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Budget: Strategic Program Budgeting - - Strategic Program Budgeting is allocating salaries and other overhead to know the true profitability of its products and services. This concept is a best practice in program budgeting. It is achieved through conducting a systematic study of allocation of staff time to program categories, then applying the calculated prorated share of overhead expense to the programs identified. Branding - - Branding is a marketing process based in the concept of singularity. It creates in the mind of the prospect the perception that there is no product on the market quite like yours. The power of a brand is its ability to influence purchasing behavior. Branding incorporates a singular look, feel and message in building a belief about your association and its products. Audit: Clean Audit vs. Unqualified - - Audit Clean - A clean opinion provides the highest level of assurance that the Statement of Financial Position fairly presents the organization's financial position; the Statement of Activities fairly presents the results of the organization's operations; and the Statement of Cash Flows fairly presents its cash flows. Unqualified - An unqualified opinion provides the highest level of assurance that an audit can provide with attention given to a particular matter and provides for disclosure of additional financial statements provided or draws attention to an additional important matter. Accounting Practice: Segregation of Duties - - No individual should control all four aspects of any financial transaction: Initiation (check requests); Authorization (approval to pay); Asset custody (keeping the checkbook); Recording the transaction (posting) Financial Controls: Segregation of Duties - - Management is responsible for the organization's financial reports and the information contained within; the auditor's role is to verify the amounts included in the reports. In its fiduciary responsibility, it is the Board's job to hire the external auditor and receive the report; it is a conflict of interest for the CSE or CFO to hire the auditor. Financial records must agree with the financial report certified by the auditor; any changes the auditor deems necessary are subject to acceptance by management. Sarbanes-Oxley has created regulatory requirements for corporations related to the audit function. Financial Controls: Sarbanes-Oxley - - Sarbanes- Oxley requires compliance with a comprehensive reform of accounting procedures to promote and improve the quality and transparency of financial reporting internally and externally. While the initial law applies to publicly held corporations, many of the requirements are being practiced in the non-profit community in expectation of expansion of the law's outreach. Sarbanes-Oxley requires establishment of an audit committee and: - Requires the audit committee to have a financial expert as a member - Requires the audit committee to hire the auditor - Requires five-year audit partner rotation - Requires audit committees to establish procedures for processing whistle blower complaints by employees - Requires a code of ethics for financial officers - Increases penalties for document destruction or alteration - Requires certifications by the CEO and the chief financial officer regarding the financial condition of the company and internal controls. Nonprofit recommendations include: - A code of ethics for the board of directors - Regular board training - Regular board self- evaluations - Audit committee members who are financially literate. Financial Controls: Annual Audit - - No individual should control all essential aspects of any transaction: initiation, authorization, asset custody and recording. Segregation is the heart of any internal control system. Other steps include: a well-designed record keeping and information system, a sound budgetary process, and an independent audit. Financial Controls: Factors essential - - Four factors essential to good internal financial controls: 1. Clear lines of authority; 2. Clear definition and acceptance of responsibility; 3. Authority commensurate with responsibility; 4. Proper training. Financial Statements: Management Letter - - Is issued by an independent auditor. The Management Letter communicates those areas that management needs to address in order to come into compliance with GAAP accounting practices. Financial Statements: Combined Cash & Accrual Statement - - In a combined statement, certain transactions are recorded on an accrual basis and others are recorded on a cash basis. Usually, unpaid bills are recorded on accrual and uncollected income is recorded on the cash basis. Many organizations keep books on the cash basis and convert them to accrual at the end of the
month for accounting purposes. Financial projections - - Financial projections forecast future financial results. Usually presented in a "pro-forma" statement, financial projections are generally speculative and investors are cautioned to recognize the projections are not guarantees of performance. Sound financial projections should be based on credible assumptions, a conservative projection of revenue and an aggressive projection of expenses. Financial Key Indicators - - Selected by leaders, they are quantitative measurements of strategic importance that will indicate a fairly accurate picture of the organization in relation to its strategic plan. Indicators might include: # of new members, % of retained members, # of new business starts, # of organizational members participating in programs, # of accounts Financial Terms: Classes of Funds - Restricted, Unrestricted & Temp Restricted - - There are three classes of funds in a 501(c)3 organization: unrestricted, temporarily restricted (as to time and/or purpose), and permanently restricted. Unrestricted funds are funds which can be used at the discretion of the management within the range of uses defined. Temporarily restricted net assets result from contributions of assets when use by the organization is limited by donor-imposed stipulations that either expire or can be fulfilled and removed by actions of the organization. These assets are shown on the Statement of Financial Position. These assets are also reported on the 990 Long Form. Permanently restricted net assets result from contributions where the donor has stipulated a specific use that do not expire with time and cannot be shifted by the organization. "Endowments" are one common type of permanently restricted net assets. Financial Terms: Association Reserves - - Net assets minus net liabilities. This is the "surplus" or "rainy day" fund for an association. Reserves are usually protected by the board. Some organizations budget to contribute to the reserve fund annually; others contribute if they have extra cash at the end of the year. Financial Terms: Accrual vs. Cash Accounting - - Accrual-basis accounting recognizes revenues when earned and expenses when incurred. Cash-basis accounting recognizes revenue when cash is received and expenses when cash is expended. Best practice in association accounting is to use accrual accounting; allocating dues when earned monthly, rather than recording a lump sum when received. Accrual accounting gives a much better financial picture and cash flow projection than cash accounting. Financial Terms: Chart of Accounts - - A system for organizing financial data, a listing of all the line item accounts being used by the organization. Numbers are assigned to each account to facilitate account identification. Accurate and appropriate entry into proper accounts is key to sound financial management and reporting. Financial Terms: Capital Budget - - The financial plan for long-term expenditures such as land, buildings or equipment, including depreciation. Financial Statements: Statement of Financial Position -
