Nonprofit Knowledge Matters | The Compensati​on, Benefits, and Employment Issue

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The common sense of compen$ation When questions about a nonprofit leader’s exceptionally high salary make the front page of the paper, we wince. A single nonprofit is being criticized for being an outlier, but it feels as if all charitable nonprofits and their values are being questioned. At the National Council of Nonprofits we are frequently asked, whether by the media, curious nonprofit staff members, or well-intentioned board members, how to determine what the appropriate compensation is for nonprofit staff.   The answer is, “it depends.” The legal process, promoted by the IRS, is to task the board or convene a group of board members (but not anyone employed by the nonprofit) to compare the salary and benefits of similar positions at similarly-sized organizations in your nonprofit’s geographic area, serving a similar mission. The process should be documented. A written description (such as in the minutes of a meeting) of what data was reviewed, and who was involved in the process, can protect the nonprofit and its board of directors from IRS penalties, in the unlikely situation that the IRS would find that the nonprofit approved compensation that was “excessive.” (Our website resources go into more detail about the process recommended by the IRS.) Of course, nothing can completely insulate a nonprofit from media scrutiny, but following the IRS “comparability” process, and taking pains to document all the research that went into approving compensation levels, offers protection against allegations of unreasonable conduct.   Comparing apples to apples, and proving that you did, is common sense, but it’s often hard to nail down data to use for the comparison. And the more practical question that comes up whenever a nonprofit is attempting to fill a position is: what salary level is attractive to candidates, but simultaneously won’t derail the nonprofit’s budget? Determining the appropriate salary and benefits for staff leaders is time consuming, but taking the time to “get it right” will make the hiring process more efficient and ensure that your nonprofit is attracting and retaining the talent it needs to advance its mission.   Read on for some ideas that may help     How many people work for nonprofits in the United States? Here’s a conundrum: As we often point out, the federal government can tell us how many heads of lettuce were grown in the US in a given year, but not how many heads of people were employed by charitable nonprofits! However, the charitable nonprofit community is a bit closer to having the data we need to show our clout and significance as an economic force in the workplace. According to recently released data from the U.S. Bureau of Labor Statistics (“BLS”) covering years from 2007-2012, there were at least 11.4 million people employed by nonprofits in 2012, which amounts to 10.3 percent of all private sector employment. (The actual number is higher since the data were based only on employer-units that participate in state unemployment programs, and many nonprofits opt-out of government programs, preferring to follow a private insurance route.) This BLS data revealed that of the nonprofit employees identified, their wages amounted to $532 billion, or 9.8 percent of total private sector wages! BLS made this data available in response to repeated requests from the nonprofit community. The BLS is now seeking input from nonprofits on the methodology of the research, the usefulness of the data, suggestions for future data products, and – most importantly – whether it should continue to release this information, so that the public can benefit from it. The National Council of Nonprofits believes this information is vitally important to nonprofits (which is why we have long included this provision in our annual Public Policy Agenda: “… governments have a responsibility to collect and disseminate nonprofit employment and economic data that identify the impact of nonprofit organizations in their jurisdictions”). Please join us by contacting BLS officials to thank the government workers who rolled up their sleeves to make this data available, and tell them how important it is to your nonprofit so they will continue to release this public information that the federal government already collects. If you have questions about the data, or suggestions on how to improve the usefulness of the data, or the process of obtaining datasets, please also let BLS know.     