Board Cafe

Short enough to read over a cup of coffee, Board Café has everything you need and want to know to help you give and get the most out of board service.

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A Board Member's Guide to Nonprofit Insurance

Many board members don't think about the organization's insurance until something adverse happens. As one Blue Avocado reader commented: "Insurance isn't sexy, but it's as essential as a roof over your head." In these tight times, it's tempting to make insurance a low priority, but this strategy can be penny wise and pound foolish. Blue Avocado asked Pamela Davis, president and CEO of the Nonprofits Insurance Alliance Group (and a Blue Avocado Steering Committee member) to give us the low-down on liability.

Q: Pamela, what are the most common insurance claims against nonprofits? How much do they end up costing?

Pamela: Almost all of the claims -- 90 percent-- reported by nonprofit . . .

Closing Down the Right Way

When nonprofit boards have to shut down ("dissolve") the organization, they often find themselves swimming in a sea of unpaid bills, demanding creditors, frustrated and anxious staff, and desperate clients. Going broke -- like other things in life -- can be done poorly or well. Managing insolvency well can mean that client or patron services are not disrupted, that staff are given assistance in their job transitions, or that creditors can receive some satisfaction. Here are some steps for boards considering dissolution:

  • Identify your legal and contractual obligations. Consult a lawyer to help you plan and implement the dissolution (there may be one willing to help on a free -- pro bono -- basis). Are there government contracts that must be fulfilled? Are there building or equipment leases in place? Do you have any restricted money or assets which must be returned to

Thinking the Unthinkable: Maybe We Should Shut Down

When we think about the important work we do at nonprofits, it's hard not to think that closing down is the ultimate disaster. But sometimes a lack of money or energy raises the question for us. Here at Blue Avocado, where we turn things on their heads to get a fresh look, we believe that just thinking about closing can be freeing: a chance to re-think not only our organization, but how best to utilize the human and other resources we have. When an organization becomes a heavy burden for staff, the board, and volunteers, it's time to look at options. It's very hard to break the ice on a board and open a discussion about closing down. The nonprofit board of directors is responsible for the organization's future: whether to grow, change, downsize, merge, evolve, or close. And although nonprofit board members don't have personal financial stakes in the organization, they have invested their time, their energy, their financial contributions, and their hearts. At the same time, few nonprofits are destined to thrive for centuries . . . there may

How to Take a Public Policy Stand, with sample criteria

When the Colorado Recycling Center was approached to endorse the No Child Left Inside legislation, they didn't know WHAT to decide, but they know HOW to decide (see what they decided at end of article). They already had a procedure in place for deciding what public policy stands to take. But most nonprofits aren't as prepared:

Would it support your cause or help your constituencies if your organization took an official stand on a public policy issue? Is it legal to do so? And how would you do it? Your board may be thinking of taking a stand on an international issue, on FDA regulations, on public school policies on students with disabilities, on a proposed hospital closure, on pending legislation, or on whether dogs should be allowed in a local park.

The worst time to decide on how to take a policy position is when you actually have an issue in front of you. If the board has to decide two things at the same time: how to take a stand, and whether to take a particular stand, the discussion can easily be confusing and argumentative.

We'll look first at a sample procedure for how organizations take stands, then offer a questionnaire that one organization uses when asked to sign onto letters, and finally, provide some links to additional information.

First, is it legal for a nonprofit to take a stand on a policy matter? Answer:

Should the Board Hold Executive Sessions?

Nonprofit boards are often criticized for a lack of vigor, being subservient to their executive directors, and for weak evaluation of their chief executive. The need for frank and informal discussion about staff performance, and the importance of the board developing a sense of itself, are just two reasons why many boards hold executive sessions.

An executive session is a meeting (or part of a meeting) of the board without staff present. In some cases an attorney or other advisor may be present, but not staff. Executive directors are often sensitive to the idea of executive sesions because that think that important matters necessitate imput from them (and they just don't like the idea -- period!).

Because one the board's chief responsibilities is to assess the performance of the agency and its executive director, boards often need to discuss sensitive . . .

Boards of All-Volunteer Organizations

Volunteerism is an enormous economic force, yet it is never mentioned in business school or in economics departments.

--Walter Hoadley, former Chief Economist for the Bank of America

All-volunteer organizations (AVOs) are a major social and economic force, but are seldom given credit for their work. Through all-volunteer organizations, people conquer alcoholism, clean up beaches, care for the dying, coach basketball teams, advocate for gun control, rescue abused animals, raise their voices in song, publish literary journals, raise scholarship funds, preserve local history, serve as volunteer fire departments, organize protest marches, exchange heirloom seeds, host visitors from foreign countries, change public perception about the disabled, help adoptees and birth parents find each other, and in thousands of ways make our communities work better.

That these and countless other services are provided by volunteers and not by paid staff would come as a surprise to many. All-volunteer organizations are nonprofits where volunteers manage the organization and do most or all

Board Meetings by Phone: Legal? A Good Idea?

With gas prices rising and everyone getting busier, more and more board members want to participate in board meetings by telephone. The advantage: more people participate. The disadvantage: there's a lot lost in human interaction for both the board member and the board-as-a-whole when the meetings aren't face-to-face. Consider this policy: a member can attend by phone only twice per year, and new board members can attend by phone only after they've been to at least three meetings in person. Some boards don't permit participation by phone at all. If you do decide to have some people phoning in to meetings, don't just use the speakerphone option on a regular phone. Invest in a dedicated speaker phone with "duplex features" so that sound can travel both directions simultaneously and everyone can actually hear.

What are the laws on board meetings by conference call?

Such matters are regulated by states (not the federal government) but . . .

What Should Boards Know About Insurance Brokers?

Considering how insurance costs typically constitute a sizable chunk of a nonprofit budget, this significant cost is remarkably un-examined. A key part to getting the lowest costs, the best coverage, and the best service is getting the right insurance broker. But what exactly is an insurance broker and what do they do? What should we look for in a broker? How do we find a good one?

To find out we asked Pamela Davis, founder and president of two major nonprofit insurance companies-- Nonprofits' Insurance Alliance of California (NIAC) and Alliance of Nonprofits for Insurance, Risk Retention Group (ANI-RRG).

Blue Avocado: Pamela, to start with: What is a broker, anyway, and how are brokers different from insurance companies?

In Search of Unicorns: Finding and Hiring Outside Grantwriters Part 2

In Part 1 of this article, Wes Mukoyama of Yu-Ai Kai asked the question: "As a small agency . . . how do I look for a grantwriter? I have talked to a few who either want to be paid by the hour or receive a percentage of the grant. Any suggestions?" We discussed why hiring outside (contract) grantwriters seems to work so seldom - either for the community nonprofit or for the grantwriter. We also suggested two additional choices: hiring support staff to free up your program managers and executive director to write grants, and growing your own grantwriters.

In this issue's Part 2, we'll discuss how to find grantwriters, select them, how much to pay them and what kinds of payment arrangements to choose. (And in Unicorns Found, we profile two of these elusive creatures.)

A. How to find one


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