- The Statement of Financial Position was formerly known as the Balance Sheet. It summarizes financial makeup of the organization at a point in time. It reflects: the assets owned by the organization, the liabilities owed by the organization, and the residual net assets (representing net worth.) Financial Statements: Statement of Activities - - The Statement of Activities was previously called the Statement of Revenue and Expenses or the Profit/Loss Statement. It shows the organization's financial activity by the month and on a year-to-date basis. It reports: revenue generated, expenses incurred, and results in net income or net loss. Financial Statements: Reporting capital gains - - Capital gains or losses should be reported in the unrestricted class. There are two exceptions to the rule. Gains must be reported in the restricted class if: 1) there are explicit donor restrictions on the gains; 2) applicable state law is judged by the organization's governing board to require the retention of some or all of the capital gains/losses in the restricted class. Financial Terms: Net Assets - - Residual value of the association after liabilities have been paid. Contains three classes of assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
from). Benefits define what positive result might come from the feature (with 130 sessions, you can choose the sessions that you need.) Value zeroes in on the specific impact that the product or service will deliver to the individual customer (our 75 "how to" sessions will give you practical tools that will improve your bottom line performance). Marketing: Interruption Marketing - - Interruption marketing is where the purpose of the ad is to interrupt what the viewer is doing in order to get them to think about something else. Open Information - - Not-for-profits are required by law to make their 990 or 990EZ filing available for public inspection. This is particularly important for 501(c) donors to verify allocations of donations to administrative expense. Minutes of the organization must be made available to members if requested. Statistical reports must be made available to anyone who requests the information; non-members may be charged a reasonable fee for the report. Member lists are the property of the association and may be withheld from non-members. Micromanagement - - Micromanagement is not in an organization's best interest where board members give supervisory directions to those who report directly or indirectly to the CSE on operational issues. The board holds the CSE responsible for staff and association performance. Board should be focused on strategy rather than operations. Marketing: Viral Marketing - - Viral marketing is a marketing strategy that encourages individual to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence. An effective viral marketing strategy involves 6 principles: 1. It gives away products or services, 2. It provides for effortless transfer to others, 3. It scales easily from small to very large, 4. It exploits common motivations and behaviors, 5. It utilizes existing communication networks, and 6. It takes advantage of others' resources. Marketing: Target Marketing - - Selecting one or more of these segments and developing a position for each segment, plus developing a marketing mix for each target market and strategy to penetrate those markets. Financial Statements: Statement of Cash Flows - - The Statement of Cash Flows provides relevant information about cash receipts and cash disbursements from operations, investments and financing activities during a period of time. The statement helps creditors and others to assess the organization's ability to generate positive future cash flows to meet its obligations and its need for external financing. Since cash is the one most liquid asset of all, cash plays an important role in maintaining an organization's financial health. Sufficient cash, along with the ability to readily convert other assets into cash, is important for maintaining an organization's financial flexibility. Positioning: Disaster Doctrine & Recovery - - Disaster doctrine recovery strategy is a crisis planning process that helps you figure out what to anticipate so that you'll know how to prepare. Considerations are: 1) Service-interruption time bands - Identify the time intervals for your ability to do without your key biasness processes, including those that are outsourced to a third-party vendor or organization. 2) Emergency incident assessment - Determine the types of disruptive events that are most likely to affect your normal business process; review any documentation relating to the areas under investigation (evacuation plans, building management documentation, backup procedures, etc.) 3) Operational impact - Service- interruption time bands and the emergency-incident assessment will help establish areas of "significant impact" on normal operations; negative impact on member services. Organizational Uncertainties - - A process to assess uncertainties includes: 1. Broadly identify key questions about the future. (Consider macro uncertainties, i.e. events that your organization has little or no control over, industry uncertainties where you have limited control, such as actions by competitors or regulators, and internal uncertainties, such as budgets and deadlines.) 2. Isolate real uncertainty from perceived uncertainty. 3. Understand your biases, to address the uncertainties. 4. Develop leadership and the right culture. 5. Change organizational systems that block success. Organizational Success Can Be Blocked by What? -
- Blockers include: Rigid organizational structures-- often an organization is structured around an environment and demographics of the past, rather than the future. Organizations should be designed to encourage communication, learning and flexible decision making to remain relevant to a changing present. Results based
compensation plan--many established plans hold executives in the past rather than on unknown opportunities. Comp plans should emphasize flexibility, opportunism and a good process that will produce superior results in the long run. Static present/net value analysis--a rigid financial tool does not always serve the organization; your best solutions will include commitment with flexibility with all parties willing to share the risk of uncertainty as well as the rewards of navigating success. Succession Plan - - When volunteer or staff leadership changes, it is ideal to have a plan on what qualities are needed and who will succeed the current leader. The plan is usually implemented when: a term ends, a retirement is announced, or in the case of a resignation. Subsidiaries: Separate Identities - - A parent and its subsidiary should have separate corporate tax identities where the subsidiary carries on a separate business activity and is not acting as a true agent of its parent. Subsidiaries: Reasons To Form - - a) Protect the association's exempt status b) Facilitate joint ownership in property c) Insulate the association from liability d) Enable an association to properly reflect income from an activity e) Aid in reducing taxable income f) Perform services for members. Subsidiaries: For-Profit - - An exempt association can own 100% of the stock of a for-profit, taxable subsidiary, provided the two entities: engage in separate activities, have separate boards of directors, separate books and records, separate bank accounts, and the subsidiary is not the "alter ego" of its parent organization. Monitoring: Balanced Scorecard - - Associations are adopting this popular for-profit means of expressing strategy in measurable terms. Board performance is measured in four categories that would provide a more "balanced" perspective: financial performance, customer satisfaction, process efficiency, and, at the time, innovation. Mission-Based Management - - A philosophy of non- profit management by author, Peter Brinckerhoff, that leverages the cause of an organization's mission to bring about optimal strategic performance. Types of Financial Policies - - Among the kinds of financial policies commonly found in associations are: Investment and Reserve Policies, Budget Policy, Operational Accounting Policies. Taxes: UBIT & 990T - - Unrelated business income is income derived from a regularly conducted trade or business activity that is not significantly related to the tax- exempt purpose of the organization. Its purpose is to prevent exempt associations from competing unfairly with taxable businesses in activities that do not advance their exempt purposes. An association's exempt status can be jeopardized if unrelated business income constitutes too high a proportion of the organization's income. Some specified requirements for computation, payment and reporting UBIT: a) Unrelated business income and losses generally can be lumped together to offset total income and total losses b) A $1,000 special deduction c) Regular business deductions are allowed d) Taxation is at corporate rates e) quarterly estimated tax payments are required f) A foreign tax credit is available to foreign associations g) IRS form 990-T is to be filed by associations with more than $1,000 annual gross unrelated business income (this is in addition to form 990) Taxes: Possible Taxable Functions For An Association -
