1 in 2 Americans are now poor or low income

Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.

The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families.

"Safety net programs such as food stamps and tax credits kept poverty from rising even higher in 2010, but for many low-income families with work-related and medical expenses, they are considered too 'rich' to qualify," said Sheldon Danziger, a University of Michigan public policy professor who specializes in poverty.

"The reality is that prospects for the poor and the near poor are dismal," he said. "If Congress and the states make further cuts, we can expect the number of poor and low-income families to rise for the next several years."

•Study: 1 in 5 American children lives in poverty
Congressional Republicans and Democrats are sparring over legislation that would renew a Social Security payroll tax cut, part of a year-end political showdown over economic priorities that could also trim unemployment benefits, freeze federal pay and reduce entitlement spending.

Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether some people classified as poor or low-income actually suffer material hardship. He said that while safety-net programs have helped many Americans, they have gone too far, citing poor people who live in decent-size homes, drive cars and own wide-screen TVs.

With nearly 14 million Americans unemployed, a new child welfare study finds one in five children are living in poverty. Nearly one in three live in homes where no parent works full-time year-round. NBC's Chris Jansing reports.
"There's no doubt the recession has thrown a lot of people out of work and incomes have fallen," Rector said. "As we come out of recession, it will be important that these programs promote self-sufficiency rather than dependence and encourage people to look for work."

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Mayors in 29 cities say more than 1 in 4 people needing emergency food assistance did not receive it. Many middle-class Americans are dropping below the low-income threshold — roughly $45,000 for a family of four — because of pay cuts, a forced reduction of work hours or a spouse losing a job. Housing and child-care costs are consuming up to half of a family's income.

States in the South and West had the highest shares of low-income families, including Arizona, New Mexico and South Carolina, which have scaled back or eliminated aid programs for the needy. By raw numbers, such families were most numerous in California and Texas, each with more than 1 million.

The struggling Americans include Zenobia Bechtol, 18, in Austin, Texas, who earns minimum wage as a part-time pizza delivery driver. Bechtol and her 7-month-old baby were recently evicted from their bedbug-infested apartment after her boyfriend, an electrician, lost his job in the sluggish economy.

After an 18-month job search, Bechtol's boyfriend now works as a waiter and the family of three is temporarily living with her mother.

"We're paying my mom $200 a month for rent, and after diapers and formula and gas for work, we barely have enough money to spend," said Bechtol, a high school graduate who wants to go to college. "If it weren't for food stamps and other government money for families who need help, we wouldn't have been able to survive."

About 97.3 million Americans fall into a low-income category, commonly defined as those earning between 100 and 199 percent of the poverty level, based on a new supplemental measure by the Census Bureau that is designed to provide a fuller picture of poverty. Together with the 49.1 million who fall below the poverty line and are counted as poor, they number 146.4 million, or 48 percent of the U.S. population. That's up by 4 million from 2009, the earliest numbers for the newly developed poverty measure.

Read more here.

The Institute for Human Services Provider Newsletter: Upcoming Events and More!

Happy Holidays!

As 2011 begins to wind down, everyone at IHS would like to wish you a healthy and happy holiday season. We know that this is a busy time, but also wanted to share with you some of the exciting events we have planned for 2012. More information about each event will be available closer to the event date.

January, 24th: IHS Café: HR Issues & Trends in Nonprofits
February, 21st: Grantwriting Workshop
March 1st: STNED Meeting - Facebook with Sean Lucasik
March 21st: IHS Annual Conference
April 2012: Volunteer Conference
May 11th: Adolescent Health & Wellness Conference
June 7th: STNED Meeting
July 19th: Steuben Teen Pregnancy Prevention Task Force Annual Meeting & Training
August 3rd: IHS Cafe
September 6th: STNED Meeting
September 9th - 10th: NYSARH Conference
October 5th: IHS Cafe
November 17th: Rural Health Day
December 6th: STNED Meeting

Nonprofit Professional in the Spotlight
It's the end of the year, and we wanted to take the time to highlight the wonderful work of three nonprofit professionals working at three very different organizations.
Leah Hudson is the Coordinator of Education and Training at Southern Tier Hospice and Palliative Care. Learn more about her and her work.
Christine McLear is a sexuality educator at Planned Parenthood. Learn more about her and her work.
Lori Payne is the Program Coordinator for the Kids' Adventure Club Program at Pathways, Inc. Learn more about her and her work.

We are always amazed at the dedication and passion that nonprofit professionals in our region bring to their work, and look forward to highlighting more in the new year.

Help with Doctoral Research Project
The Institute for Human Services is helping to connect a doctoral researcher in the School of Human Services at Capella University with community-based nonprofit organizations across South Central New York. His research study - entitled "Cashing Out: Fund Development Director Turnover in Nonprofit Organizations" is looking at turnover intent within nonprofits, specifically the positions held by development professionals. Dr. Ray Borges is supervising the research project and we encourage you and/or your development team to participate in the research study here.

For more information or to contact the researcher, Brian McConnell, email at bmcconnell2@capellauniversity.edu. Please also contact the researcher directly for a a copy of the informed consent form for your records. Thank you for your help.

Welcome New IHS Members!
Reverb Ministries, Inc.
O'Brien-Adams Financial Group
Twin Tiers Region Affiliate of Susan G. Komen for the Cure

Are You a Nonprofit Member of the Institute for Human Services? Find out how IHS can help you accomplish your mission!

Nonprofit Member Benefits include a complimentary membership to the New York Council of Nonprofits annually! Download the Nonprofit Member Application.

Call IHS Member Services today for a one-on-one consultation - 607-776-9467 x-226.

Charting a Decade of Online Donations

Charting a Decade of Online Donations
November 23, 2011, 11:04 am
By Cody Switzer
Only 4 percent of donors had given online in 2001. This year, about 65 percent have given to charity through the Internet.

That’s one of the comparisons made in a new graphic from Network for Good, a fund-raising and volunteerism Web site that celebrates its 10th anniversary this month.

In 2001, the average donation through the site was $226. But this year the average gift is $73, a change that Network for Good interprets as a sign that online giving has “gone mainstream.”

Here’s the full graphic:

NY comptroller says late checks hurt nonprofits

NY comptroller says late checks hurt nonprofits
Nov. 15, 2011, 3:01 a.m. EST
AP
ALBANY, N.Y. (AP) — New York Comptroller Thomas DiNapoli says late contract approvals and payments by the state are hurting nonprofit providers and jeopardizing services.

DiNapoli says state agencies last year were on average six months late in approving nine out of 10 contracts valued at $50,000 or more, often after services were provided.

An analysis of the first half of 2011 shows nearly 90 percent of contracts approved by the comptroller were submitted late by state agencies.

DiNapoli says nonprofits operate on thin margins and provide basic services ranging from health care clinics to work programs, with 22,000 active grant contracts totaling $16.8 billion.

The nonprofit sector employed 1.25 million people statewide last year.

You can access the article by Clicking Here.

