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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The NonProfit Times Weekly E-Newsletter

IRS Reports 10,000 Fewer Nonprofits In 2012

There were 10,000 fewer registered tax-exempt organizations in 2012 than in 2011. According to the Internal Revenue Service (IRS) Data Book for 2012, which was released Monday, there were 1,484,818 501(c) organizations for the fiscal year ending in September, compared with 1,494,882 in 2011 – a decrease of 10,064, or about 0.68 percent.Read more... Professional Development... 5 principles for ethical mentoring “I never meant for that to happen.” Just as the above lament can be the swan song for a nonprofit that doesn't follow good organizational practices, it can also be the epitaph for a mentoring partnership gone wrong. Read more... Human Resources... 15 interview questions you can legally ask There are a lot of laws these days that restrict the kind of information you can request from candidates during job interviews. Since you probably don't want to get in trouble with the law, it's important to know the questions that you can and should ask. Read more... Management... 6 reasons change is good It's usual to resist change. Those who aren't pulling their own (or any) weight know that their gigs can be threatened if they don't do a whirlwind job of convincing change agents just how essential they are. Those who are pulling their own weight (or more) know that their livelihoods are threatened because they are too busy working to prove how essential they are to the operation. Read more... To Read More Click Here

Unemployment Insurance borrowing results in new employee fee: To Impact Nonprofits

Read below about the recent news about a new fee per employee for employers related to NYS Unemployment Insurance borrowing. As a nonprofit, there is another alternative, which you can learn about from NYCON:

Find Out if the Unemployment Savings Program for NYCON Members through First Nonprofits Companies can Save You Money.

Why pay a tax if you don’t have to? Many NYCON Members have switched from paying the state unemployment tax rates to First Nonprofit Unemployment Savings Program saving up to 60% of their unemployment costs annually. Find out if you can too. Take NYCON's FREE upcoming Beneft Spotlight: Unemployment Savings Program on August 23rd from 10 am to 11am. REGISTER HERE

A Big Bill for Employers
The Albany Times Union reported that Gov. Andrew Cuomo on Tuesday rolled out a sweeping plan to help revitalize the state's economy, complete with an ad campaign and competitive grant program designed to spark innovation.

But businesses have a more immediate concern: The bill is coming due for New York's unemployment insurance.

Citing the need to borrow more than $3 billion from the federal government to prop up its chronically empty account, the state faces a whopping $95 million interest payment on loans for the fund due Sept. 30.

As a result, the state Department of Labor is assessing businesses up to $21.25 per employee to cover the cost. That payment is due Aug. 15.

Complaints about what businesses describe as a hidden tax were rolling in Tuesday after numerous employers received the notices and as Cuomo expounded on his plans for the economy.

"This is something that could -- depending on the number of employees -- be a pretty hefty cost in this economy," said Mike Durant, New York state director for the National Federation of Independent Businesses.

When asked about the surcharge during a news conference outlining his revitalization plans, Cuomo stressed that the bill for interest is ultimately coming from Washington, D.C.

"It's a federal decision whether or not they'll waive the interest payments. I hope that they do," he said, adding that his office was pushing the state's congressional delegation on the issue.

The hefty tab illustrates what can happen as the federal stimulus program, enacted shortly after the recession started in 2008, runs out.

The Department of Labor noted that the stimulus program provided no-interest loans to the states in 2009 and 2010, but not this year.

Read more: http://www.timesunion.com/local/article/A-big-bill-for-your-boss-1472786.php#ixzz1SetH4Zip

Utica JSEC - Wage Theft Prevention Act Seminar - 05-11-11

Andrew Bobrek of Bond Schoeneck & King presents – The Wage Theft Prevention Act
This seminar will address the recently signed Wage Theft Prevention Act which imposes new notification and recordkeeping requirements on employers, significantly expands the Department of Labor’s enforcement powers and increases employers’ potential liability for violations of the Labor Law. Please join us with your questions!
Where:
The Blue Flag Room Union Station 1 Railroad Street Utica, NY 13501
When:
Thursday, May 11th 7:30 a.m. - Registration 8:15 a.m. – 10:15 a.m. - Andrew Bobrek
Cost:
$15.00* Payable in advance or at door
Reservations must be made no later than 3 p.m. on Friday, May 6th by calling (315) 793-5306, by faxing your name and company name to (315) 793-2216, or by e-mail to: Polly.Janes@labor..ny.gov Payment in advance may be mailed to the attention of Jennifer Gilbert, c/o Mohawk Valley Chamber of Commerce, Radisson Hotel, 200 Genesee St., Utica, NY 13502. Please make checks payable to the Utica JSEC.

Excellus BCBS offers info on health care reform

Excellus BCBS is offering an information section related to the health care reform legislation.

Keeping You Informed
We want to keep you updated on the status of this legislation. While the law was just passed, many activities still have to occur. As the implications and requirements of the legislation become clearer, we will continue to update these pages. You may also Join Our Email Alert to be notified of updates.

Overview
On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act It was modified by the Health Care and Education Reconciliation Act of 2010, signed by President Obama on March 30, 2010.