- Dues related to lobbying 2) Expense deductibility from attendance at association meetings 3) Advertising 4) Income derived from real estate 5) Income produced from non-dues sources of revenue Taxes: Employment-Related - - Associations exempt from federal income tax remain subject to: federal, state and local employment tax withholdings;, Social Security;, and unemployment taxes. Taxes: 990 & 990 EZ Forms - - An association that exceeds gross annual income of $25,000 must file a Form
- Associations with gross revenues under $100, and total assets under $25,000 can file a Form 990EZ simplified form. The forms are due the 15th day of the fifth month after the association's fiscal year ends. Tax Management - - Intentionally structuring the for- profit and nonprofit functions of the organization in order to minimize the organization's tax liability requires a tax management process: 1) Assign a top executive to make
create a strategic plan to address the faults that created the projected disasters. Research: Summative vs. Formative Evaluations - - Summative stems from the word "sum" or "summary." In summative planning, management, and evaluation, something is examined after it is over, and decisions are then made as to whether it was satisfactory or not. An example of a summative evaluation is a meeting evaluation form. Formative stems from the root "to form" or "to shape." In formative planning, management, and evaluation, we look at things while they are unfolding to see whether we are headed where we wanted to go. This way we can adjust our course along the way if necessary. An example of formative evaluation is to survey the members to determine what skills are integral to the job BEFORE you create the curriculum. Research: Qualitative vs. Quantitative Research - - Qualitative research is subjective, inductive research that results in generating theory. Quantitative research focuses on numbers and objective data to test theory. Research: Primary vs. Secondary Research - - Primary research is original research gathered for a specific reason. Primary research will be more expensive than secondary research, but it develops of new data about your specific issue. Effective primary research is defined by clear objectives and recognition of nuances. Secondary research is data compiled and interpreted by others. Sources include surveys and statistics compiled by outside firms, databases, library materials, the trade press, and government reports. The data was collected for reasons that were not specific to your association's concern but provides relevant information to that concern. Strategic Planning: Environmental Scan - - Environmental scanning and strategic planning are not simply linked - they are inseparable. Environmental scanning is a systematic effort to obtain information about the world that will affect an organization. Scanning is important in managing change and avoiding costly mistakes. 1) Macro environment - larger space shared with other organizations and professions. 2) The association industry environment - organizational trends -- evolving governance, structures, operational practices, services to members, technology trends, and competition.
- The environment in which the members operate - the profession itself. 4) The association's immediate operating environment - internal trends and issues. A solid way to conduct the internal scan is to use the following areas to address all key aspects of the internal environment: governance and structure, leadership, management and administration, internal and external relations, communications, programs and services. Strategic Planning: Core Values - - The organization's core values describe the assumptions and beliefs of the organization, which represent the common understandings and commitments of the members. Core values are the most important central qualities that define the character of us as an organization. Strategic Direction vs. Strategic Management Planning -
- Defining Strategic Direction is the work of the Board. It is a broad focus of where to pour the association's resources. Optimally, that direction should be outcome driven rather than activity driven. Strategic Management Planning is the operation work plan to achieve the outcomes defined by the Board. It involves monitoring and evaluating environmental opportunities and problems in light of the organization's strengths and weaknesses and then shaping a coherent set of strategies, programs, and budgets to take advantage of these circumstances. Statement of Purpose vs. Mission - - Statement of Purpose: Statement of the reasons for an association's existence that defines its underlying design and thrust. The stated purpose is crucial in making determinations such as whether the association can be a nonprofit corporation, is exempt from paying taxes, has interests and activities consistent with its purposes and can attract prospective members who wish to support its objectives. Mission: The focused energy that drives the organization; in effect defining the business we are in. An organization's mission may change, but its purpose generally does not. Strategic Planning: Visioning - - Visioning is a commitment to rethinking and reviewing the organization holistically. Visioning is a process of scanning and planning for the long- term results in an organization. It is imagining a desired future. Visioning begins with a commitment of leadership, that sets off a chain reaction that generates enthusiasm, sparks creativity, leads to new ideas, attracts committed followers, and ultimately reinforces the leaders' commitment. Strategic Planning: Growth vs. Maintenance Objectives -
- Growth Objectives - "Doing the right things" is the ability to identify critical issues and opportunities that can change and develop an organization for the better-- strategies that energize and maximize a strategic plan. Maintenance Objectives - "Doing things right" is important for maintaining and sustaining growth. Strategic Planning: Fluidity, Flexibility, Nimbleness -
- Strategic direction of organizational structures is toward greater "fluidity." For example: a paradigm shift where the marketplace decides whether and how it wants membership, rather than the organization deciding whether the individual can be a member or not. Flexibility involves ways to easily move assets around, reshape, and move much more quickly. In a world of diverse needs, flexibility and how associations organize to meet needs becomes strategically important. Nimbleness (Responsiveness)-- Associations must become able to move more quickly. The world does not hold still for traditional governance processes and structures. Our decision processes need to operate more quickly, be more maneuverable, and be outcome oriented. Structures that inhibit nimbleness include membership structure, governance structure, program structure, work force structure, financial structure, and the information structure. Strategic Planning: Environmental Scanning - - Six- step model includes: 1. Plan, including a review of the literature--, print & internet;, brainstorming issues, trends & other important topics;, outreach to members through surveys, list servers, workshops;, outreach to others, i.e. new members, young employees & members, periphery observers. 2. Scan the trends in your industry, associations & the operating environment. 3. Apply insight and interpret the trends important to the association's strategy. 4. Establish a framework for decision-making. 5. Identify the strategic issues for the association to address.