STNED Holiday Social Networking Event

STNED Holiday Social Event

Where:
Three Birds Restaurant
73 East Market Street
Corning, NY 14830

Driving Directions

When:
Thursday December 1, 2011 from 5:00 PM to 7:00 PM EST
Add to my calendar

Three Birds Restaurant, Corning

Please join Executive Directors and Senior Management Professionals at the STNED Holiday Social Event. The purpose of this event is to have an enjoyable evening of networking and light fare. A cash bar will also be available for your enjoyment.

The event will be free of charge for the first participant from a nonprofit organization and $10 for each additional person from that organization. Please RSVP via the online form below.

STNED was established for the purpose of providing education, peer support and the sharing of ideas for nonprofit executive and management professionals in the Southern Tier/Finger Lakes Region of New York State. STNED is a member of New York Nonprofit Executive Directors Network .

Our generous sponsors for the evening are:

Community Foundation of Elmira-Corning & the Finger Lakes

The Institute for Human Services, Inc.

ProAction of Steuben & Yates, Inc.

The Triangle Fund


REGISTER NOW

I Can't Make It

Nonprofit Knowledge Matters | Protecting the Charitable Giving Incentive

Protect the Charitable Giving Incentive

Using Our Outside Voices in the House … and in the Senate

Nonprofits are not used to raising our voices. We teach others to use their “indoor voices,” and we mediate disputes so others won’t yell in anger. We heal the wounded, silently. We feed the hungry, quietly. At times we play loud music and paint loud colors on canvases. But you get the picture: we are not used to yelling.

Recently Tim Delaney, President and CEO of the National Council of Nonprofits, was in Georgia, Montana, and New York, encouraging nonprofits to raise their voices -- literally. In rooms filled with nonprofit leaders attending major conferences, he designated half the room the loud "Yes” crowd, and the other half the “Nos.” Tim then pointed to one side – “YES” came the refrain; then to the other side and louder “NOs” reverberated. After a few volleys, the friendly competition could be measured in deafening decibels. Tim then instructed the “Yes” side to remain silent – they weren’t allowed to use their voices. After a couple more volleys of loud “NOs” that were met with silence, Tim noted what policymakers hear: silence from the majority who are too busy and too unsure, versus resounding and unmatched “NOs” from the vocal opposition. Each time the “No!” voices boomed against the silence, members of the audience grasped the danger of remaining silent.

Silence is the nonprofit sector’s worst enemy. If nonprofits don’t raise our voices, we are powerless. Right now, it’s urgent that all nonprofits speak up.

The charitable giving incentive is at risk.
Congress is considering, on a tight timeline, how to reduce the deficit by at least $1.2 trillion. Slashing the deficit by that much guarantees that every option to save money will be on the table, without much thought as to the consequences – unless the downside is abundantly clear. The National Council – and so far, more than 20 other national organizations and 2,800 community-based nonprofits across America – think it is abundantly clear that if the Supercommittee recommends elimination of the charitable giving incentive, then individuals and communities served by nonprofits will suffer.

Raise your voice now!
Sign on to the Nonprofit Community Letter to protect the charitable giving incentive.
See which nonprofits in your state have already signed on.
Learn more about the charitable giving incentive.
Spread the word! Tweet: 
The #charitable giving incentive that supports #nonprofits is at risk! Take action now to protect it. bit.ly/olnPHp (via @NatlCouncilNPs)
or
#Nonprofits, tell the #supercommittee not to change the #charitable #giving incentive http://bit.ly/rZcH5q #takeaction (via @NatlCouncilNPs)
Advocacy by nonprofits is legal – and needed.
Join your State Association to keep informed about capacity building and policy issues that impact all nonprofits.

New NLRB Poster Requirement - new effective date of the rule is Jan. 31, 2012.

New NLRB Poster Requirement : new effective date of the rule is Jan. 31, 2012.

Below is information about the new National Labor Relations Board (NLRB) required poster describing employee rights under the National Labor Relations Act.
The National Labor Relations Board has postponed the implementation date for its new notice-posting rule by more than two months. The new effective date of the rule is Jan. 31, 2012.
The Board’s jurisdiction extends to most small business owners. However, some very small employers whose annual volume of business is not large enough to have more than a slight effect on interstate commerce are exempted. In the case of retail businesses, including home construction, the Board’s jurisdiction covers any employer with a gross annual volume of business of $500,000 or more. The Board’s non-retail jurisdictional standard applies to most other employers. It is based on the amount of goods sold or services provided by the employer out of state (called “outflow”) or goods or services purchased by the employer from out of state (called “inflow”), even indirectly. Under this standard, the Board will take jurisdiction over an employer with an annual inflow or outflow of at least $50,000. See “Frequently Asked Question” Link below for more details about the Board’s jurisdiction standards.
A workplace poster that describes employee rights under the National Labor Relations Act is now available for free download from the NLRB website at www.nlrb.gov/poster
Private-sector employers within the NLRB’s jurisdiction will be required to display the poster where other workplace notices are posted. The National Labor Relations Board has postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses. The new effective date of the rule is Jan. 31, 2012. The decision to extend the rollout period followed queries from businesses and trade organizations indicating uncertainty about which businesses fall under the Board’s jurisdiction, and was made in the interest of ensuring broad voluntary compliance. No other changes in the rule, or in the form or content of the notice, will be made. Employers who customarily post personnel rules or policies on an internet or intranet site must also provide a link to the rights poster from those sites. In addition, copies of the Notice will soon be available without charge from any NLRB regional office.
For further information about the posting, including a detailed discussion of which employers are covered by the NLRA, and what to do if a substantial share of the workplace speaks a language other than English, please see our Frequently Asked Questions. . For questions that do not appear on the list, or to arrange for an NLRB presentation on the rule, please contact the agency at questions@nlrb.gov or 866-667-NLRB.

Voluntary Compliance Program announced by IRS to address worker misclassification

Information for your members: You may have seen that in late September the IRS announced a voluntary compliance program for employers (including nonprofit employers) to enable those who have mistakenly classified workers as independent contractors to make a correction, along with a modest payment, and avoid the usual penalties of noncompliance. This program’s announcement offers an opportunity to remind nonprofits about the risk of misclassification and share information with them about the voluntary compliance program. See the National Council’s website materials on this topic.

Here is the text of the IRS announcement about the voluntary compliance program (from the IRS’s EO Update circulated on October 4):

“The IRS has launched a new program that will enable many employers, including tax-exempt employers, to resolve past worker classification issues and come back into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit. To be eligible for the new Voluntary Classification Settlement Program an applicant must:

Consistently have treated the workers as nonemployees in the past

Filed all required Forms 1099 for the workers for the previous three years

Not currently be under audit by the IRS, Department of Labor or a state agency concerning the classification of these workers.

Full details, including FAQs, will be available on the Employment Tax Pages of IRS.gov and in Announcement 2011-64.”