What’s new in health insurance benefits? Nonprofits that utilize the small-employer health credit to help pay for employee health insurance coverage will see a 7.3 percent reduction next year as the result of the automatic, across-the-board spending cuts known as “sequestration” that were enacted in 2011. The shrinking health credit is only one of thousands of arbitrary cuts that can adversely affect the work of charitable nonprofits. According to the IRS, these and other cuts will occur “unless and until a law is enacted that cancels or otherwise impacts the sequester.” In December 2013, House and Senate budget negotiators reached an agreement to avert another round of sequestration cuts, but that deal expires in 2015. White House officials revealed in October 2014 that President Obama will propose sequester relief in his fiscal 2016 budget due to be released in February 2015. That’s a long time to wait! Please help us help you by sharing your story about the small business health care tax credit with us. Thank you!   For information and special access to health and other types of insurance coverage tailored for nonprofits, such as Directors’ and Officers’ insurance, connect with your state association of nonprofits.     Before your nonprofit hires a professional fundraising firm – CAUTION! $1 million+ in penalties was assessed against a Minnesota fundraising solicitation firm that contacted potential donors in South Carolina with “robo” calls, without registering with the state. Did you know that the majority of states require nonprofits to register BEFORE soliciting a single contribution? Your nonprofit is not off the hook for registration if it is not the one making calls to prospective donors directly or sending out direct mail pieces. Moreover, if your nonprofit is directing potential donors to an online portal (such as Paypal or others) that processes donations, your nonprofit may still be required to register in various states. We recommend that you know your state’s charitable solicitation law and are also aware of state laws in other states where your nonprofit is soliciting contributions. Here is a 50-state fundraising compliance guide. (This guide is not legal advice and was created by Harbor Compliance.)   The “lesson learned” is that nonprofits can be responsible for the actions of their employees, and also of independent contractors they hire. As a result, it’s a good idea to set the limits of authority and define responsibilities for independent contractors in a written agreement with them. See our resources about independent contractors.     Q: Where can I find comparability information about salaries and benefits for nonprofits in my area? A: Many state associations of nonprofits offer salary and benefits reports that are state-specific. Related resources are available on our website.   Q: May interns receive a stipend? A.  If you are not careful, that stipend can turn a volunteer intern into an employee who is owed minimum wage. Read about compensation for interns.   Q: We need to downsize a program and thought that one solution would be to make one of our employees a consultant instead. Any risks? A. It will be important to analyze whether the employee you are downsizing truly meets the definition of a consultant, otherwise your nonprofit could face penalties and back wages. Blue Avocado explains this issue.   Top 10 Nonprofit Employment Mistakes  (Siobhan Kelley, J.D, NonProfit Times)   5 steps to help you decide what salary to pay your employees (Small Business Administration)   Who’s an employee and who’s an independent contractor – and why it matters (National Council of Nonprofits)   Your Voices Last month, we asked if your board monitors the impact of public policies on mission delivery and resources? Here's what you said:       New Resources from the National Council of Nonprofits What does it cost to deliver a nonprofit’s mission? #OwnYourOwnCosts   Worth Reading Two words that change how people think of you: “Thank you” With thanks – Gratitude can win you new friends. (UNSW Australia)   The Paradox of Generosity (Smith and Davidson, Oxford University Press 2014)   Overcoming the nonprofit starvation cycle – A conversation with Ann Goggins Gregory, interviewed by Nell Edgington (Social Velocity blog)   The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions By Steve Zimmerman and Jeanne Bell (Jossey-Bass 2014)     Share this newsletter with your staff, board, and nonprofit colleagues         Did you receive this email from a friend? Sign up now to receive this free e-newsletter each month.