- Develop strategies. Collaboration - - A relationship where multiple parties work together on a project of an intellectual nature. Capacity: Maximizing Volunteer Capacity - - Volunteers are looking for minimum time involvement, maximum influence, and major benefit. To maximize volunteer capacity, the association needs to assess how they use volunteers in decision-making and how they train their volunteers in the group decision-making process. Volunteers usually come into the job because they want to help or make a difference, but they don't necessarily know how to do that. The association needs to provide skill and conceptual development in governance and leadership, team building, and a cultural orientation to maximize the potential. A critical focus to build capacity is through succession planning: intentional and thoughtful recruitment of volunteers who provide the skills, resources and connections vital to the organization. Strategy Planning: Values vs. Vision - - Values - the beliefs at the heart of the organization. Vision - the image or state to which the association aspires. Active Listening - - Active listening requires being in the present moment, engaged with the speaker rather than thinking about your response to the speaker. Active listening includes noticing when the body language does not match the words spoken or when the passion expressed is not aligned with the issue being discussed, and inquiring about the incongruence. It also includes paraphrasing in your own words what you heard someone say to assure understanding and acknowledge that you heard the speaker. Crisis Management Planning: Areas for Consideration -
- Three-phase process: Phase 1 Pre-crisis a) Plan for crisis b) Establish policy c) Establish a crisis information function (communications); Phase 2 The Crisis a) Define the crisis b) Access existing crisis plan c) Respond professionally; Phase 3 Post Crisis a) Review the association's crisis performance b) Plan for the next crisis. Cost/Benefit Analysis - - The technical process of judging the value of a given activity, program or service against the cost. Conflict: Constructive Conflict - - Organizational cultures that avoid conflict cannot function as an aligned team. Teams that engage in conflict: Have lively, interesting meetings, Extract and exploit the ideas of all team members, Solve real problems quickly, Minimize politics, and, Put critical topics on the table for discussion. Constructive conflict brings the team together. Conflict and closeness are on the same continuum. You cannot have one without the other. Creating an honest environment and taking responsibility for your own action will make managing conflict easier.
capacity and strategic position of organizations, external marketplace dynamics and realities, and fairness and appropriateness of choices. Leadership Competencies - - Seven skills identified in Beyond Management to Leadership: Designing the 21st Century Association include: 1. servant leadership 2. creating and communicating vision 3. promoting and initiating change 4. building partnerships 5. valuing diversity 6. managing information and technology 7. achieving balance Trust: Three Elements Required to Build Trust - - Achieving results, acting with integrity, and demonstrating concern. Role: CSE in Cooperating in External Alliances - - The CSE must never lose sight of the good of the organization. That may mean entering into collaborative efforts with competitors; it may mean merging and eliminating one's own position for the good of the organization. The CSE must always look for opportunities in the interests of the members, applying the standards for conflict of interest. It is not "my organization", it is the "members' organization." Partnership vs. Joint Venture - - Legal relationship where two independent parties join together in the pursuit of a common goal. Partnering creates synergy, expanded resources and markets and is done when there is a win/win possible for all partners. A joint venture is focused on an entrepreneurial pursuit where both parties share risk in the investment and uncertainties. Contractual language must be in place to define the relationship and responsibilities for either configuration. Usually a separate corporate entity is created in the joint venture to protect all parties from liability incurred by one of the venture partners, since joint venture partners are sometimes viewed as "deep pockets" in liability claims. Organizational Culture - - A particular set of policies, practices, values and expectations that define and guide a workplace or organization. Americans With Disabilities Act (ADA) - - The ADA is the most significant federal civil rights legislation affecting private employers since the Civil Rights Act of 1964. The act became fully effective in July 1994 for employers of 15 or more employees. The law prohibits discrimination based upon disability. ADA Prohibitions - - The ADA prohibits discrimination against a qualified individual with a disability who can perform the essential functions of the job, with or without reasonable accommodation. ADA: Reasonable Accommodations vs. Undue Hardship -
- Reasonable accommodation-Associations and all covered employers must make reasonable accommodations that would not impose an undue hardship on the organization. Accommodation must provide that the essential functions of the job can be accomplished. These include: 1) Making facilities accessible and usable 2) Restructuring or modifying jobs
- Acquiring or modifying equipment and 4) Providing qualified readers and interpreters. Undue hardship-If a "reasonable accommodation" imposes significant difficulty or expense, it might be deemed an "undue hardship." Factors include: the size of association or business, the nature and cost of the accommodation and, the type of operations. ADA & Pre-Employment Medical Inquiries - - Only drug testing is permitted during application and pre- screening process; the ADA forbids pre-employment inquiries and exams. However, a medical exam may be required once an offer has been made. Must impose the same requirements on all employees in that particular category. Interviewing questions must only be about job- related concerns. Contracts - - A voluntary understanding between two or more individuals or entities that creates a legally binding relationship between or among them. Three essential elements for any contract: 1) an offer, 2) specific acceptance and 3) consideration--an exchange of anything of value in performing the contract, i.e. money. Other key concerns for a valid contract are: mutuality-the contract has to be balanced, NOT unilateral;, competent parties with authority to enter into the contract, and to be enforceable, it must be in writing. Anti-trust: Potential Anti-trust Violations - - Potential anti-trust violations: suggesting profit levels, price setting, advertising prohibitions, prohibiting competitive bidding, requiring uniform terms, suggesting use of specific raw materials and, encouraging boycotting