Request for Presentations (RFP) 4th Annual Adolescent Health & Wellness Conference

Request for Presentations (RFP) 4th Annual Adolescent Health & Wellness Conference
May 11, 2012
Radisson Inn, Corning, NY

Click Here for Printable RFP & Additional Information
Email mannonk@ihsnet.org for RFP in MS Word

Steuben Teen Pregnancy Prevention Task Force is on Facebook! www.facebook.com/stpptf

The annual conference presented by the Steuben Teen Pregnancy Prevention Task Force, an initiative of the Steuben Rural Health Network at the Institute for Human Services, Inc., attracts approximately 200 parents and professionals each year. Participants include school social workers, guidance counselors, teachers and nurses; adolescent parenting program and adolescent pregnancy prevention program coordinators; health educators; adolescent health clinics and councils; community development corporations; health departments; and departments of social service as well as community-minded individuals and parents.

We are seeking presenters on a broad range of topics related to adolescent health and wellness to include but not limited to teen pregnancy and STD prevention, teen parenting, obesity prevention, adolescent LGBTQA issues, drug/alcohol use among teens, mental health issues and teen consumers, etc. Participants will be interested in workshops that offer concrete ideas, methods, and resources that they can incorporate into their own programs.

Conference Location: Radisson Inn, Corning, NY
Conference Dates: Friday, May 11, 2012

Submission Process:

Please e-mail your proposal to Kelli Mannon at mannonk@ihsnet.org or fax to 607-776-9482. Call 607-776-9467, extension 226 with questions. Deadline for Submission: Tuesday, November 1, 2011

Review Process:

Upon receipt of an application package, the conference planning committee will review it for completeness and topic relevance. Additional information, such as slides from your proposed session or a list of previous presentations, may be required. Acceptance notices will be e-mailed by late November.

Workshop Format:

Each workshop session is 90 minutes long, including time for questions. (If you have a long workshop that could be offered over consecutive session times, please indicate so on your submission form.) You may present your session in lecture, discussion, or panel format. Interactive sessions are highly encouraged.

Workshop Categories:

Below is a list of topic areas that we would like to cover. The list is not all-inclusive; if you have a presentation that does not address one of these topics but that is generally relevant to teen pregnancy/STD prevention, teen parenting, or adolescent health & wellness, it will be considered by the planning committee.
Issues Affecting Pregnancy Prevention/Sexuality Education:

· HIV/AIDS/STI Education: current information as it relates to adolescents
· Media: how youth are using current media (social networking, texting, etc.)
· Poverty: poverty and its link to teen pregnancy
· Adolescent Development: teen perspectives of health and sexuality issues, abstinence, sex education; impulsive decision making
· Rural Youth: teen pregnancy in rural communities – specific needs in terms of education, culture, poverty levels, etc.

Teen Male Involvement: Sexuality education programs that work for young males, programs for young fathers, male health issues

LGBTQA Youth: How to address the needs of gay, lesbian, bisexual, and transgender youth in sex education

Teen Parenting: Prevention of repeat pregnancies; housing for teen parents and their children; ensuring quality education for pregnant and parenting teens; improving parenting skills; healthy relationships; prenatal health and childbirth education; perinatal depression; peer groups; mentoring and Doula support; transitioning to independent living

Additional Areas of Interest:
Nutrition/Obesity Prevention & Adolescents
Mental Health Issues & Adolescents
Norming Positive Behavior
Trends with Tattoos, Piercing, & Body Manipulation
Alcohol & Drug Use Among Adolescents: Not Hearing “No” doesn’t mean “Yes”

Complimentary Registrations: As compensation for your time, we will provide free conference registration and attendance at all conference meals for up to two presenters.

Interested in becoming an exhibitor or sponsor? Call the Steuben Rural Health Network for details at 607-776-9467 x-226

Panel Discussion and Exhibition for Artists

Artists Make History

Twenty-four artists gathered together for ten sessions during the winter and spring of 2011 to experience The Business of Art, a professional development program presented by Southern Tier Economic Growth (STEG) and The ARTS Council of the Southern Finger Lakes (The ARTS). With primary funding through The Community Foundation of Elmira - Corning and the Finger Lakes, the participants received advice on the promotional, legal, and practical sides of their chosen arts. These artists are mounting an exhibition of their work at the Chemung Valley History Museum, 415 East Water Street, Elmira. The opening reception is scheduled for Saturday, October 1, from 3 to 5PM. The public is invited, and refreshments will be served. The exhibit will remain on display through October 29, free of charge to all visitors. Museum hours are Monday through Saturday, 10AM to 5PM, closed Sundays. There will also be a panel discussion with the participants on Tuesday evening, October 11, from 6 to 8PM. The artists will describe how the Business of Art program has affected their professional endeavors. The Business of Art program is a true collaboration within the arts community of the Southern Tier. Directed by STEG and The ARTS, and funded by the Community Foundation, the sessions were presented at five cultural venues: Arnot Art Museum, Chemung Valley History Museum, Steele Memorial Library, Community Arts of Elmira, and the Clemens Center. The program was facilitated by local artist Allen C. (Denny) Smith. Full list of participating artists: Vani Akula Bill Boland Bridget Bossart Van Otterloo Ann Cady Jennifer Fais Jennifer Geck Gretchen Halpert Cynthia Hill Beth Hylen Pat Jackson Diane Janowski Betsy Kent Brandon Krazinski Karen Kucharski Colleen McCall James McCarthy Paul McKinley Vickie Mike Felicia Poes Jennifer Seaman Tom Tunniclif Debb VanDelinder Karen Vogler Terry Winer Please join the artists in this celebratory commencement exhibition. Making History - Artists of the Southern Finger Lakes Chemung Valley History Museum 415 East Water Street Elmira, New York 14901 607-734-4167 October 1 - 29, 2011 Opening reception: October 1, Saturday, 3 - 5PM Panel discussion: October 11, Tuesday, 6 - 8PM

High Peaks Resort offers opportunity for non-profits to raise money

High Peaks Resort Announces ‘Spring For Hope’

- Unprecedented Assistance for Non-Profit Organizations -

LAKE PLACID (Sept. 6, 2011) – High Peaks Resort in Lake Placid is seeking applications for its Spring For Hope℠ initiative, an opportunity for non-profit organizations to be awarded free use of meeting space, accommodations, and more at the beautiful Adirondacks resort.

This unprecedented opportunity will allow two non-profit organizations to each receive free use of the entire resort for three days during April 8 to 18, 2012. Included are two nights’ accommodations (up to 133 rooms), free meeting space (up to 10,000 square feet), free audiovisual and support services, and 50 percent off all related catering. The application deadline is midnight, October 15, 2011, and winners will be announced in mid-November.

“In these difficult times, it is important to give back to our community. By helping those who help others year round, we felt we could have the greatest impact,“ said Bill DeForrest, CEO and President of Lane Hospitality, owner of High Peaks Resort.

“The quality of life in our community is directly impacted by our active non-profits. ‘Spring for Hope’ isn’t just a way to recognize them, but by providing High Peaks Resort free of charge, we can add our support and hopefully increase the good they do,” added Truett Martin, Vice President of Operations and acting General Manager of High Peaks Resort.