The following summary explains key health coverage provisions provided in the federal law. In some instances state law may do more.

The legislation will do the following:

• Most individuals will be required to have health insurance beginning in 2014, or face a penalty.
• Individuals who do not have access to affordable employer coverage will be able to purchase coverage through a health Insurance Exchange with premium and cost-sharing credits available to some people to make coverage more affordable. Small businesses will be able to purchase coverage through a separate Exchange.
• Employers will be required to pay penalties for employees who receive tax credits for health insurance through the Exchange, with exceptions for small employers.
• New regulations will be imposed on all health plans that will prevent health insurers from denying coverage to people for pre-existing conditions and their health status, and from charging higher premiums based on health status and gender.
• Medicaid will be expanded to 133 percent of the federal poverty level ($14,404 for an individual and $29,327 for a family of four in 2009) for all individuals under age 65. (Medicaid coverage may vary by state.)
• The Congressional Budget Office estimates that the legislation will reduce the number of uninsured by 32 million in 2019 at a net cost of $938 billion over ten years, while reducing the deficit by $124 billion during this time period.

For more information, click here.

Volunteering in America Resources

Through its studies on Volunteering In America, the Corporation for National and Community Service continues to deliver increasingly detailed reports on the trends and habits in volunteering across the country, in order to better understand who is serving in our communities and how, when, and why they serve.

In partnership with HandsOn Network, the Corporation is providing specific resources to support the findings of the Volunteering in Americareports. The resources on this page have been developed to help you increase the capacity of your organization, company, program, or community to effectively engage volunteers of all ages. This page builds on resources developed for previous Volunteering in America reports and includes new and updated resources (as indicated below). Additionally, scroll down the page to learn more about and register for three Ask the Expert webinars facilitated by leading volunteer practitioners and researchers.

Featured Resources
Volunteer Self-Organizing – Resources to help individuals plan and manage projects to bring about positive community change
Recruitment - Strategies to recruit new volunteers, including target populations such as Boomers and students
Retention – Tips for retaining volunteers and plugging “the leaky bucket”
Human Capital Strategies – Innovative techniques for nonprofits during these difficult economic times, including the use of pro bono services, other skilled volunteers, and volunteer leaders
Cost-Effective Volunteering - Practical tips for maximizing resources during an economic downturn
Voluntourism – Resources for understanding the growing trend of combining service and vacations

Training for Your Nonprofit

Employee Retention in the Not-for-Profit World: Crafting the User Friendly Workplace
Date: Monday, April 27
Time: 2:30 – 4:00 p.m.
Location: Curtin Special Events Room, Le Moyne College

Events of the past months notwithstanding, statistics show there will be a shortage of talent in the coming years numbering in the millions. How will nonprofit organizations compete for the best talent at a time when corporate organizations are seeking those very same people? And how will those same organizations energize and enable employees who may feel “trapped” during this economic downturn? Executive Directors, Managers and Supervisors will benefit from this revealing program.

Renée Downey-Hart, Ph.D., visiting assistant professor of business administration, will share the results of a survey she conducted of more than 600 employees at 20 local nonprofit organizations that helps to answer those questions.

Downey-Hart is a well-known trainer and consultant whose work has offered her a global perspective of organizations and their people. She has been a partner in the Syracuse-based firm of Eagle Consultants for more than 20 years. Downey-Hart has been praised for her energy, humor and the ability to marry theory with practice to maximize performance.

This event is free and open to the public, and is sponsored by Le Moyne College’s Division of Management and the Madden Institute. Refreshments will be served. For more information, call (315) 445-4485. Please email your RSVP by Thursday, April 23: MaddenInst@lemoyne.edu. Please share your name(s), organization and phone in your email.

Have a training to share? E-mail us.

NYS WARN Act Impacts Nonprofits

Although the Federal WARN (Worker Adjustment and Retraining Notification) Act has been in effect for several years, New York State has now enacted its own version of the employee protection notification scheme. The New York State version imposes more stringent requirements, bringing far more employers under the purview of this legislation that the Federal law. The effect is that where many non-profits would never have been affected by the Federal legislation, many will come under the auspices of the New York State version. Read more here about the WARN Act and its impact on your nonprofit if you have 50 or more employees.

This policy update is provided by Kevin M. Stadelmaier, Esq, Legal Advisor, New York Council of Nonprofits (fomerly CCSNYS, Inc.), Legal Accountability and Compliance Services, Western New York Regional Office. Should you have further questions or concerns relevant to the requirements of this New Act, do not hesitate to contact Kevin at (716) 241-5010 x170 or by email.

HR Advice: Internal Candidates

Human resources and employee retention have been topics of discussion amongst the Group this year. We are always looking for advice and resources that can help in the hiring employees. When a position opens, do you look internally first? This recent article from Bridgestar discusses the associated issues when considering an internal candidate for a management level position in your nonprofit. Do you have any advice or feedback about looking at internal candidates? Share your feedback here.

