Nonprofit Tweets of the Week – 1/13/17

The past week was marked by President Obama‘s farewell address, President-Elect Trump‘s denial and denouncement of an unsubstantiated report that said Russia had compromising information about him, Trump’s concession that Russia was probably behind the hacking related to the Presidential election, and Trump’s insistence that he will not divest his business holdings. Have a listen to So Long, Farewell (from The Sound of Music) while perusing our curated nonprofit tweets of the week:

  • Council on Foundations: The inside scoop from industry experts on 2017 trends to follow in twelve sectors. http://bit.ly/2017TrendsT0106
  • Matthew Bishop: Barack Obama to lead fight against fake news; Clintons to revive the CGI. Philanthrocapitalism predictions for 2017
  • Gene: Democracies rely on civil society; civil society spaces are closing; and digital is part of that reason – @p2173 #blueprint17
  • Gene: Trend: Funders are asking for too much data that nonprofits do not have the capacity to provide safely – conversation needed. #blueprint17
  • Nona Randois: Hot off the presses – @AFJBeBold 7 advocacy tips for 2017 #BeBold
  • Don Kramer: As a nonprofit advocacy group, may we support or oppose Trump’s nominees for Cabinet posts? #nonprofit #Trump Nonprofit Issues 
  • BDO Nonprofit: What were the top issues facing the #nonprofit sector in 2016? Check out our #topblogs of the year: http://bit.ly/2i1rOo5
  • Nonprofit Quarterly: 6 strategies to consider in addressing longstanding problems of #inequity and #injustice in America: NPQ
  • Nonprofit Quarterly: A reminder of why freedom of the press is so incredibly important, now more than ever! http://hubs.ly/H05TbjB0
  • Jeffrey Bradach: Breathtaking. Lots of future upside (if intentional)! 10 Tech Trends That Made World Better in ’16 Singularity Hub

 

Two Lawline CLE Programs for Attorneys Helping California Nonprofits

We are presenting two Continuing Legal Education (CLE) programs for Lawline on Friday, January 13, 2016 that we hope California attorneys will find helpful in their representation of nonprofits:

 Forming a California Nonprofit (Erin)

This program will discuss the process of forming a California nonprofit entity, going through the legal considerations involved in each step in detail. We will start with a discussion of some of the appropriate things to consider before beginning the formation process and then turn to the mechanics of formation, including drafting Articles of Incorporation, Bylaws, and a Conflict of Interest Policy. We will also cover other legal considerations that apply to California nonprofits, including registration requirements at the state level.

Most nonprofits are required to separately seek recognition of tax-exemption at the state and federal levels, so we will take a close look at the requirements for exemption and the application process, focusing primarily on 501(c)(3) organizations. Finally, we’ll briefly touch on some alternatives to forming a California nonprofit that may be attractive in certain circumstances.

Throughout the session, Erin Bradrick, Senior Counsel at NEO Law Group, will illustrate concepts through examples and will provide information on how to access additional resources.

Earned Income Issues and Guidance for California Nonprofits (Gene)

Many people are surprised to learn that over 70% of the revenues from reporting public charities comes from the sale of goods and services. And charities are increasingly engaging in earned income (and social enterprise) ventures as they face the simultaneous challenges of uncertainty in public fundraising and the tax benefits associated with charitable giving, undependable philanthropic funding, and increased competition for limited resources. But earned income is an area wrought with misconceptions and misunderstandings.

The rules governing unrelated business taxable income (UBTI) are complex. As a result, many non-profits simply fail to properly report and pay taxes on their UBTI or preclude themselves from starting an earned income venture. As the differences in the activities of non-profit and for-profit organizations continue to blur with the increasing commercialization of charities and the growth of socially-purposed taxable entities (like the benefit corporation), the associated tax issues will only get more complicated. Subsidiaries, joint ventures, and commercial co-ventures may be useful options for some non-profits if entered into with sufficient knowledge and consideration.

This audio-only course, taught by Gene Takagi, the managing attorney of NEO Law Group, a firm specializing in non-profit law, reviews the legal issues that should be considered when reviewing a non-profit’s earned income venture and offers practical guidance on best practices for both in-house and outside counsel.

