Editor’s note: This commentary is by Don Keelan, a certified public accountant and resident of Arlington. The piece first appeared in the Bennington Banner.
[T]he Vermont’s Attorney General’s Office will be publishing a 17-page handbook titled, “Understand Your Responsibilities,” subtitled, “Guidance for Board Members of Charitable Nonprofit Organizations in Vermont,” and available in late October.
According to the publication’s introductory letter by Vermont Attorney General Bill Sorrell, the publication is the product of two of his assistant attorneys general, Wendy Morgan and Todd Daloz, with additional assistance from Linnea Myers.
Attorney General Sorrell notes the following in his letter:
“A good board provides leadership, vision, and wisdom to guide the nonprofit. But all boards have certain legal duties they must fulfill. The Attorney General is charged with ensuring nonprofits work for the public good, use charitable funds to further their missions, and act in accordance with Vermont law.”
In a recent inquiry by this writer to the Vermont’s Secretary of State’s Office, where all nonprofits must be registered, a representative noted that there are 14,313 nonprofits on file with his office. Of that total, 2,029 are carried as being terminated and 5,028 are listed as being inactive, leaving a total of 7,256 active nonprofits in Vermont. These figures do not account for school boards, town boards, or other municipal and religious entities.
The authors did not back away from some of the issues that boards throughout Vermont must address – such as uncommitted board members and the related problems that can arise.
To place the number of active Vermont nonprofit organizations in perspective, there is approximately one nonprofit for every 68 Vermont residents. On a national basis, there is one nonprofit for every 220 Americans. It has been noted elsewhere that Vermont has more nonprofit organizations per capita than any other state.
Whether such a statistic is a positive or negative matter is not relevant, for now. What is important is that the state agency that has the responsibility of overseeing the sizable number of nonprofits has taken a positive step in addressing the responsibilities of those who have the duty to carry out their organization’s mission.
In Vermont, the law mandates that every nonprofit have, at a minimum, three board members and generally there might be an average of 10. The math is clear – tens of thousands of Vermonters are presently serving on nonprofit boards (could be some duplication). And while the vast majority of them do so because of their dedication to their organization’s mission, I venture to say that a fair amount have no idea of the legal responsibilities that they assume when they become a board member. And for that reason alone, the Attorney General’s publication of the guidelines will be helpful.
The introduction to the report notes (from 2010 data) that the Vermont nonprofit sector is a significant factor in Vermont; it makes up about 14 percent of the labor force, manages close to $8 billion in assets, and contributes close to 19 percent of the state’s economy with annual revenues of over $4 billion – almost all of this is managed by volunteers.
To assist current and potential board members, the report is divided into six sections: Understand the Terms, Understand the Commitment, Understand the Board, Understand Your Duties, Understand Operations, and Understand Fundraising. The guide, which is authored by attorneys and highlights the legal issues, does address many of the practical points encountered by board members.
The authors did not back away from some of the issues that boards throughout Vermont must address – such as uncommitted board members and the related problems that can arise.
This guidebook is an excellent first step on the part of the Attorney General’s Office and has been long overdue. While there are a number of publications on how to be a board member, it is encouraging to see the AG’s office provide a publication on the subject. It is especially important when the nonprofit sector has such an enormous impact on Vermont’s economy and the lives of many, who are dependent on the continued success of the nonprofit organization.