ED Group Meeting Discusses Events and Staff Retention

The Oneida and Herkimer Nonprofit Executive Directors Group held the May 14th program at the Herkimer Area Resource Center (HARC). The meeting was attended by eleven directors, who began the meeting with introductions and announcements. As each director introduced themselves, he or she announced upcoming special events. The Group found that golf tournaments are especially popular this time of year. This discovery spurred a discussion about the need for a master planning calendar that would list the major special events that Oneida and Herkimer nonprofits were planning. The calendar would allow directors to try to avoid event conflicts. The calendar also could be a collecting point for staff training that organizations were planning. These trainings could be of interest to other nonprofits. The Group decided that developing a calendar was a good next step. More information about this calendar will be available shortly.

The remainder of the program focused on the discussion of the climate assessment survey on staff retention. The Peacemaker Program's Brenda Episcopo facilitated a discussion of the summary report (available here) and her agency's experience of implementing this survey. Glenn Beville from Hospice & Palliative Care, Inc. also spoke about his organization's employee survey conducted early last year. Glenn has provided a copy of the survey here for the Group and related the following about the survey and examining the results:

The questions are not unique. We came up with some of our own,
borrowed from the internet and got some advice from a vendor company
that had previously conducted their own employee survey. As part
of the analysis process, the team categorized the responses to the 12 write
in questions into one of the following categories:

• Communication
• Leadership
• Staffing
• Wages & Benefits
• Education
• Space
  
  We used the categories as a basis to formulate actionable solutions. The second attached document is the "report card" that we used to communicate the actionable plans to staff and periodically report progress.

The Group continued discussion about action steps based on the survey data. The two most challenging areas revealed by the survey were: Factor 7 Recognition and Reward and Factor 9 Competitive Salary. The Group discussed the challenges of these factors, and Brenda shared some of The Peacemaker Program's responses. First, the agency examined salary levels, and created an informal study (available here). This information helped The Peacemaker Program restructure staff salaries. The organization also examined different ways of recognition and reward, creating the following research list:

• job switch days (shadowing, mentoring)
• job sharing
• telecommuting
• 360 degree feedback
• Exit interviews
• Surprise “spot” recognition for a job well done
• Employee sport teams
• Include family members in agency functions
• Flexible schedules
• Employee assistance programs
• Ability to use pre-tax money for medical expenses or day care
• Random days off (personal holidays)
• Pension plans

The Peacemaker Program is continuing to examine this list for possible ideas to implement. The Group finished the program meeting with a discussion about other topic ideas and next steps. The Group discussed a follow up to this program on employee recognition and reward. Another topic idea mentioned was board retention and recruitment. The Steering Committee will be holding a follow up meeting to discuss setting the next program. Please share any additional ideas by e-mailing amarietta@ccsnys.org.

May 14th Program Participants:
Kevin Crosley, Herkimer Area Resource Center
Phyllis Spinner, Herkimer County HealthNet, Inc.
Glenn Beville, Hospice & Palliative Care, Inc.
Cornelia E. Brown, MAMI of CNY, Inc.
Lorraine Kinney-Kitchen, Mid-York Child Care Coordinating Council, Inc
Sylvia J Bunce, RCIL
Rev. Bill Dodge, Rescue Mission of Utica
Sue Casanova, Smoke-Free Mohawk Valley
Gail Miskowiec, The Arc, Oneida-Lewis Chapter, NYSARC
Jan Squadrito, The Community Foundation of Herkimer & Oneida Counties
Brenda Episcopo, The Peacemaker Program, Inc.

Staff Retention Survey Results to be Discussed on May 14th

The Oneida and Herkimer Nonprofit Executive Directors Group's staff retention survey is now closed and is being collated for discussion at next week's May 14th meeting. The survey results will be presented, and the program will focus on the trends revealed and what nonprofits can learn from this data. The conversation will also focus on next steps for addressing staff retention in the local region.

The May 14th program is set for Herkimer Area Resource Center. This meeting is being generously hosted by HARC, which is located at 350 South Washington Street in Herkimer.
REGISTER NOW FOR MAY 14TH MEETING! If you have any questions, please e-mail or call (607) 436-3124.

Steering Committee Update and Staff Retention Survey

The Steering Committee is working to confirm the location for the May 14th meeting in Herkimer County. Also, the Committee discussed implementing a staff retention survey that was created by Steve Robinson, Director Alternative Dispute Resolution Services at The Peacemaker Program. This survey will provide a climate assessment for each participating nonprofit and the region as a whole.

The Committee will send an e-mail out to all Executive Directors in the Group inviting them to opt in to use the survey. If they agree, a survey link will be e-mailed to them to distribute to their particular staff. Steve has stated that the survey will be anonymous and this needs to be stressed to everyone. He has also suggested giving 5 days to complete the survey. The resulting data will be consolidated with Steve's help. The Committee can also provide the individual data to each participating organization if there is an interest. The individual organizations data will remain anonymous unless they agree to share their individual info. Please feel free to share any thoughts on the survey or this process.

If you are interested in implementing the survey for your organization, please let me know. I will send you an assigned letter code and the survey link for your employees. You can e-mail me at amarietta@ccsnys.org or call (607) 436-3124.