“This is an outstanding opportunity for the winning organizations to do whatever they want with our gift – from holding a fundraiser, offering a thank you trip to staff and volunteers, to planning an annual meeting, seminar or retreat,” Martin said.

Spring For Hope is open to all 501(c)(3) nonprofit organizations actively engaged in fundraising for their organization. Participants will be judged by a panel of community leaders on their success and impact in benefiting the communities they serve.

High Peaks Resort offers the Adirondacks’ newest and most business-focused conference facilities with expansive meeting space and the latest in conference-support technology. Located in the heart of Lake Placid, overlooking Mirror Lake and steps from historic Main Street, the entire resort will be made available to the winning non-profits.

Click Here To Apply

Eligible non-profits can apply for consideration by visiting www.springforhope.net and completing the application and other requirements. For submissions, questions or other inquiries, email the application and paperwork tolfitzgerald@highpeaksresort.com with “Spring For Hope” in the subject line; or write Spring For Hope, High Peaks Resort, 2384 Saranac Ave, Lake Placid, NY 12946; or fax to 518-523-9908, or call Lori Fitzgerald at 518-523-4411, ext. 361.

About The High Peaks Resort

High Peaks Resort overlooks Mirror Lake while anchoring Lake Placid’s Main Street for an outstanding mountain getaway experience. Surrounded by the six-million-acre Adirondack wilderness park with thousands of miles of trails for hiking and biking, and hundreds of lakes for fishing, High Peak’s 133 beautiful accommodations offer direct waterfront access. Restaurants include the world-famous Dancing Bears and Outdoors at Dancing Bears - with unsurpassed views of the surrounding mountains and Mirror Lake. Other amenities include PR’s intimate lobby bar; two indoor and two outdoor swimming pools; expanded fitness center; Aveda Spa & Salon, and complimentary waterfront activities. Guestrooms feature breathtaking views, patios or balconies; European-style bathrooms with natural stone tiling and rainfall showerheads; high-quality bedding and linens; refrigerators; flat screen televisions with cable and movies; complimentary Wi-Fi, and multi-function music systems with MP3 players. For reservations, visit www.highpeaksresort.com or call 518-523-4411, toll-free800-755-5598.

NYS Charity Compensation Probe: WSJ

WSJ.com reported that New York Gov. Andrew Cuomo's probe of executive pay at nonprofits is bumping up against some of the state's best-known charities with strong ties to the most powerful people in Albany, including the speaker of the Assembly and the governor himself.

Two weeks ago, a state task force named by Mr. Cuomo began asking nonprofits to submit detailed information to the Cuomo administration about their executive pay levels and compensation policies. The task force said it is collecting information on a rolling basis from all nonprofits that receive funding from the state.

But one nonprofit that had not received a request by Wednesday is HELP USA, a homeless housing group founded by Mr. Cuomo in the 1980s. The governor's sister, Maria Cuomo Cole, is the group's chairperson, and its board of directors includes Mr. Cuomo's campaign treasurer Richard Sirota and Jeffrey Sachs, one of his closest health-care advisers, according to HELP's website.

HELP operates homeless shelters and develops low-income housing around the nation and gets most of its $71 million budget from federal, state and city contracts and grants, according to its tax filings.

The nonprofit paid its chief executive, Laurence Belinsky, $546,000 in 2008—including a $157,000 bonus—and $508,000 in 2009, according to IRS filings. His salary is more than 40% higher than the median salary of chief executives of nonprofits based in the Northeast with operating budgets of more than $13 million, according to Charity Navigator, a prominent charity database.

Mr. Belinsky couldn't be reached for comment.

Another powerful group that hasn't received a letter is the Greater New York Hospital Association, which represents many Medicaid-dependent hospitals in the city region and pays its chief executive $2 million a year, according to tax filings.

After a reporter inquired about the status of data requests to HELP and the hospital association, a state official said on Thursday that the task force had mailed letters to the groups.

Meanwhile, one of the first groups to get the request was the Metropolitan Council on Jewish Poverty, a social service group run by William Rapfogel, the husband of the chief of staff to Democratic Assembly speaker, Sheldon Silver. Mr. Rapfogel received a $435,000 pay package in 2009, tax filings show.

A spokesman for the taskforce said all nonprofits that receive government money would eventually receive a request for information.

"There are thousands of not-for-profits that we are looking at, so we are sending the letters in waves on a rolling basis," said the spokesman.

Susan Lerner, the executive director of Common Cause, which advocates for transparent government, said the governor's investigation would be successful only if all charities are treated equally.

"You need an objective standard by which to judge what is or is not excessive compensation. Where are we headed with this?" Ms. Lerner said.

Jeff Stonecash, a Syracuse University political science professor, said Mr. Cuomo's probe was treading on politically sensitive ground. "There are some pitfalls here, but there's a lot of gain if he can get the right headlines," he said.

Josh Vlasto, a spokesman for Mr. Cuomo, said the investigation would be fair.

"Politics never got in the way of investigations before, and it won't now. If you think otherwise, just ask Pedro Espada," Mr. Vlasto said, referring to the former Democratic Bronx state senator whom Mr. Cuomo investigated while attorney general.

Mr. Cuomo's investigative foray into state-subsidized charities has been the object of much interest and anxiety around the nonprofit world. The governor has promised a wide-ranging review, an undertaking that could be handled by Attorney General Eric Schneiderman, whose office regulates charities.

The governor has been praised for drawing more attention to nonprofit executive pay as it has stretched deeper into six and seven figures. But, depending on how Mr. Cuomo navigates those loyalties and rivalries within the nonprofit world, the task force also carries political risk.

"I can't see that he isn't smart enough or ethical enough to see that it would be problematic to target only organizations with whom he has no connection," said Assemblywoman Deborah Glick, a Lower Manhattan Democrat who introduced a bill this year to limit compensation for hospital executives.

Mr. Cuomo assembled the task force in early August in the wake of a New York Times article that scrutinized the executive compensation of a Medicaid-financed nonprofit group that reportedly paid two of its top executives close to $1 million a year. He put two of his most trusted aides on the task force, Financial Services superintendent Benjamin Lawsky and State Inspector General Ellen Biben.

But the inquiry's goal hasn't been defined. The task force may hold hearings and issue a report, leading to potential regulatory changes and legislation.

Tell Governor Cuomo About Your Nonprofit!

Let's Tell Them About The Good Work Of Nonprofits
Submit Your Testimonial to NYCON & the Governor Today!

On August 3rd the Governor announced the formation of a task force charged with investigating executive compensation at nonprofit agencies (full announcement from Gov. Cuomo below).

NYCON is in agreement with the Governor that activities like those recently exposed in the NY Times that were the impetus to the formation of this task force, can have significant detrimental effects on the relationship between nonprofits and the public.

However, we also know that these types of activities are not solely a "nonprofit issue" and, furthermore, that there are many more positive stories than negative ones occurring in nonprofits.

We want to make sure the Governor realizes this too.