Antitrust Related Laws & Issues - - Clayton Act - prohibits specific distribution and growth activities that may substantially restrain trade (i.e., tying arrangements, exclusive dealing and requirements contracts, price discrimination, mergers and acquisitions and joint ventures). The Robinson-Patman Act - Section 2 (a) prohibits discriminatory pricing between different purchasers of commodities of like grade and quality. Competitors must not be able to use the association as a shield. The Federal Trade Commission Act established the FTC, giving it responsibility for the prevention of "unfair methods of competition in or affecting commerce." Sherman Act prohibits restraint of trade, monopolies, and other anti-competitive activity. Antitrust Compliance - - Associations are particularly susceptible to antitrust allegations. National associations must maintain and should promote antitrust compliance programs, including written guidelines to all staff members and association leaders. Chapters must receive and implement this compliance information as well. A compliance program proactively creates an environment that demonstrates that the association has taken all reasonable means to prevent antitrust behavior and conversations. Such a compliance program provides a defense in court where the burden of proof is on the defendant/association to prove innocence. HR: Factors in Staff Recruitment - - a) Salary & benefits including opportunity for advancement and continuing education, b) reward and recognition programs, c) fair treatment, d) care and concern, e) trust, f) instilled accountability of managers, supervisors and employees at every level. HR: Approach to Staff Recruitment - - Create a standard approach to staff recruitment to assure consistency in the evaluation of candidates. Consider these factors before recruiting applicants for the position: a) Salary will the salary attract the skills and style needed? b) Job design every position should include a variety of duties to retain the interest of an employee over the long haul, c) interest in association's issues or work if interest is present, an employee may bring an emotional commitment to the job, d) interest in staff specialty area. HR: Exempt vs. Non-Exempt - - Non-exempt employees must be paid at least the minimum wage and overtime for hours worked over 40 a week. Exempt employees are exempt from the law and do not have to be paid the minimum wage or overtime if certain requirements are met. The Department of Labor defines who is exempt, not the employer. Employees paid on a "salary" basis means that the employee is paid the same, predetermined amount for each week that work is performed. Nonexempt employees can be paid a salary, but must be paid overtime for any hours they work over 40 a week. HR: Equal Opportunity Employment - - "Equal Opportunity Employer" is a voluntary status for employers which allows them to use the tagline if they abide by certain employment regulations, including: compliance with written policy of nondiscrimination, promotion and equal access for all employees, as well as posting rights of employees. HR: Sexual Harassment - - Sexual harassment is "unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature." Requests, advances, or conduct of this kind constitute sexual harassment when (1) it is a condition of employment, (2) there is an employment consequence at risk, or (3) it is an offensive job interference, i.e. creating an intimidating, hostile, or offensive working environment. HR: Professional Employer Organization (PEO) - - A current employment trend: Outsourcing human resource functions to a Professional Employer Organization (PEO). PEOs create a co-employment arrangement under which staff are employees of both the association and the PEO. HR: Performance Management - - Three essential aspects of performance management include: 1) goal setting, 2) day-to-day coaching, and 3) performance appraisal. HR: Over-Managing - - Micro-managing by the CSE:
- Over-managing is disempowering to the employee. 2) Hersey's Situational Leadership suggests that employee willingness and competence should determine the level of management needed in a situation. 3) In over- management, it is the CSE's unhealthy need to control that drives the behavior. Legal Term: Due Diligence - - Due diligence is the
Act (COBRA) and pension notifications for affected employees;, consider outplacement assistance;, consider transfer opportunities where appropriate;, and maintain compliance with any applicable collective bargaining obligations. HR: Job Descriptions in Compliance With ADA - - 1) Job descriptions provide evidence of the "essential functions" of the job as described in the ADA. 2) Descriptions can be used as the basis for discrimination, equal pay and contract lawsuits. Minimum criteria: List everything the person will have to do on the job., Distinguish essential major job functions from peripheral ones. Weigh the importance of each function according to percentage of time spent., List the skills, physical demands, credentials and experience required and distinguish between mandatory, preferred or desired requirements., Do not make promises by which you do not intend to be bound. HR: Human Performance Improvement - - HPI serves as an effective means for associations to improve organizational performance by identifying performance gaps at the individual performer level. Risk Management: Indemnification, Ultra Viries, Torts -
- Indemnification - The laws in many states allow nonprofit corporations to indemnify their officers and directors against claims made against them if the claims are based on officers' or directors' activities on behalf of the associations, except in criminal situations or those involving gross negligence or fraud. Indemnification of officers and directors, where the law permits, should be stated in the association bylaws. "Ultra viries" - When officers, directors or other volunteers are involved in association activity beyond the corporate authority of the association. Torts - Activities that cause injury or damage to persons or property. Risk Management: Crisis Planning - - A. Safeguarding staff 1) Work with building management 2) expand safety and emergency policies 3) Collect additional staff contact information 4) Purchase various supplies (Three major categories: medical, survival and protective equipment) 5) Provide staff with additional information (i.e., their own personal emergency kits) 6) Practice safety measure. B. Informing Constituents 1) Enhance information for constituents; 2) Establish special tracking systems - online; 3) Create emergency contact channels; 4) Participate in cooperative efforts. C. Protecting Infrastructure 1) Computers and duplicate server equipment, and network security. 2) Planning for meeting and conference contingencies. D. Increase Financial Flexibility: 1) Allow authorized staff to process payroll remotely at any time; 2) Encourage electronic payments; 3) Arrange for backup payment options; 4) Review insurance coverages. Request For Proposal (RFP) - - A document that details requirements for vendors, including: training, conversion, maintenance, installation; often includes request for information about vendor's: business history, support staff, association experience, Personnel Records: Include - - The following should be included in a basic personnel file: employment application & resume, college transcripts, job descriptions, records relating to hiring and promotion, training, records relating to other employment practices, letters of recognition, disciplinary notices or documents, performance evaluations, test documents used to make an employment decision, exit interviews, termination records. Personnel Records: Do NOT Include - - The following should NOT be in a personnel file: medical or insurance records, EEO or invitation to self-identify disability or veteran's status records, immigration (I-9) forms, child support or garnishments, etc., litigation documents, work comp claims, requests for employment or payroll verification, reference checks. Tech Term: Instant Messaging - - E-mailing in real time, allowing 2 or more people to "chat" through electronic text means. Tech Term: 5 Steps to Strategic Technology Process -