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New Webinar for Spring & Summer

Know Thy Self: Assessing Organizational Readiness When Taking on the World of Restructuring [Lunch & Learn Webinar] Presented by Doug Sauer, CEO, New York Council of Nonprofits, Inc. Tuesday May 7th, 2013    11:00am to 12:30pm    Register Now      Affiliation discussions are a discovery process - uncovering and clarifying motivations, interests, organizational facts and circumstances, strengths and weaknesses. It is a process where potential partners learn about each other and yes, learn about themselves as well. Successful affiliation talks depend largely on each party being prepared, as transparency starts internally first. The more clarity your board and staff leadership can get as to the organization's true operational, fiscal, and "mission" health, the better positioned the organization will be in type of restructuring or collaboration. This webinar, led by our seasoned restructuring expert, Doug Sauer CEO, will guide attendees as to the questions that you should first ask yourselves and then extend to your potential partner.

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Explore Employee Benefits that You Can Afford! May: Spotlight on  Flexible Spending Account Program (FSA) and Life Insurance Programs  We know that the Employe Benefits "Market" can be complicated.  Our job is to help make that world more simple, and affordable for nonprofits. To help you understand each type of benefit, it's coverage features and it's costs we are rolling out a series of short 30-minute webinar spotlights on our administered programs: Health Insurance,Flexible Spending Accounts and our Vision Program - which is new for 2013!   Up next... 5/9/2013 Flexible Spending Account Prgm thru NYCON [Webinar] 5/23/2013 Life Insurance Program Spotlight [Webinar]

Social Media Myth Busting: If You Build It, Will They Come? [Lunch & Learn Webinar] Presented by Andrew Marietta, Regional Manager, Central NY Office, NYCON and Valerie Venezia, Vice President, Membership & Marketing, NYCON June 14th, 2013 11:00am to 12:30pm  Register Now Sometimes it seems like there's a new hot social media tool launched every day of the week. Figuring out what these tools do, how our nonprofit should use them, and frankly, if you need to use these tools can boggle anyone's mind. As busy nonprofit staff and board members we need to know what specific tool do we use for our specific goals? How do we measure success? This webinar will help cut through the clutter of social media mayhem and help you simplify, refocus, and target social media tools based on organizational needs and a focused message (and maybe even some actual metrics!)   Register Now

The Two Good (& Short) Webinars You May Have Missed this Month...

Last week NYCON hosted and recorded two very short, informative webinars on two very different topics. These were two great webinars that you (probably) missed. Take a few minutes and check them out when it's convenient for you!  First, our Dental Program Spotlight:  NYCON's most popular (and very affordable) employee benefit, this program provides two optoins, comprehensive coverage and a array of providers to choose from. Take a few minutes and listen to Eric Laughlin of CS Plus give a quick overview of how the program works, what it covers and how much it costs. CLICK HERE. DoGoodBuyUs Corporate Member Spotlight:Does your nonprofit have great goods to sell? Are you looking for an online marketplace to help you spread the word? Check out the 20 minute Corporate Member spotlight we did with Zach Rosenberg, Founder of DoGoodBuyUs.CLICK HERE.

News from NYCON

Just Like the Tournament, the Camp Finance Discount is Almost Over! Register Before April 7th to Save...  Register Today  Are you still feeling the March Madness? The Camp Finance Team at NYCON still is... and we want to make sure the people who are "mad" about Camp Finance can save on their early registration. From now through the end of the  "Final Four" (April 7th) you can get a $50 discount on paid Full Conference registration for Camp Finance. Just click here and enter discount code"MarchMadness" to get $50 off of your paid Full Conference registration (Sorry, no discount applies to Day Trip Registration Rates.)    Looking forward to seeing you on the mountain!  Please note: This discount offer applies to Credit Card Online or Pay By Phone Orders Only. If you prefer to have our Staff take your payment and registration via phone please contact Amber Vanderwarker at 1 (800) 515-5012 ext. 126.    We've Got ANI!  Welcome our Newest Conference Sponsor ANI is an insurance company governed by nonprofits themselves.  ANI is a 501(c)(3) tax-exempt nonprofit that is governed by other 501(c)(3) tax-exempt nonprofits. They aren't just a "program" of an insurance company that specializes in nonprofits. Insuring nonprofits is their entire mission.

Explore Employee Benefits that You Can Afford! Spotlight on our Affordable Dental Program for Employees, Volunteers & Board Members April 11th, 2013 10am We know that the Employe Benefits "Market" can becomplicated.  Our job is to help make that world more simple, and affordable for nonprofits. To help you understand each type of benefit, it's coverage features and it's costs we are rolling out a series of short 30-minute webinar spotlights on our administered programs: Health Insurance,Flexible Spending Accounts and our Vision Program - which is new for 2013! Up next... 4/11/2013  [Benefit Spotlight Webinar] Dental Insurance Plans & Administration through NYCON  Stay tuned for Flexible Spending Account &  Life Insurance Webinars...