How to Be a Good Ally: A Strategic (Civil Rights) Engagement Conference

On January 6, 2016, I joined over 1,000 lawyers and legal professionals attending the How to Be a Good Ally conference in San Francisco. While work called me away in the mid-afternoon, I left tremendously impressed and inspired by those who organized the conference in reaction to the election results, by those who spoke to us, and by our local legal community. And I continued to follow the conference on Twitter.

Join 1,000+ lawyers and legal professionals for this cutting edge conference addressing urgent matters of importance, including rising hate crimes and anti-Semitism; governmental targeting of the Muslim community; deportations and dreamers; the targeting of transgender people and religious exemptions to LGBT civil rights protections; reproductive freedom and saving Roe v. Wade; changes to the Affordable Care Act and health access and impacts on people with disabilities and at-risk populations; criminalization of communities of color; combatting domestic and sexual violence; environmental protections under siege; voting rights and access; economic justice and workers’ rights; and challenges to civil liberties and the civil justice system.

You can follow the Storify here. Also check out the materials provided on Lieff Cabraser’s site relevant to each of the panels described below.

Highlighted Tweets & Resources

(from SFBayAllies, ADL San Francisco, Equal Rights Advocates, Equal Justice Society, Sara Zimmeran, Sally Xiyi Chen, Legal Aid at Work, Alison Elgart, Jeremy Chan, Bryan Parker)

Panel 1: Hate Crimes, Anti-Semitism and Rise of the White Nationalist Right

  • #HateGroups are emboldened when they feel they have allies in positions of power in gov’t. -@orensegal
  • Great takeaway from our first panel: protecting one group against hate crimes, is protecting all of us.
  • Action point: encourage advocates, allies & social media platforms to prevent #onlinehate and encourage positivity & truth
  • 501(c)(3) nonprofits can speak out if elected officials are advocating hate messages or violating civil rights
  • Reason for optimism: nonprofits are setting aside differences to collaborate on bigger civil rights issues
  • Recommendations of the ADL Task Force on the Online Harassment of Journalists

Panel 2: Government Targeting of Muslim Community

  • The Trump Memos: The ACLU’s Constitutional Analysis of the Public Statements and Policy Proposals of Donald Trump
  • Little outcry to Muslim registration program after 9/11-we must do better this time. Naheed Qureshi, @MuslimAdvocates

Panel 3: Immigrant Rights, Deportations and Dreamers

Panel 4: LGBTQ Equality Backlash

Panel 5: Protecting People with Disabilities and Medically at Risk

Panel 6: Justice Under Attack

  • Donald Trump and the Overinflated Presidency (WSJ)
  • Amicus: Corruption in the White House (Slate)
  • @Dahlialithwick We need to do better job of helping ppl undstnd what’s @stake; other side convincd ppl to vote against self-interest
  • Have to work across narrow interests (environment, LGBT, etc.); change will come from ground-up – decentralized @Dahlialithwick
  • “In order to change the rules, you need movement building.” – @rashadrobinson
  • @Dahlialithwick Nobody wants to talk about private prisons or gerrymandering but we have to get there
  •  @Dahlialithwick we must get beyond booze, Netflix & sleep. Tweeting & FB alone is not enough
  • Public failure to demand substance from media and government – @CharlesMBlow
  • Media was complicit in (digital) act of war – @CharlesMBlow
  • Optimist Prime: When cable news said, “he may not be good for the country, but he is good for our bottom line” = giant red flag. Unforgivable.

Panel 7: Criminalization of Communities of Color

Panel 8: Reproductive Rights and Saving Roe v. Wade

Panel 9: Combatting Domestic and Sexual Violence

  • @realDonaldTrump a disaster for violence against women. Must shift culture, esp in low wage industries+colleges.
  • ABA Section of Civil Rights and Social Justice Resource List from Campus Sexual Assault: A Civil Rights Perspective
  • Comments by PEOTUS and Sessions threaten to normalize gender-based violence. We must stand united to combat sexual violence

Panel 10: Protecting Workers

  • Chris Ho outlines how crucial protecting workers’ rights is now, esp. for undocumented workers, approx 10% of CA workforce
  • Language Discrimination (Legal Aid at Work)

Panel 11: Saving the Planet

Panel 12: Securing Voting Rights

Panel 13: Lift America to be America Again – A Call to Action (keynote by Rev. William Barber II)

  • If you ever want to see what white privilege is, we have just seen it in this election.
  • Trump mixes race and othering with economic fears, and points their fears towards women, POC, immigrants
  • We need mvmt lawyers, we need social engineers.  Everything you went to law school for is on the line RIGHT NOW.