- Develop a technology planning committee, 2) Conduct an internal and external environmental scan, including the association's existing strategic plan, 3) Evaluate potential technology options that are focused on the association's business goals, 4) Develop prioritized strategic technology initiatives, 5) Implement strategic technology initiatives, including: obtain ongoing recognition and support from leadership, ensure that the project manager has the authority & accountability for implementing the initiatives, identify measures of success for each project with a contingency plan in place should the initiative fail to meet expectations, carry forward unused tech funds to the next fiscal year, be sure to
access knowledgeable resources on current and emerging technology. Tax: Charitable Contribution Disclosure Requirements for 501(c)6 orgs - - A "conspicuous and recognizable statement that contributions or gifts to the organization are not deductible as charitable contributions" must be displayed on dues billing invoices or other requests for payments. Failure to comply is a $100 per day per offense. Such a statement must be clearly displayed in the solicitation package or dues billing. HR: Sexual Harassment - Role of CSE in Environment & Policy Issues - - Prevention is the best tool for the elimination of sexual harassment. The CSE needs to provide a safe work environment (co- employees and non- employees) and take steps to prevent sexual harassment from occurring: provide a sexual harassment policy for employees, board members and members, and a mechanism for reporting complaints without fear of reprisal; investigate promptly and carefully all complaints; provide for sexual harassment (sensitivity) training for employees and/or board. Ed: Distance Education - - Any education or training activity in which the instructor and students are separated in time and/or space. Programs may include: online education, videoconferencing and teleconferencing, as well as traditional correspondence courses. Ed: Competency - - A set of related knowledge, abilities and skills that directly affect a major part of an individual's job. Ed: Blended Learning - - Blended learning refers to events that combine aspects of online and face-to-face instruction. For example, setting up an online discussion forum to allow members to interact with a speaker before or after an in-person conference, or offering Web-based classes in combination with traditional certification classes. Ed: Adult Education - - Adults learn differently from children. Adults: have a desire to know what they will gain by learning; want to make their own decision about learning content and process; bring personal experience to the educational process; and want answers and solutions to experienced problems and questions. HR: Employee Assistance Plans (EAP) - - An employee benefit program often found in unionized organizations. EAPs coordinate alternative treatment for substance abuse rehabilitation and recovery as well as other treatment for mental health issues generally when the benefit is self-insured. HR: Disabled Person - - An individual qualifies as disabled under ADA when he/she has a physical or mental impairment that substantially limits one of more major life activities, or has a record of such an impairment or is regarded as having such an impairment. Including, but not limited to: speech, hearing, sight and mental impairments, HIV, cancer, diabetes, limb missing, and recovery from substance abuse. HR: Co-Employment - - Professional Employer Organizations (PEOs) create a co- employment arrangement under which staff are employees of both the association and the PEO. 1) Better benefits (to staff) - PEO is able to give a small staff access to less expensive health insurance and generally better benefits of various kinds. 2) Training resources 3) Employee upkeep - current employee manuals - PEO files workers' compensation. 4) PEO won't tell the employer who to terminate, just how to do it. HR: Flextime - - This practice allows employees to vary their schedules within limits established the association. Usually employers ask staff to set a definite schedule but allow occasional changes. HR: Compressed time - - Employers allow employees to work four 10-hour days, and have one day off each week--or work nine days for 80 hours in a two- week period, with a day off every two weeks. This is a variation on flextime. Member Career Pathway - - Association professional development models are increasingly centered around association career pathways. The education then follows the career needs of its members. Knowledge Management - - Sharing, capturing and using institutional knowledge to provide services to members. The benefits of knowledge management are:
with children; it emphasizes the role of the teacher in designing, delivering, and evaluating the educational process. Governance: Acting in Good Faith vs. Bad Faith - - Ordinarily, one who acts in good faith - using ordinary diligence and care (the reasonable person standard)- will not be found personally liable for debts or responsibilities of the association. Even incompetence or bad judgment is not sufficient grounds for personal liability. Bad faith is based in gross negligence--an intentional disregard that causes injury, violates antitrust laws, or is beyond the scope of authority. Bad faith decisions can incur personal liability. Governance: Transparency - - Transparency involves operating in an open, accountable manner and providing the public with information it can use to evaluate the organization's performance. Governance - - Seeing to it that the organization achieves what it should and avoids unacceptable situations. The Board is the governing body. Dialogue Before Deliberation - - On key issues before the association, the leadership should engage in a dialogue with the members at large, then bring what was learned in that dialogue into the board room for deliberation on the issue. This process will keep the governing body relevant to the membership and keep the membership engaged with the organization. Governance: Sarbanes-Oxley Policies - - While intended for corporate governance, it is recommended that associations adopt Sarbanes-Oxley requirements as effective practices. Adopt document management and employment policies, and take some basic measures to ensure that funds granted or loaned are not misused or embezzled. i.e.: 1) Create an Audit Committee - One member must be a "financial expert." 2) Adopt a code of ethics for senior officers and directors. 3) Establish a document management policy to guide employees in handling and disposing of documents. 4) Adopt a form of employment policy and procedures to encourage internal disclosure of misconduct or mishandling of funds, to ensure that funds are properly handled and that any certification or reports made to funders (especially those administering federal funds) are correct and fairly represent the finances and operation of the organization.
