At the nonprofit governance seminar I presented with fellow EO attorney Cherie Evans at the Bar Association of San Francisco, we had the treat of hearing Sheila Warren, another EO attorney and lead singer of Stimulus Package, sing my parody Hey There Director, summarizing our seminar. Due to popular request (all 3 of you), I am including the lyrics on this post.
Hey there Director
Don't you worry about your duties
Act in good faith and due care and
in the charity's best interests*
Delegate**
Listen to your head, it's common sense
Substantiate***
*Cal Corp Code 5231(a)
** Corp Code 5210
*** Provide oversight of uses of delegated authority
Hey there Director
Do you review the financials?
You're an unpaid volunteer
But hey, you've got to be respons'ble
Yes you do
The IRS will be on you*
The AG too**
* For violations of federal tax laws (e.g., failure to pay payroll taxes)
** For violations of state laws (e.g., breach of fiduciary duties)
Oh it's new Form 990
There are policies you need
Compensate reasonably*
Manage conflicts 'ppropriately**
Accept gifts caref'lly***
* Executive compensation policy
** Conflict of interest policy
*** Gift acceptance policy
Hey there Director
I know that this can be quite hard
Accountability is key and
Public trust is what you guard
Transparency*
No secrets in our neighborhood
Make your word good
* One of three guiding principles for the new Form 990
Hey there Director
I've got so much left to say
'Cause to understand 501(c)(3)
Is why you’re here today
You must comply
No private benefit at all*
Or you will fall**
* Treas. Reg. 1.501(c)(3)-1(d)(i)(ii)
** E.g., intermediate sanctions under IRC 4958
Oh it's new Form 990
There are policies you need
Protect whistlers who see*
Destroy docs appropriately**
* Whistleblower policy
** Document retention/destruction policy
Excess benefit transactions*
Will get you no satisfaction
Intermediate sanctions come to play
The papers will make fun of you
So listen close because we know
Rebuttable presumption's the way**
Director I can't promise you
That comparables will get you through
But concurrently document the same
Or you're to blame
* IRC 4958
** Treas. Reg. 53-4958(6)
Hey there Director
Try to attend all your meetings
D&O will help you mitigate*
Risks of liability to you
Indemnification helps too**
Use diligence in all that you do
Hey there Director here's to you
This one's for you
* Directors and officers insurance
** Provisions typically found in the bylaws
Oh it's new Form 990*
It's for everyone to see**
IRS claims it will be
Key to strength'ning charities
Strength'ning charities
* Redesigned for the first time since 1979
** Charities must make Form 990 available to the public
