a Section 501(c)(6) association that offers a semi-annual virtual tradeshow in connection with each inperson tradeshow; the other involving a Section 501(c)(6) association that offers a virtual tradeshow only. The Revenue Ruling made clear that the key factor in the IRS’s analysis of the applicability of the UBIT exception to a virtual tradeshow is whether or not the virtual show is conducted ancillary to a live show.

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TECHNOLOGY continued from page 34

In the first hypothetical scenario, an association conducts two tradeshows a year. The in-person shows are similar to most trade or professional association shows – they include members of the association and suppliers to the industry, and exhibitors are charged a fee to participate. During those shows and for three days before and after, the association’s website includes a virtual tradeshow section containing “information and visual displays … and links to the websites of exhibitors represented at the (in-person) tradeshow.” The site also contains order forms and has a function that allows online purchases from exhibitors. The association charges a fee to exhibitors that wish to be listed on the site. According to the IRS, these web activities fit within the safe harbor for qualified convention and tradeshow activities because: • The web activities are “ancillary” to the in-person tradeshows. • The content of the web page serves to “augment and enhance” the in-person tradeshows by making available “in an alternative medium the same information available at the show.” • The web page is available “during essentially the same limited time period that each tradeshow is in operation.” Thus, income generated by the web page will not be subject to UBIT in this scenario. In the second hypothetical scenario, the organization offers two-week-long virtual tradeshows without any connection to in-person events. According to the IRS, such activity will not qualify for the safe harbor because the show website is “not itself a convention, annual meeting or tradeshow” within the meaning of the tax code, due to the lack of an in-person component.

Today’s Virtual Tradeshows

Fast forward to 2021. Today’s virtual tradeshows are much more interactive and, in many respects, resemble their inperson counterparts for which the safe harbor was written. But with no guidance since 2004, it is difficult to say how the IRS would interpret the safe harbor today and apply it to the 2021 virtual or hybrid tradeshow. As the COVID-19 pandemic starts to abate, it is likely that at least for 2021, and perhaps into 2022 and beyond, associations will plan to hold hybrid conferences and tradeshows featuring both in-person and virtual elements. The virtual tradeshow in the Revenue Ruling’s first example featured only “the same information that is available at the [in-person] show” and a function that allowed purchases

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Unfortunately, the 2004 Revenue Ruling will continue to pose UBIT risks to associations in the virtual or hybrid tradeshow environment. from “members and suppliers represented at the tradeshow.” But if an association offers a virtual show in connection with a live show and allows companies that are not exhibiting at the live show to participate in the virtual show, for example, would the IRS determine that the virtual show is no longer “ancillary” to the live show and thus not covered by the safe harbor? This is unclear, as is the application of the 2004 Revenue Ruling to the modern-day virtual-only or hybrid tradeshow. It should be noted that a failure to qualify for the safe harbor does not necessarily mean that the income generated from a virtual tradeshow will be subject to UBIT. In most instances, the IRS likely would take the position that the net income is generated by the sale of advertising-type services and thus is subject to UBIT, but there may be instances when an association can demonstrate that its activity is substantially related to its tax-exempt purposes even without the help of the safe harbor. Further, if the arrangements with potential exhibitors are restructured accordingly, other exceptions from UBIT may apply. For instance, it may be possible to convert potentially taxable virtual tradeshow exhibit fees to tax-free corporate sponsorship income or royalties, allowing associations to retain more of their much-needed revenues. Unfortunately, the 2004 Revenue Ruling will continue to pose UBIT risks to associations in the virtual or hybrid tradeshow environment. That being said, the ruling does not supersede the clear intent of the federal tax code to provide a safe-harbor exception to unrelated business income where an association conducts an event to educate attendees or stimulate interest and demand for products or services of the membership. Therefore, it may not matter whether the activities traditionally conducted at tradeshows are done in person or virtually. Until the IRS provides new and updated guidance – which is not likely anytime soon – it would be advisable for associations to document how the activities of their tradeshows meet the tax code definitions of the safe harbor. F This article was originally published by the American Society of Association Executives’ at www.asaecenter.org. www.ksaenet.org

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