- Conduct internal file reviews Governance: High Impact Board - - Involves 5 key elements: 1. A strategic framework that is clear and detailed. 2. A detailed design of the board's governing work. 3. Standing committees that serve as powerful governing engines. 4. Board self-management and performance accountability. 5. Strong support from a board-savvy CSE. Governance: Gross Negligence, Fraud & Honesty - - At any level of the association, fraud includes misappropriation of association funds or authorization of association payments for personal gain. Gross disregard for one's responsibilities constitutes "gross negligence". Staff is usually shielded from personal liability but fraud and dishonesty are exceptions. Directors and Officers insurance will generally protect the Board from these claims. To protect itself from staff fraud (embezzlement), the association should invest in an "employee fidelity" bond. Governance: Actual vs. Apparent Authority (law/case) -
- The Hydrolevel case applied this concept to volunteers as well in that an association is strictly liable when it fails to prevent antitrust violations through the misuse of the association's reputation by its agents, including members who are only unpaid volunteers or lower level employees. See Chapter 58 in Association Law Handbook for more information. Governance: Actual authority - - If a chapter has actual authority, the national or international organization, along with the chapter, will be responsible for obligations incurred. Governance: Apparent authority (as it relates to parent/chapter relations) - - May be inferred by a third party where the national organization permits the chapter to behave as if it has actual authority. Governance: Apparent authority (relating to employment and antitrust) - - An employer can be responsible for authorized wrongdoing of an agent, such as an employee, even if the agent only appears to be authorized. Legal Implications of Electronic Governance - -
Where state nonprofit organization statutes allow the use of electronic media in association governance, i.e. voting electronically or by fax, the extent to which such use is permitted varies. The use of electronic media in association governance must be consistent (or "must not be inconsistent") with the association's articles of incorporation or bylaws. Insurance: Directors & Officers Liability - - Management or governance errors and omissions coverage that provides help in the event that a board, director or officer is accused of mismanagement of the organization. Provides a source of funds to cover legal costs and judgment and settlement fees associated with certain types of lawsuits naming board members as individuals. Hierarchy of Documents - - Articles of Incorporation, Bylaws, Policies, Procedures, Practices Governance: Shared Values - - Governance decisions should be based on the shared values of the voting body. Shared values can only be determined through deliberation. Decisions should be based on the value of the common good, rather than the individual or self-serving agendas often found on a board. Governance: Articles of Incorporation - - an agreement between the association and the state defining the organization's legal purpose and its tax-exempt status; Articles establish the legal basis for the organization's existence. Governance: Bylaws - - an agreement between an association and members, defining who can participate in the association and how they participate. Member eligibility and classes, officers, standing committees are key provisions found in the bylaws; it is second in the hierarchy. Governance: Policies - - set parameters or specific mandates for action and decision-making. The Board's policy manual is the third document in the hierarchy, followed by Board minutes of the organization. Governance: Procedures - - are step-by-step processes detailing how to accomplish tasks in the organization. Procedures are operational in nature and not considered governing documents. Governance: Practices - - are ways in which organizations do things that are not documented in policies and procedures. Special Interest Groups (SIGS) - - A group or organization (but not an association) that operates with a limited amount of autonomy and has jurisdiction over an area of professional or business interest. Special interest groups (SIGs) within an association may also be called membership sections. "Special Interest Group" is a term often used by the general public to refer to organizations with political action committees (PACs) who attempt to influence elections or legislation, including associations. Positioning: Relevance - - Thriving associations have the strong desire to create flexible structures and processes of governance and to change governance as needed to meet changing environments. To reach that position, associations need to create a unique and sustainable reputation for value among members, customers and stakeholders. Parent/Chapter: Control of Membership Requirements -
- The national or international organization should retain some control over the local organization's membership requirements to ensure chapter procedures do not violate antitrust laws. Organizational Components of Volunteers - - Standing Committee performs a continuing function and operates indefinitely, such as the education or nominating committee, and is established in the association's bylaws. Special or Ad hoc Committee is organized with a specific objective or problem and is usually disbanded when its work is completed. A Task Force is a form of special committee with a defined time span. Special interest group (SIG), section or council is a group within an association that operates with a limited amount of autonomy and has jurisdiction over an area of professional or business interest. (Note: Many National and international organizations refer to their chapters or state and local affiliate organizations as "components.") Tax-exempt Status: 501(c)6 Criteria To Qualify— Limitations - - Must be primarily (more than 50%)
functional areas of an occupation or profession, i.e. your state Society of Association Executives that offers membership to CSEs, legal counsel, staff specialists in all functional areas, as well as administrative assistants. Types of Organizations: Horizontal - - serves one functional level of an industry or profession. Types of Organizations: Federation - - association composed of a group of other associations representing professionals, businesses or industries with a common interest. Types of Organizations: Reciprocal/Unified - - where membership to one organization automatically allows privileges to another organization in another geographic area. Types of Organizations: Combination/Conglomerate -