Nonprofit Tweets of the Week – 1/6/17

The new year seems to be more Rogue One than A New Hope with House Republicans temporarily reversing their unconscionable decision on January 2 to gut the independent Office of Congressional Ethics formed to investigate corruption and malfeasance by lawmakers and the Democrats working to ensure certain provisions of the Affordable Care Act remain with any replacement plan developed by the Republicans. Have a listen to the Trailer Music Rogue One while perusing our curated nonprofit tweets of the week:

Duties of the President and/or Chair of the Board

President vs. Chair of the Board

Who’s in charge? This is a commonly asked question when structuring the governance and management of a nonprofit corporation. Is it the president or chair of the board? Do nonprofits need to maintain both of these positions? And how does an executive director fit into this equation?

Directors vs. Officers

It’s important to first distinguish between directors (board members) and officers. Generally, directors have no inherent individual authority or power. Their authority and power is exercised collectively as a board. Officers, on the other hand, are delegated with certain authority and power, which may be spelled out in a position or job description.

Officers

State laws generally require that a corporation have certain officers. In California, the Nonprofit Public Benefit Corporation Law (the “NPBC Law”) requires such corporations to have the following officers:

  • A president or a chair of the board;
  • A secretary; and
  • A treasurer or a chief financial officer.

The NPBC Law does not explicitly require that any officer be a director, though it may be understood that only a director can serve as chair of the board. Regardless, it is relatively common for all-volunteer organizations to elect officers from among the directors. It is also common for large organizations with employees to hire certain officers (like a CEO and CFO) who are not directors.

Who is the CEO?

The NPBC Law provides that the president, or if there is no president, the chair of the board, is the general manager and chief executive officer of the corporation, unless otherwise provided in the articles or bylaws. Accordingly, if a nonprofit corporation’s articles and bylaws are silent on the issue and assuming the corporation has a president, the president will be the CEO. Similarly, if the corporation’s governing documents are silent on the issue and the corporation doesn’t have a president, the chair of the board will be the CEO. See also Who is the Chief Executive Officer – the Executive Director or the Board Chair?

Duties of the CEO

While the duties of any officer are generally those spelled out in a position description, often contained in the bylaws, the CEO is generally thought to have certain inherent responsibilities and authority associated with an executive in charge of the management of a corporation, subject only to the authority of the board (but not of any individual director) or executive committee.

Should a Nonprofit Have Both a President and Chair of the Board?

As might be expected, there is no one answer that will fit all organizations. However, the following represents my general opinions on how a board might reach an answer specific to its specific circumstances:

  • For all volunteer organizations, there is probably no need to have both a president and a chair of the board unless there is an intent to select each position independently. If the long-term plan is to have one volunteer lead the organization and the board, it seems unnecessary to provide both titles to the individual. In such case, president may be the preferable position title as it suggests a role beyond  presiding over board meetings. Nevertheless, the bylaws might provide for the option of electing a chair of the board should it later become desirable to have a different individual in such role.
  • For organizations with paid employees, there may be advantages to having a compensated CEO and a separate volunteer chair of the board. In such case, the CEO is often provided the title of president. Because the CEO serves at the pleasure of the board, and typically has their performance reviewed and compensation determined by the board, separating the CEO and chair of the board functions by assigning them to different individuals can help avoid the major conflicts of interest that would otherwise be possessed by someone with both responsibilities. In some cases, however, having one individual serve as both CEO and chair of the board may be desirable despite the conflict of interest. For example, this may be true where a founder being compensated to act as the CEO is also the champion and clear leader of the board, which lacks another director able to fulfill the responsibilities of a chair of the board. Lack of developing additional leadership can, however, lead to the twin problems of founder’s syndrome and a rubber-stamp board. From a legal perspective, this may reflect the other directors’ breach of fiduciary duties due to the lack of exercising independent judgment and reasonable care.

