Editor’s note: This op-ed by Don Keelan, a retired accountant who lives in Arlington, first appeared in the Bennington Banner.
According to GuideStar, the reporting service for non-profit organizations, there are approximately 1.8 million non-profit organizations registered with the IRS. In 1997 the comparable number was approximately 950,000. About 8,000 such organizations are on file with the Vermont Secretary of State’s office.
Many of Vermont’s non-profits are categorized under Internal Revenue Code Section 501 (c) (3), Public Charities. There are 36 other sections of the Code that provides tax-exempt status for example — 501 (c)(13) Cemetery Companies, 501(c)(10) Crop-Financing Corporations and so on.
It was recently reported that non-profit organizations make up approximately 10 percent of U.S. employment, and are, by any measure, a significant economic force. And for this and other reasons, Congress, the IRS and various state attorney’s general offices are beginning to pay closer attention to the means by which non-profits are being governed.
If each Vermont organization (excluding municipal and government organizations) has on average 10 board members, there could very well be close to 80,000 Vermonters serving on boards, not withstanding the fact that some may be serving on multiple boards.
I believe it is safe to note that many board members of non-profits do not have a comprehensive understanding of what is expected of them in their capacity of being on a non-profit board. And even more disturbing is the possibility that board members don’t really understand what Vermont law requires of them.
In May of 2009, the National Business Institute sponsored a seminar on “How to Keep Tax-Exempt Organizations in Compliance.” Kathleen M. Poe, an attorney provided some helpful hints for board members. Her remarks were that board members should attend meetings as well as execute board assignments. And for those board members who don’t show up for meetings and just want their names listed on the organization’s letterhead, they should take note.
Another potential breach of the Vermont Non-Profit Corporation Act is failure to maintain the confidentiality of board matters. In a nutshell, what is discussed at a board meeting stays at the meeting. “Loose lips” may not “sink” an organization, but it can be quite divisive.
There are other statute provisions which I believe are common sense: Prepare for board meetings by reviewing material provided prior to the meeting. Also, participate in decisions. Of course, for each of these one must show up for the meeting.
What I see as a major flaw of board members, and the basis for acute frustration to non-profit personnel, is board interference in operations. To avoid this, board members should only become involved in an organization’s operations when specifically invited to do so — not when he or she feels it’s their desire.
Notwithstanding the effort being made by Marlboro College, and more recently by the Northshire Non-Profit Network, locally there is little formal training of board members. This is especially troublesome given the number of boards as well as board members here in Vermont and especially in Bennngton County. Not many board members have attended classes that addressed their role as board members or how a board member should function in such a role.
In the absence of any formal training, I believe it is incumbent on all boards to provide a new board member with a board mentor. The mentor’s role would be to educate the new members on board governance, the organization’s mission, as well as be available to answer the new member’s questions. Just having a “warm body” at the board table is not a substitute for having an effective board member.
To serve as a board member is an honorable calling. However, it does not need to be a frustrating assignment that lasts for years. No one, no matter how civic, culturally or historically minded wants the unintended consequences of aggravation that often times emanates from board service — or worse, take on a liability.
With major cuts in government services, the non-profit sector will only grow in its attempt to fill the vacuum. This, combined with the scarcity of those with time to serve, requires all boards to visit its governance and board training policies and practices.
What a wonderful gift non-profits receive — services from a dedicated group of citizens. So why not make it an enjoyable and productive experience — for the organization and its board members?