- where there is a combination of individual & corporate members. Types of Organizations: Contingent - - an arrangement between an organization and its chapters that requires members to belong to two or more levels. Government Relations - - Associations often advocate the views of members by making those positions known to legislators and regulators. It is common practice for associations involved in government relations to develop a formal procedure that involves input from the membership, channeled through a government relations committee. Program goals and objectives should be concisely stated, measurable and based on thorough discussion and approval by the board. Monitoring legislative and regulatory activity, holding legislative conferences, grassroots lobbying, issue management and hiring a lobbyist are all techniques employed in government relations programs. Another technique is the "plant visit," which gives legislators a hands-on experience of a member's plant and working environment. Coalition - - An alliance that forms for lobbying or public relations purposes. Associations broaden their reach by including organizations with interests that run parallel with their own or that converge in some areas. Coalitions may require little financial commitment or may be underwritten by one or more entities that have an interest in a particular issue. The goal of a coalition is to unite voices and make the coalition interests known over the din of many other groups clamoring for attention. Advocacy - - Advocacy is the act of leveraging influence or attempting to influence a decision-making body on an issue of importance to your organization. Advocacy usually relates to leveraging influence in a legislature or moving the general public to action. Types of Organizations: Volunteer-Driven - - In a volunteer-driven organization, volunteers make basic decisions about the direction of the association and allocation of resources; volunteers have veto power over most programming decisions and have a direct impact on budgeting decisions. Types of Organizations: Staff Driven - - In a staff- driven organization, volunteers serve in more of an advisory capacity as staff makes most programming and budgeting decisions. Volunteers have little impact on day- to-day operation and focus on longer-range, strategic issues. Types of Organizations: Balanced Mode - - In a Balanced Mode, staff is responsible for day-to-day operational-related matters and volunteers are responsible for governance and other member-related matters. Lobbying by 501(c)3 Associations Lobbying - - Most tax experts say a 501(c) 3 that spends less than 5% of its operating budget for lobbying purposes can generally be safe. It is always advisable for a 501(c) 3 organization engaged in lobbying to make a lobbying election under section 501(h) of the IRS code. Section 501(h) establishes a sliding scale of permissible lobbying amounts for direct and grassroots lobbying. The lobbying limit is 20% or less during a four-year period. If the lobbying limit is exceeded, the organization will lose its exempt status. If the lobbying limit is not exceeded, there is no tax imposed and no threat to exempt status. Issues Management - - Issues management is a legislative or regulatory PR campaign where you wish to influence and manage public opinion regarding a controversial issue. The process includes: defining a specific goal, i.e. passing a legislative bill, crafting a clear
message, identifying the audiences you wish to influence and crafting a multi-faceted campaign to effectively reach those audiences, assessing the momentum, and responding to public criticism of the issue in a clear, consistent, and persistent way. Legislation - - an action with respect to acts, bills, resolutions or other similar items of a legislative body. Legislative Body - - Congress, state legislatures and other similar governing bodies who make laws for the general public. Lobbying - - an oral or written communication with members of congress, congressional staff and aides, cabinet secretaries, political appointees or senior executive branch officials with respect to legislative or administrative matters. Lobbying: Non-Lobbying Activities - - Non-Lobbying Activities (See p. 221-222 Association Law Handbook for the list), Communications published or disseminated to the public;, administrative requests for information;, participation in a federal advisory committee;, providing testimony before a congressional (sub) committee in response to an official request;, written responses to a covered official's request for specific information;, legally compelled communications, i.e. a response to a subpoena;, comments responsive to notices of proposed rulemaking;, statements made in the course of judicial or administrative adjudications;, requests for agency action on the public record;, any communications made on the record in public proceedings;, communications made on behalf of foreign governments or political parties;, communications that the communicator could not report without disclosing information illegally;, communications that the government is legally required to keep confidential. Lobbying: Expense & Tax Deductibility - - Organizations may use any reasonable method to allocate costs between lobbying and other activities. A method is only reasonable IF it: is applied consistently, allocates a proper amount of costs to lobbying, and is consistent with certain special rules contained in the regulations. Under the estimation rule, lobbying organizations must notify members at the time of dues assessment or payment what percentage of member dues are estimated to be nondeductible because of anticipated lobbying expenditures. Under the allocation rule, lobbying associations must allocate on a dollar-for-dollar basis, all expenditures for federal and a state lobbying against dues and similar income received by the association. Proxy Tax is an election where associations pay a flat 35% excise- type tax on their lobbying expenditures and avoid having to notify members of dues nondeductibility. Lobbying: Attempting to Influence Legislation - - Making any communication with a member or employee of a legislative body or government official or employee who may participate in the formulation of legislation that: (1) refers to specific legislation and reflects a view on that legislation, or (2) clarifies, amplifies, modifies, or provides support for views reflected in a prior lobbying communication. Lobbying Expense: Omnibus Budget Reconciliation Act of 1993 - - OBRA 93 eliminated the business tax deductibility of lobbying expenses and required associations to notify members as to the portion of their dues that are nondeductible as a result of the association's lobbying activities. As an alternative, associations may pay a 35% proxy tax on their lobbying expenses. The law imposes significant recordkeeping requirements and administrative burdens on associations. Lobbying: De Minimus Rule - - Associations may treat time spent by staff on lobbying activities as zero if less than 5% of the person's time is spent on lobbying activities. However, any time spent by an employee on direct contact lobbying may not be accepted under the de minimus rule. Direct contact lobbying includes travel time related to the lobbying. Lobbying: Contact vs. Lobbying Activity - - A "lobbying contact" is any oral or written communication made on behalf of an employer or client to a "covered legislative or executive branch official" regarding any of several subjects, including: formulation, modification, or adoption of federal legislation, including: legislative proposals or regulatory rules, policies or executive orders, the administration or education of a federal program or policy, or the nomination or confirmation of any person who requires Senate confirmation. A "lobbying activity" is any action taken in support of a "lobbying contact", including: planning and preparation, research intended for use in the contact, and coordination with other lobbyists.