We are asking you to help us remind Governor Cuomo that nonprofits employ hard-working New Yorkers who provide much needed services in communities across our state.

Please send us your stories, comments and reactions to the Governor's announcement!

Let the administration know the services you provide are essential and are delivered in an ethical, honest and efficient manner that rivals any successful for-profit company. Let's remind them, and all taxpayers, that we're delivering services at costs far below our private sector counterparts, and take on contractual obligations from the State that they would never agree to, often times to our own detriment - because we exist for our mission, not profit.

Please submit your stories here.

NYCON is creating a web page dedicated to publishing your testimonials, and we encourage you to submit your stories which will be shared online and with the Governor's press office. You can also submit your comments directly to the press office at: press.office@exec.ny.gov.

Please feel free to contact our membership office if you have any questions or comments.

Thank you again for all you do and for your continued dedication to the nonprofit sector and your community.

Doug Sauer

CEO, New York Council of Nonprofits, Inc.

Governor Orders Review of Executive Compensation at Nonprofits

From the Governor's Website
Albany, NY (August 3, 2011) Governor Andrew M. Cuomo today announced that he has created a new task force to investigate the executive and administrator compensation levels at not-for-profits that receive taxpayer support from the state. The task force will be led by the New York State Inspector General Ellen Biben, Secretary of State Cesar A. Perales, the Medicaid Inspector General Jim Cox, and the Superintendent of the Department of Financial Services Benjamin Lawsky.

"Not-for-profits that provide services to the poor and the needy have a special obligation to the taxpayers that support them. Executives at these not-for-profits should be using the taxpayer dollars they receive to help New Yorkers, not to line their own pockets. This task force will do a top-to-bottom review, not only to audit current compensation levels, but also to make recommendations for future rules to ensure taxpayer dollars are used to serve and support the people of this state, not pay for excessive salaries and compensation," Governor Cuomo said.

Governor Cuomo continued, "There is a whole range of compensation levels and extremes that have existed for too long and must be reviewed. The use of taxpayer dollars must be scrutinized at every level."

The Governor's task force will determine the protocol and scope of the investigation in order to target the audit to focus on ensuring that state taxpayer dollars meant to help and protect New Yorkers, particularly the poor and indigent, are going to that purpose and are not being diverted to compensation. It will also provide recommendations for State agency policies and procedures that will ensure that taxpayer dollars are not being diverted to excessive compensation.

Commissioners from the Department of Health, the Office of Mental Health, and OPWDD will also serve on the task force.

The Governor's action follows reports of startlingly excessive salaries and compensation packages for executives at not-for-profits that depended on state Medicaid funding through the Office of People With Developmental Disabilities (OPWDD) and other State agencies.

The State's Medicaid Inspector General has the authority necessary to exclude providers from participation in the Medicaid program if it is found that they have engaged in fraudulent or abusive practices.

There are currently no state rules governing executive and administrative compensation for not-for-profits that receive state support.

According to the Department of the Budget's January 2010 preliminary analysis of not-for-profit employees contracting with the mental hygiene agencies (Office of People With Developmental Disabilities, Office of Mental Health, and Office of Alcohol and Substance Abuse Services), there were approximately 1,926 employees with annual salaries greater than or equal to $100,000. The total value of their salaries was $324.6 million, with an average salary of $168,555.

NYCON Statement on Governor's
Review of Executive Compensation:

"NYCON supports IRS and state enforcement efforts to root out those relatively few and often large institutional nonprofits, especially in health care and higher education, where charitable resources are used for the private and personal gain of executives. Such abuses are a stain on the sector and the Governor is right, public trust is integral to the mission and work of our state's charities. The Internal Revenue Service already provides compensation guidelines as set forth in the federal tax code and we believe those guidelines should be upheld.

It needs to be emphasized, however, that these cases are very much the exception.

The vast majority of community-based nonprofit employees are doing hard and challenging work at compensation levels that are far below public employees and often the for-profit sector. It should also be noted that the phrase "taxpayer supported nonprofits" is misleading as the state government contracts to buy services from nonprofits, just as it contracts with the for-profit sector; except the nonprofit is often expected to unfairly perform at below the actual cost of doing business. Perhaps it is also time to order an extensive review of the executive compensation levels of "taxpayer supported for-profit businesses."

NYCON asks the Governor to take this opportunity to go beyond the immediate executive compensation issue and take a comprehensive look at how the state's overall regulatory and business relationship with the nonprofit sector can be improved in the interest of all concerned."

Doug Sauer, CEO, New York Council of Nonprofits, Inc.
http://www.nycon.org/
1-800-515-5012, ext 103
dsauer@nycon.org

Nominate Your CPA Board Member for the 2011 Michael H. Urbach, CPA, Community Builders Award

2011 Michael H. Urbach, CPA, Community Builders Award Now Accepting Nominations
Sponsored by the New York Council of Nonprofits (NYCON) and the New York State Society of Certified Public Accountants (NYSSCPA)

Submission Accepted through August 22nd, 2011

In recognition of the important role, talents and leadership that a Certified Public Accountant (CPA) in New York State can provide as a board member for community-based charities, NYCON and NYSSCPA are pleased to announce the 8th Annual Michael H. Urbach, CPA, Community Builders Award.

The award is named in honor of the late Michael H. Urbach, CPA, former partner of Urbach, Kahn and Werlin, former NYS Commissioner of Tax and Finance and Chair of the State Employees federated Appeal, and board leader of a number of charities.

Award Criteria & Submission

Candidates must:

• Be a CPA in good standing and a member of the New York State Society of Certified Public Accountants;



• Have served as an Officer on at least 3 different charitable 501(c)(3) community-based nonprofits with service as President/Chair at least once;



• Have demonstrated exemplary board leadership resulting in significant and positive organizational impact including, but not limited to, financial turn-around, growth, and/or organizational re-structuring; and



• Preference will be given to nominees whose board leadership accomplishments have been with community-based charities.

Deadline - August 22, 2011
Nominations addressing the candidate's qualifications must be received by August 22nd. Nominators are strongly encouraged to address the candidate's qualifications related to the four (4) criteria's mentioned above and to include at least three (3) letters of support from the charities who have benefited from the candidate's volunteer leadership.

Send seven (7) packets of nomination materials to:
Urbach Community Builders Award Committee
New York Council of Nonprofits
272 Broadway
Albany NY 12204

or email the packet to Melissa Currado, Executive Assistant to the CEO at mcurrado@nycon.org.

Announcement & Presentation
The 2011 award will be formally presented at the Annual Member Meeting of NYCON slated for the afternoon of October 6th at Mohonk Mountain House, New Paltz, New York.

The Luncheon will take place during CAMP FINANCE, a two-day retreat that provides the very best in knowledge, skill and strategy sessions for your staff and volunteer leaders.