DoGoodBuyUs! [Corporate Member Spotlight] Thursday, April 11, 2013 from 2:00 PM to 2:30 PM (EDT) Online - Call And Login Information Will Be Sent To You 24-48 Hours In Advance Of This Workshop REGISTER NOW

At DoGoodBuyUs (http://www.dogoodbuy.us) they believe    consumerism can change the world so, they created the largest marketplace of charity made products.  With each purchase, 50%+ proceedsare dedicated to fighting poverty, hunger, disease, environmental degradation and other life-threatening ills around the globe! As nonprofits around the country look for ways to bolster their fundraising, 100's have turned to DoGoodBuyUs as a way to bridge the gap between causes and the consumer market. DoGoodBuyUs works with nonprofits around the world, helping them sell the products they (and now we) have created. DoGoodBuyUs is the newest Corproate Member* of NYCON. On this spotlight webinar you will learn:   Why products have become a successful part of many nonprofits revenue generation strategy How to get started, what the process is like, services offered and more.. The long term benefits Join us on April 11th at 2pm for a quick 30 minute overview on just how DoGoodBuyUs can Do Good by your nonprofit & community. *Please note that this company is NOT a NYCON Endorsed Corporate Partner.

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Building a Powerful Grants Calendar [Lunch & Learn Webinar] Presented by Cynthia Adams, Founder, Grantstaion.com Friday, April 12, 2013 from 10:00 AM to 11:15 AM (EDT) Call And Login Information Will Be Sent To You 24-48 Hours In Advance Of This Workshop Register Now

This webinar will take participants through the process of establishing a grants calendar for the next 12 to 18 months. Fast-paced, and filled with action steps, Cynthia Adams will discuss how to design and adopt a Grant Decision Matrix before beginning the process of building a specific grants strategy for each project. All participants will also receive a set of worksheets that they can use to create their own approach to building grants calendars and grants strategies for their organizations. This webinar is for beginning, intermediate and advanced grantwriters.

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NYCON Membership Benefits Orientation [Webinar] Good for Prospective, New & Returning Members! April 18th, May 17th or June 14th - Your Choice Register Now

In our "Get to Know Us" Sessions, NYCON staff will tell you a lot more about our membership benefits - and answer all the questions you have regarding our process, costs and what you get for FREE.  We will be talking about these benefits. Nonprofit Training, Education and Professional Assistance NYCON empowers our members with the best practices, policies, and procedures as well as information on ever-changing regulations, funding, accountability and more.   Cost Savings Solutions for Nonprofits NYCON leverages the purchasing power of thousands of nonprofits to bring you economies of scale on everything from Office Supplies to Fundraising Software.   The Nonprofit Voice in New York State NYCON represents our members on the local, state and national level, giving voice to small and medium sized nonprofits everywhere.   Register Now

Creating a Strategic Culture: Going Beyond Planning [Lunch & Learn Webinar] Presented by Susan Weinrich, VP of Organizational Develoment Services, NYCON Friday, April 19, 2013 from 10:00 AM to 12:00 PM (EDT) Call And Login Information Will Be Sent Via Email Register Now Developing a strategic plan is an important component of organizational success; developing strategic thinkingthroughout the organization, however, is what enables an organization to make timely and effective decisions before, during, and after the establishment of a strategic plan. This session will provide guidance and offer suggestions on how you can leverage the impact of your strategic plan (if you have one) and build a culture where Board and staff leadership look forward rather than backward and seize opportunities rather than manage crisis. Learn how to improve your organizational decision making and move forward with shared purpose, commitment, and vision.

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NYCON Brings You Upcoming Webinars, News & Nonprofit Notes

Expand Your Employee (and Volunteer) Benefits Packages at an Affordable PriceGive employees and volunteers what they want with the NYCON Visioncare Plan through Humana! We know that the Employe Benefits "Market" can be complicated.  Our job is to help make that world more simple, and affordable for nonprofits. To help you understand each type of benefit, it's coverage features and it's costs we are rolling out a series of short 30-minute webinar spotlights on our administered programs: Health Insurance, Dental Insurance, Flexible Spending Accounts and our Vision Program - which is new for 2013!  [Thursday!] 3/21/2013 [Benefit Spotlight Webinar] Vision Insurance    4/11/2013  [Benefit Spotlight Webinar] Dental Insurance Plans & Administration through NYCON  Stay tuned for our Flexible Spending Account & Life Insurance Webinars in the Spring....