Duties of the President

If the president is the CEO, the position description will be reflective of such authority and its accompanying duties and responsibilities. If the president is not the CEO, the nonprofit should make sure that there is a clear delineation between the positions and relative authority and responsibilities of president and CEO. For purposes of the following sample description of duties (probably more suited to a small to medium-sized nonprofit), I’ll assume that the president is the CEO and does not preside over meetings of the board.

Sample Description

The President is the general manager and chief executive officer of this corporation and has, subject to the control of the Board, general supervision, direction and control of the business, activities and officers (other than the chair of the board) of this corporation.   The President has the general powers and duties of management usually vested in the office of president and general manager of a corporation and such other powers and duties as may be prescribed by the Board. Among other things, the President shall be responsible for:

  • Ensuring the organization’s activities are compliant and in furtherance of its mission
  • Leading, managing, and developing the organization’s employees, volunteers, and organizational culture
  • Developing, implementing, monitoring, and assessing the organization’s programs (including their impact)
  • Developing, implementing, monitoring, and assessing sound and compliant financial management practices (including budgeting)
  • Developing, implementing, monitoring, and assessing sound and compliant fundraising practices
  • Developing, informing, and supporting the board and the board committees to carry out their governance functions
  • Partnering with the Chair of the Board to help ensure the Board’s directives, policies, and resolutions are carried out
  • Working with the development staff and Chair of the Board in cultivating and soliciting major foundation grants and individual gifts
  • Developing and maintaining beneficial relationships with donors, funders, supporters, collaborators, allies, vendors, and other stakeholders
  • Ensuring effective external communications about the organization and its mission, priorities, importance, programs, and activities
  • Championing the organization and advocating its mission to internal and external stakeholders
  • Keeping informed and the organization’s leadership informed of significant developments and changes in the internal and external environment
  • Leading the organization’s planning processes
  • Ensuring legal compliance (including all required filings) and sound risk management practices

Duties of the Chair of the Board

Sample Description

The Chair of the Board (if there be such an officer) shall, if present, preside at all meetings of the Board and the Executive Committee, act as a liaison between the Board and the President to help ensure the Board’s directives and resolutions are carried out, and exercise and perform such other powers and duties as may be from time to time prescribed  by the Board. More specifically, the Chair of the Board shall be responsible for:

  • Leading the Board and Executive Committee to carry out its governance functions
  • Ensuring the Board has approved policies to help ensure sound and compliant governance and management of the organization
  • Partnering with the President/CEO to  lead the development and refinement of impact metrics
  • Assessing the performance of the Board and its committees
  • Assuring ongoing recruitment, development, and contributions of Board members
  • Partnering with the President/CEO to help ensure the Board’s directives, policies, and resolutions are carried out
  • Working with the President/CEO in cultivating and soliciting major foundation grants and individual gifts
  • Coordinating an annual performance review of the President/CEO
  • Setting priorities and creating agendas for meetings of the Board and Executive Committee
  • Presiding over meetings of the Board and Executive Committee
  • Serving as an ambassador of the organization and advocating its mission to internal and external stakeholders

If the chair of the board is the CEO, the position description will be reflective of such authority and its accompanying duties and responsibilities (see Sample Description of President’s duties above). In such case, if the nonprofit also has an executive director, it should make sure that there is a clear delineation between the two positions and their relative authority and responsibilities.

Nonprofit Radio: 2017 Legal Tips

Erin will be on Nonprofit Radio this Friday at 10 am PT / 1 pm ET discussing 2017 Legal Tips with host Tony Martignetti. Catch them live on Talking Alternative or a few days later on iTunes.

The New Year means a close look in the corners. We’ve got the legal issues you need to fine tune.