In honor of the late Harold Mandel, a certified public accountant who worked for Urbach, Kahn & Werlin in Albany, NY and retired in West Palm Beach, FL, the 2011 Urbach Honoree has the privilege to award one (1) nonprofit executive of their choice a Camp Finance scholarship in Hal's name. In 2009, Mr. Mandel's family accepted a posthumous Michael H. Urbach, CPA Community Builders Award in his tribute.


Past Urbach Award Honorees
2010
Edward S. Mucenski, CPA of Potsdam
2009
Lewis "Lew" Kramer, CPA of Chappaqua
2008
Mel Zachter, CPA of Staten Island
2007
Eugene H. Fleishman, CPA of Poughkeepsie
2006
Craig Sickler, CPA from Kingston
2005
Paul Battaglia, CPA from Batavia

For More Information
visit NYCON at http://www.nycon.org/ or contact Melissa Currado at (800) 515-5012 or mcurrado@nycon.org

NYS Unemployment Insurance Fee To Impact Nonprofit Employers

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

Schumer: Losing Tax-Exempt Status Could Be An Unfair Blow To New York’s Nonprofits

Schumer: Losing Tax-Exempt Status Could Be An Unfair Blow To New York’s Nonprofits

Report Provides County-By-County Breakdown Of The Over 6,000 New York Nonprofit Groups That Lost Tax Exempt Status – Groups Can Correct Error, But Have To Do It Soon Before Costs Go Up

Today, U.S. Senator Charles E. Schumer unveiled a new section of his website to aid New York nonprofit groups that may have mistakenly lost their tax exempt status. Schumer is strongly encouraging nonprofit groups to check a recently-released Internal Revenue Service (IRS) list, available on Schumer’s website, to ensure that they have not been mistakenly stripped of their tax-exempt status – a move that could cost these groups thousands of dollars. Schumer’s webpage was launched shortly after media reports indicated that several nonprofit groups, including the New Windsor Little League and Plattekill Public Library, were included on the list released June 8th, despite the fact that their paperwork was up to date and filed with the IRS. Several nonprofit groups were never contacted by the IRS, despite several attempts to send mailings and other communications to warn the groups of the looming deadline to avoid losing their designation as a 501(c)(3) group.

“Little leagues, public libraries, museums, meal programs, and other nonprofit organizations that are the very fabric of communities throughout Upstate New York are at risk of losing their tax-exempt status and paying thousands of dollars in penalties through no fault of their own,” said Schumer. “Whether because of a lost notice in the mail or paperwork errors, no nonprofit should needlessly lose their tax exempt status. Every nonprofit group in Upstate New York should take a moment to ensure that they won’t be forced to pay unnecessary taxes this year. I’ve launched this new page on my website to make it easy and painless for groups to make sure that they’re not on the list, and to take steps to correct the problem if they are. Remaining tax-exempt helps keep costs down while boosting fundraising for charity organizations.”

"The good work of community charities has a vital impact on the everyday lives of New Yorkers,” said Doug Sauer, Chief Executive Officer of the New York Council of Nonprofits. “Whether it is providing volunteer first responder assistance, providing food and housing to families in need, caring for our children, disabled and elderly, fostering economic development or creating and promoting arts and culture - charities are integral to our quality of life in ways that are often taken for granted. NYCON is eager to do what we can to assist those organizations whose tax status have been revoked so that they continue their important contributions."

On June 8th, the IRS released a list of 275,000 nonprofits nationwide who automatically lost their tax-exempt status because they failed to file annual reports for three years in a row. The list included over 19,000 New York organizations, including more than 6,000 across Upstate New York. While the IRS believes that many of these organizations are no longer operational, they acknowledge that some groups on the list might not have been aware of the requirement, and are taking steps to allow these nonprofits to reinstate their tax-exempt status. In making the announcement, IRS Commissioner Doug Shulman said that, “We realize there may be some legitimate organizations, especially very small ones that were unaware of their new filing requirement.”

The list includes a diverse range of nonprofit groups including sports leagues, public libraries, museums and other educational programs, conservation groups, religious organizations, business networking groups, and others. There are over 106,000 registered nonprofits in New York state, according to the New York Council of Nonprofits, employing over 1.2 million New Yorkers statewide. Included in this total are 3,000 food pantries that feed approximately 3 million people each year. Over 17,000 people work in New York museums, which help contribute over a billion dollars to the state’s economy each year, thanks to visits from 6.6 million families, senior citizens, and students. In 2010, the American Red Cross in New York responded to 3,920 local disasters, and has trained nearly 590,000 people in First Aid. The group has also trained over 168,000 people in emergency preparedness, collected over 400,000 units of blood, and helped over 66,000 military families through their Armed Forces Emergency Services and Community Outreach Programs, according to the New York Council of Nonprofits. New York charities play an important role in communities across the state, and should be allowed to continue to do their good work in a tax-exempt state that will help their bottom line, allowing the nonprofits to serve more Upstate New Yorkers.

Here is how the nonprofits who lost their tax-exempt status break down across the state:

• In the Capital Region, approximately 952 nonprofits lost their tax-exempt status.



• In Western New York, approximately 687 nonprofits lost their tax-exempt status.



• In the Rochester-Finger Lakes Region, approximately 867 nonprofits lost their tax-exempt status.



• In the Southern Tier, approximately 562 nonprofits lost their tax-exempt status.



• In Central New York, approximately 811 nonprofits lost their tax-exempt status.



• In the Hudson Valley, approximately 1,942 nonprofits lost their tax-exempt status.



• In the North Country, approximately 426 nonprofits lost their tax-exempt status.

Being included on the list means that these nonprofits are no longer eligible to receive tax-deductible contributions, and that any income the group receives may be taxed. This has the effect of raising taxes on the nonprofit, while also putting a serious damper on their fundraising. The Pension Protection Act, passed by Congress in 2007, requires tax-exempt organizations to file an information return or notice each year with the IRS. Smaller groups are required to file for the first time in 2007, and the law automatically revokes the tax-exempt status of groups that do not file for three consecutive years. As a result, the first nonprofits to be revoked under the new law saw their status removed based on 2010 returns, filed in April of this year.

Fortunately, as long as groups are aware that they have been improperly stripped of their tax-exempt status, they can take corrective action at minimal cost to the group. Any nonprofit that can demonstrate that it has met its filing requirement for one or more of the last three years can fax copies of their past tax returns to be reinstated at no cost to the group. Additionally, those groups with under $50,000 in income that have not filed tax returns over the past three years can file for reinstatement for a reduced fee of just $100. If the groups fail to file by December 31, 2011, that fee jumps to $400-850 for 2012. Due to the limited window to take advantage of cheaper and easier ways to reapply for tax-exempt status, Schumer is encouraging nonprofits across Upstate New York to check his website and the list of those that lost 501(c)(3) status to ensure that their paperwork is up to date. If a group finds that they have lost their tax exempt status, they can follow the instructions on Schumer’s website and take steps to see that it is reinstated.