Upcoming NYCON Membership Orientation    Great information for new and returning members!

3/22/2013 [Please note the date change] Membership Benefits Orientation [Webinar]  In our "Get to Know Us" Sessions, NYCON staff will tell you a lot more about our membership benefits - and answer all the questions you have regarding our process, costs and what you get for FREE.      We will be talking about these benefits. Nonprofit Training, Education and Professional Assistance NYCON empowers our members with the best practices, policies, and procedures as well as information on ever-changing regulations, funding, accountability and more. Cost Savings Solutions for Nonprofits NYCON leverages the purchasing power of thousands of nonprofits to bring you economies of scale on everything from Office Supplies to Fundraising Software. The Nonprofit Voice in New York State NYCON represents our members on the local, state and national level, giving voice to small and medium sized nonprofits everywhere.

Nonprofit Audits in a Nutshell   [Free Members Only Webinar] March 28th, 2013    3:30pm to 4:30pm  Register Today!   Like yours, many nonprofit organizations often find themselves   wondering... Do we need to have an independent audit? (And what does that entail anyway?) Are there special rules for us because we receive government grants? How can we prepare so that the process goes smoothly?    What's the board's role? To answer these questions and more, the New York Council of Nonprofits (NYCON) is excited to bring you Nonprofit Audits in a Nutshell, a free webinar on March 28th at 3:30pm Eastern, hosted by our national network, the National Council of Nonprofits. This webinar features practical tips from nonprofits about their audit practices, as well as experts from BoardSource and Raffa and is designed to give you background on everything you need to know about the independent audit process (from legal requirements to practical advice).     Thanks to the support of First Nonprofit Foundation, this exclusive webinar is available, free of charge, to all members of NYCON Don't miss this opportunity - Register Today! Free and Open to Current NYCON Members Only (click here to renew your membership for 2013 before registering.)

[Corporate Member Spotlight] DoGoodBuyUs Webinar April 11th, 2013  2:00pm to 2:30pm Register Now As nonprofits around the country look for ways to bolster their fundraising, hundreds of organizations have turned toDoGoodBuyUs as a way to bridge the gap between causes and the consumer market.DoGoodBuyUs works with nonprofits around the world, helping them sell the products they (and now they) have created. AtDoGoodBuyUs (http://www.dogoodbuy.us) they believe consumerism can change the world so, they created the largest marketplace of charity made products. Now anyone can "do good" just by buying beautiful, often handmade items that support the worthiest causes. From tea to t-shirts, from rain boots to coffee, from jewelry to soaps, the list of amazing products go on. DoGoodBuyUs is the newest Corproate Member* of NYCON. On this spotlight webinar you will learn:  Why products have become a successful part of many NPO's strategy How to get started, what the process is like, services offered and more.. The long term benefits Join us on April 11th at 2pm for a quick 30 minute overview on just how DoGoodBuyUs can Do Good by your nonprofit & community. *Please note that this company is not a NYCON Endorsed Corporate Partner.

Building a Powerful Grants Calender! [Lunch & Learn Webinar]  Presented by Cynthia Adams, Founder, Grantstation.com April 12th, 2013 Free for current NYCON Members  $50 for Non-members  Register Now This webinar will take participants through the processof establishing a grants calendar for the next 12 to 18 months. Fast-paced, and filled with action steps, Cynthia Adams will discuss how to design and adopt a Grant Decision Matrix before beginning the process of building a specific grants strategy for each project. All participants will also receive a set of worksheets that they can use to create their own approach to building grants calendars and grants strategies for their organizations. This webinar is for beginning, intermediate and advanced grantwriters.