Related Resources

10 Legal Tips in 30 Minutes to Get 2017 Ready 

The Blueprint Forecast for Philanthropy and the Social Economy 2017

10 New Year’s Resolutions for Your Board

5 New Year’s Resolutions for Nonprofits

Nonprofit Tweets of the Week – 12/30/16

Our last post of 2016, a year which many are ready to see end. Have a listen to Green Day’s Good Riddance while perusing our curated nonprofit tweets of the week:

10 Significant News Events of 2016

2016 has featured a number of major events that have affected, and will continue to affect, the nonprofit sector. Some might describe 2016 as a difficult year, featuring a long, turbulent election in the United States and unexpected results that have left many groups, including nonprofits themselves and the communities they serve, anxious and uncertain about their futures. Nonprofits such as the ACLU, the Sierra Club, Planned Parenthood, among others, saw record surges in donations following the election. On a judicial front, an empty seat on the Supreme Court resulted in the Court unable to decide on critical and controversial issues like immigration, and even though the Court upheld an affirmative action program at the University of Texas, the future of affirmative action and other major policy issues will likely depend on the next Supreme Court appointment. Abroad, Britons voted to leave the European Union, triggering financial and political uncertainty there as well. Here is a list of our 10 significant news events of 2016 affecting the nonprofit sector in the United States and a few links regarding each:

  1. The Election and President-Elect Donald Trump

    The 2016 Elections – Impact on the Work of Charitable Nonprofits [National Council of Nonprofits]
    Both Clinton and Trump Would Reduce Tax Incentives for Charitable Giving [Tax Policy Center]

    Trump’s White House Victory Could Spell Money Woes for Charities [Chronicle of Philanthropy]

    Nonprofits See Unprecedented Support Following Trump’s Win [Chronicle of Philanthropy]

  2. Brexit

    Historic UK “Brexit” Vote Raises Countless Issues for Nonprofits, Civil Society [Nonprofit Quarterly]

    What Lessons Does “Brexit” Hold for Social Innovators Worldwide? [Stanford Social Innovation Review]

  3. Dakota Access Pipeline

    Dakota Pipeline Update: When Resistance Is a Matter of Protection [Nonprofit Quarterly]

    American Indians Shouldn’t Get Shortchanged by Philanthropy [Chronicle of Philanthropy]

  4. Merrick Garland’s Nomination and the Empty Supreme Court Seat

    Obama nominates Merrick Garland to Supreme Court [CNN]

    The Supreme Court Needs a Ninth Justice Immediately [The Washington Post]

  5. Zika Epidemic

    Zika Spread Prompts Reexamination of Public Policy Re: Women’s Health in South America [Nonprofit Quarterly]

    Zika Is No Longer a Global Emergency, W.H.O. Says [New York Times]

  6. Black Lives Matter

    Black Lives Matter & the Road Ahead [Nonprofit Quarterly]

    How Philanthropy Can Show That Black Lives Matter [Chronicle of Philanthropy]

  7. Paris Global Climate Agreement

    Landmark Paris Climate Pact to Take Effect in 30 Days [Climate Central]

    100s of Businesses and Governments: Trump Should Uphold Climate Agreement [Nonprofit Quarterly]

  8. North Carolina “Bathroom Bill”

    DOJ and North Carolina File Lawsuits over NC’s Controversial LGBT Law [Nonprofit Quarterly]

    North Carolina Lawmakers Leave ‘Bathroom Bill’ in Place [The Washington Post]

  9. US Supreme Court Upholds Affirmative Action Program

    Supreme Court Upholds Affirmative Action Program at University of Texas [New York Times]

    Impact of Supreme Court’s affirmative action ruling could reach K-12, higher ed [PBS]

  10. Continued Conflict in Syria

    Starving in Place: Humanitarian Aid Still Blocked in Syria while Ceasefire Shaky [Nonprofit Quarterly]

    7 Experts To Read On The Desperate Health Crisis In Syria [Huffington Post]

    After Aleppo, what happens to Syria’s besieged towns? [Al Jazeera]

 

Editor’s Honorable Mentions:

Biggest Change to Nonprofit Financial Reporting in 20 Years Has Arrived [BDO Nonprofit Standard]

“The Financial Accounting Standards Board (FASB) has just released the Accounting Standards Update (ASU), Not-for-Profit Entities (Topic 958) – Presentation of Financial Statements of Not-for-Profit Entities, which you can find here. If you’ve been following our blog, you’ll know this marks the biggest change to nonprofit financial reporting in more than two decades.”