The new section of Schumer’s website can be accessed by visiting http://schumer.senate.gov/Public/irs_6_22_11.htm

Nonprofits Can Win Free Gas

IT’S YOUR CHANCE TO MAKE A DIFFERENCE, AND THEN SOME.
For the 2011 Fueling Good Program, we’re focusing our support on four charitable categories: Education and Social Investment, Energy Assistance and Conservation, Environmental Protection and Restoration, and Health and Well-Being. Your organization must serve one of these interests and have 501(c)3 status to be eligible to participate. Please choose a category during registration. Thank you, and best of luck!

Get an overview of Fueling Good: http://www.youtube.com/watch?v=fvZDcdn9q5U

How it works:
· Starting June 1, nonprofits will be able to register at http://www.fuelinggood.com/ to participate in the summer program. From July 14 – August 11, local communities will begin voting at that site for charities of their choice. (The full rules/details will also be available on the site starting June 1).

· CITGO will be awarding gas to 12 nonprofits at the end of August, with more to follow in the fall.

Who is eligible?
· 501(c)3 nonprofit organizations in the 27 states where CITGO operates.

ST NED Meeting June 16th

Time: June 16, 2011 at 9:00:00 AM
Location: Wellness Center, Bath
Description:

Join other board members

Finger Lakes AFP Chapter's Annual Conference, Tuesday, June 7th

“Fundraising Communications: from Planning to Doing”
featuring keynote speaker, Kivi Leroux Miller

Kivi Leroux Miller is president of Nonprofit Marketing Guide.com and the author of "The Nonprofit Marketing Guide: High-Impact, Low-Cost Ways to Build Support for Your Good Cause" (Jossey-Bass, 2010).

Through training, coaching and consulting, she helps small nonprofits and communications departments of one make a big impression with smart, savvy marketing and communications. She teaches a weekly webinar series and writes a leading blog on nonprofit communications at Nonprofit Marketing Guide.com. She also presents highly rated in-person workshops on a variety of nonprofit marketing topics around the country. More than 2,500 nonprofits in 50 states, across Canada, and in more than 30 countries have participated in Kivi's webinars.

After many years in the San Francisco Bay Area and Washington, DC, she now lives in rural North Carolina with her husband, two young daughters, two cats, a dog, and countless backyard wildlife. She enjoys writing, volunteering, hiking, vegetarian cooking, and teaching her kids how to bake.

When: Tuesday, June 7, 2011
Location: Radisson Hotel, Corning
Time: 8:30am - 4:30pm
Cost: $75 for AFP members/$90 for non-members
- includes breakfast, lunch and snacks!

The conference will include a full-day of workshops and seminars:

"Strategies for Organizing a Twelve-Month Communications Plan" with Julie Waters, Communications Manager for the Public Affairs Office at Cornell University
"Nonprofit Storytelling: The Three Stories Every Nonprofit Should Tell" with keynote speaker Kivi Leroux Miller, president of Nonprofit Marketing Guide.com
"Nonprofit Writing Skills: How to Bring Your Writing Back to Life" also with Kivi Leroux Miller
"Writing for the Web" with Aidan Makepeace of Ancient Wisdom Productions websites and design
Reserve your space today by emailing sgriffin@foodnet.org.

VAST Meeting

Virtually all nonprofit agencies also rely on volunteers to operate. There's an organization that's purpose is to help agencies recruit and manage people who donate their time.

Volunteer Administrators of the Southern Tier or VAST is holding an open house to encourage new members Thursday. The group's current president is Candace Phelan, the Volunteer Coordinator for Southern Tier AIDS Project. STAP volunteers help with office work, outreach, teach and mentor and staff large events like the upcoming Ride-A-Thon.

Candace Phelan says, "All of the volunteer coordinators at VAST know that our agencies couldn't do what we do without our volunteer base that comes in and helps us out of their hearts. They're bringing their skills to us and it's amazing."

Phelan says VAST's membership has suffered because many nonprofits have had to eliminate full time volunteer managers, yet the agencies continue to rely on volunteers. Anyone who has a role in coordinating them can attend Thursday's open house at 11:30 am at the United Way of Broome County on the Vestal Parkway to see if VAST can help you.

Original article

Tax woes troubling future of nonprofit

The Watertown Daily Times reported that a Tompkins County nonprofit land conservation organization is worried it could lose most of its St. Lawrence County property to thousands of dollars due in delinquent taxes because assessors routinely do not recognize its efforts as tax-exempt.

"We try to protect the environment. That's our mission," Common Field Vice President Ibe M. Jonah said. "We're hoping to find a free attorney to impress on the county what we stand for."

Common Field, Lansing, has acquired more than 40 parcels in Central and Northern New York. Most of the property is in Tompkins County, where the organization has run into problems with neighbors, zoning and assessors. In St. Lawrence County, the organization has 16 parcels in 11 locations, many of them purchased at tax sales.

The organization owns 484.45 acres of land in the towns of Brasher, Potsdam, Lawrence, Gouverneur, Fine, Norfolk, Stockholm, Piercefield, Pitcairn and Hammond and the village of Norwood.

Much of the land was acquired by Common Field founder Christopher H. Muka, whose nickname is "Nature Boy," who either sold or donated the land to the nonprofit.

"I know they have applied in towns to be tax-exempt," county Director of Real Property Darren W. Colton said. "That's with the assessor. They have to qualify in the use of the land."

Common Field owes back taxes on most of its properties in St. Lawrence County but isn't in danger of losing them this year, Mr. Colton said. With the exception of one property in the town of Stockholm, all of the other assessors have denied Common Field's annual applications to be tax exempt.

Common Field filed the application for tax-exempt status annually up to two or three years ago, but no longer tries, said Stephen E. Teele, assessor for the town of Hammond, where Common Field owns 16.6 acres off Alamogin Road.

"Most of it, it's under water. It's pretty wet," Mr. Teele said. "There's a little bit of woodland. It's probably worth about $4,000."

To be tax-exempt, the land has to be held for public use, which Common Field says all of its parcels are. The trouble is, the organization does not have signs on many of its St. Lawrence County properties declaring them as public, and many are difficult to reach. The organization does not have a website. Read more here.

Save the Date for IHS Nonprofit Cafés

This is not another meeting; you are invited to join us for an informal gathering of nonprofit professionals to discuss issues and trends facing all of our organizations. The cafés are free to all attendees and will be held from 10 a.m. to 12 p.m. in the Empire Room at the Dormann Library.

• Communication and Public Relations Techniques for Nonprofits- May 24, 2011


• Nonprofit Succession Planning & Leadership Development- October 25, 2011


• HR Issues & Trends in Nonprofits- January 24, 2012

Please pre-register by calling IHS at 607.776.9467 x 226. Visit IHS for more info.

Nonprofit Compensation: What is too much? …and who decides?

Are you tired of hearing, "That nonprofit pays its employees too much!" If every nonprofit board followed IRS guidance on setting the compensation of its key staff leaders, perhaps we wouldn’t hear that refrain as often. So board members, please do your part by embracing your role as defenders of the nonprofit sector’s right to pay its employees reasonably and fairly. Help us change the conversation from, "What compensation is excessive?" to "What compensation levels will help our organization build its capacity by hiring and retaining terrific staff?"

First, know the process for reviewing the annual compensation of the executive director. Second, be aware of the downside of NOT engaging in an annual compensation review. (Bad press, lack of donor confidence, and potentially IRS penalties….need we say more?)

Background: Under federal law, a charity may not pay more than "reasonable" compensation for services rendered. Although the Internal Revenue Code does not require charities to follow a particular process for determining the appropriate level of salary and benefits, it is clear that compensation for board members, officers, key employees (and others in a position to exercise substantial influence over the affairs of the nonprofit) should be determined by persons who are informed about what comparable nonprofits pay their employees, and who have no financial interest themselves in approving the compensation. (Source: IRS, Governance and Related Topics - 501(c)(3) Organizations 3-4 (2008)). These are the general guidelines offered by the IRS – but the IRS Form 990 offers specifics.

The IRS Form 990 asks nonprofits about the three-step process used to approve the compensation of the executive director/CEO (and certain other key employees): Did the process for determining compensation of the following persons include a (1) review and approval by independent persons, (2) comparability data, and (3) contemporaneous substantiation of the deliberation and decision?(See Section VI, Part B, line 15, of the Form 990.) Nonprofits that follow this three-step process are generally able to take advantage of what the IRS refers to as a "rebuttable presumption" that the compensation is reasonable, thereby protecting the nonprofit and the board members from sanctions that can be imposed by the IRS if it finds that the compensation was not reasonable.

Visit the National Council’s website for more information on how to measure comparability of compensation, and visit the IRS website for background on what can happen if a board fails to demonstrate it followed this 3-step rebuttable presumption process [hint: intermediate sanctions].

Demonstrating that your nonprofit has approved the compensation of the executive director/CEO in a thoughtful, deliberative process is a basic fiduciary responsibility of every nonprofit board. Here are some pointers:

• The process of reviewing executive compensation should recur whenever there is an adjustment to the executive director/CEO’s compensation.

• Having a written policy can help keep the process on track. ( See sample policy).

• The "executive compensation review" should be conducted by persons who are "independent" (not paid by the nonprofit). Many nonprofits use a sub-committee, such as a "compensation committee" made up of board members and volunteers, or the executive committee, to conduct the initial review and then make a recommendation to the full board.

• Having the full board approve the compensation of the executive director/CEO is consistent with being a transparent and accountable organization.

• Documentation of what the board’s decision was based on (such as comparability data) and of the fact that the board carefully deliberated and approved the CEO’s compensation is critical. Minutes of the meeting should include enough details so that if the board’s decision is questioned, the process the board used to determine that compensation is "reasonable" will be clear.

• "Compensation" means both salary and benefits, so if an executive director receives a salary but also other fringe benefits such as insurance, or a car or housing allowance, all those elements must be totaled together to determine the annual compensation.

There are many more resources on the National Council’s website, including a sample Policy for Review of Executive Compensation and a link to a virtual seminar on this topic presented at a symposium at Columbia Law School for state charity regulators by legal experts on executive compensation for tax-exempt organizations.

Read about additional governance policies that your nonprofit’s board should be aware of.

Fiscal Sponsorship = Sharing Tax-Exempt Status

How can a nonprofit raise money if it is not tax-exempt?

An organization that is not tax-exempt (either because it has not yet been recognized as tax-exempt by the IRS or has had its exemption revoked) can arrange with another organization that is tax-exempt to serve as its "fiscal sponsor." The role of the fiscal sponsor typically includes handling the administrative responsibilities of receiving and administering charitable contributions on behalf of the sponsored organization. (The fiscal sponsor may be paid a reasonable fee for this administrative service.)

In essence, fiscal sponsorship is a relationship in which the tax-exempt status of one organization is effectively shared with a sponsored organization/program. The sponsored organization benefits because contributions are made to the fiscal sponsor (which is tax-exempt). This allows donors to receive a deduction for their contribution, which generally smooths the way for financial support.

• Because of the administrative responsibilities involved, it is best to memorialize fiscal sponsorship arrangements in a formal written agreement.
• There are other reasons to consider a fiscal sponsorship relationship in addition to fundraising. Many organizations rely on their fiscal sponsor for other functions, such as bookkeeping, human resources, and various administrative roles.

Did you know?
The IRS will soon release a list of nonprofits that have had their tax-exempt status automatically revoked for failure to file 990s with the IRS for three consecutive years. If a nonprofit loses its tax-exempt status but still wants to fund its operations on a temporary basis while it reapplies for tax-exempt status with the IRS, it will need a way to continue to attract deductible contributions in order to deliver its mission in the community. Fiscal sponsorship may be one answer.

Read all about fiscal sponsorships from the Resources section on the National Council’s website: what they are, why an organization might consider using a fiscal sponsor, and what risks and advantages they provide to the nonprofit serving as a fiscal sponsor.

• Looking for a fiscal sponsor or willing to serve as one? Search or sign up using the Fiscal Sponsor Directory. Local community foundations and State Associations may also be helpful resources for finding fiscal sponsors. Some organizations that serve as incubators/fiscal sponsors are listed on our website.
• Stay out of trouble with this post by NonprofitLaw Blog author Gene Tagaki, Esq., that offers advice about what to avoid when engaging in fiscal sponsor relationships: Fiscal Sponsorship – Six Ways to Do it Wrong.
• If your organization is considering becoming a fiscal sponsor, or using one, read about recommended best practices for fiscal sponsors developed by the National Network of Fiscal Sponsors.
• Put it in writing! Suggestions for what to include in a written agreement or memorandum of understanding between a fiscal sponsor and the sponsored organization are set forth on page 5 of this monograph: On Comprehensive Fiscal Sponsorship, by Joshua Sattely, Third Sector New England (2009).
• Debunk the myths and learn about the untapped potential of fiscal sponsorships from this report, More than Money- Fiscal Sponsorship’s Unrealized Potential, BTW Consultants, (May 2007).
• Before you take the plunge, learn from others: The experiences of 200 fiscal sponsors are described in the Fiscal Sponsorship Field Scan, a report based on the first-ever survey of fiscal sponsors conducted by the Tides Foundation (2006).
• More fiscal sponsorship resources from CompassPoint.

How could a nonprofit lose its tax-exempt status?

A nonprofit could lose its tax-exempt status in a number of ways.

• Read about risky activities that – when engaged in by a nonprofit – could jeopardize tax-exemption.
• Most tax-exempt organizations, other than churches, must file an annual return (Form 990) with the IRS – if they do not, they face automatic revocation if they fail to file annual reports for three consecutive years.
• Check the at-risk list. The IRS website provides a state-by-state list of organizations at-risk of losing their tax-exempt status. In some states there are over 12,000 organizations (just in that state) listed!

Guidance for donors to section 501(c)(3) organizations: You may rely on the organization’s determination letter or listing in Publication 78 to deduct contributions until the IRS publishes a notice on IRS.gov that the organization’s 501(c)(3) exempt status has been automatically revoked.