The Foreign NGO Law [ChinaSource]

“On January 1, 2017, China’s new Foreign NGO Management Law will go into effect, changing the landscape for foreign individuals and organizations working in China.”

Best of the Nonprofit Law Blog 2016

Here are some selected highlights from NEO Law Group over the past year that we hope you’ll find helpful.

Blog Posts

Compliance

10 Legal Tips in 30 Minutes to Get 2017 Ready

New IRS Notification Requirement for 501(c)(4) Organizations – Form 8976

Nonprofit Corporation Legal Audit

Nonprofit Compensation: Tips on Using Comparability Data

Starting a Nonprofit

Starting a Nonprofit: Form 1023 or Form 1023-EZ?

How to Start a 501(c)(4) California Nonprofit Step by Step

501(c)(3) Purposes & Activities

Environmental as a 501(c)(3) Charitable Purpose

Economic Development as a 501(c)(3) Activity

Lobbying Activities

The Power of Nonprofit Advocacy: Best Lobbying Resource Ever!

Lobbying & Grants to Non-501(c)(3) Entities: Know The Rules

Political Activities

501(c)(3) Electioneering Rules: Voter Guides & Candidate Questionnaires

501(c)(3) Electioneering Rules: Candidate Appearances & Debates

Employee Endorsements & Election Activities

The Electioneering Prohibition: A Closer Look

Private Foundations & Donor-Advised Funds

F. D’Up Family Foundation

Program-Related Investments

Donor-Advised Funds: What You Should Know

Events

20th Annual Western Conference on Tax-Exempt Organizations

New Frontiers: 2016 Independent Sector Annual Conference

SOCAP16

2016 ABA Business Law Section Annual Meeting

5 Highlights from the ABA Exempt Organizations Committee Meeting 1/29/16

California

California’s Dangerous Nonprofit Warning Label Bill – AB 2855 – Will Not Advance

Foreign Corporations and the Application of California Nonprofit Laws

Commercial Fundraiser – A Revised Definition

Miscellaneous

Crowdfunding Rap

Featured Small Firm: San Francisco Daily Journal

Attorney/Director: Issues for Attorneys Serving on Nonprofit Boards

10 Predictions for the Nonprofit Sector in 2016 and Beyond

Articles

SOCAP16 and the Continued Evolution of Impact Investing, The Nonprofit Quarterly

Churches & Political Activity: The Call to Repeal the Johnson Amendment, The Nonprofit Quarterly

Understanding ‎Crowdfunding after a Tragedy, The Nonprofit Quarterly

Think Tanks Need a Certification Program to Establish Transparency, The New York Times

Program-Related Investments: Will New Regulations Result in Greater and Better Use? The Nonprofit Quarterly

The Ongoing Overhead Myth and the Dangers of Overly Zealous State Legislators, The Nonprofit Quarterly

The Deposed “King” of Queens Library: The Legacy of Bad Nonprofit Leadership, The Nonprofit Quarterly

Fiscal Sponsorship: A Balanced Overview, The Nonprofit Quarterly

Columns

NEO’s Erin Bradrick became a monthly columnist for The Daily Journal, California’s largest legal news provider!

Nonprofit Radio

Unpaid Interns

Election Year Advocacy

Overhead and Wounded Warrior Project

PATH Act (IRA Charitable Rollover)

Speaking Engagements

Nonprofit Crowdfunding, Western Conference on Tax-Exempt Organizations

Hot Topics to Keep Nonprofits Out of Hot Water, CalNonprofits Annual Convention

Complexities of Starting a Nonprofit in California, Lorman (Live Webinar)

Winding Down/Gearing Up: 10 Legal Tips to Get 2017 Ready, Foundation Center (Livestream)

Duties and Responsibilities of Serving on a Nonprofit Board, Bar Association of San Francisco

Nonprofit Tweets of the Week – 12/23/16

griffith park observatory at night

The past week was marked by our firm’s holiday celebration, which included watching La La Land, and my trip to La La Land (where each of us has lived for significant parts of our lives). Have a listen to Mia & Sebastian’s Theme (Late For The Date) while perusing our curated nonprofit tweets of the week: