Thursday, April 30, 2015

Southern Tier Capacity Building Workshops [Binghamton]

Having trouble viewing this email? Click here

How to be an Engaging Nonprofit (Part 1) [Binghamton]
The Role of Authentic Communication, Conversation and Caring in Fundraising 
We've heard about the importance of messaging and marketing and their role in fund development for nonprofits.  We know that, in order to reach people who might care about our cause and give something (time, talent and treasure), we have to "sell" what we do to the right audience. For many nonprofit staff and board members, this nomenclature doesn't quite fit with what we do on a daily basis - nor is it something we've been trained for.
For more information and to register, click here.

In Part 1 of this session (June) we will focus on:
  • Being true to who you are.
     Who are you as a nonprofit? Does your nonprofit have an organizational personality, culture, voice? What do you stand for, work for, fight for, and lose sleep for?  Does everyone on the board and staff agree?
  • Being honest with those that care about you.
     How do you communicate your values? How do you live them every day? How transparent are you with successes and challenges you may face?

How to be an Engaging Nonprofit (Part 2) [Binghamton]

Part 2 of this session (July) will focus on:
  • Being kind and generous
     Show people that you care. What do you have that people value? How can you give it away for free? How do you strategically leverage that to keep friends engaged in the relationship cycle?
  • Creating a safe place for valuable conversation
     How do you actively listen and converse with those that care about you? How do you show people that you value what they say and most importantly, how do you demonstrate that you are responsive?
  • Asking for help or feedback
     How do you finally ask for "action?" Whether it's a donation, attendance at an event, volunteers for a project, etc. How do you make it feel like the next authentic step in the relationship? Have you done enough to build trust? Have you created a relationship in which people feel like your partner?
  • Continuing the Engagement
     How do you build the engagement cycle into your strategy on an on-going basis?
To register for this workshop, click here.


These workshops are supported by United Way of Broome County, The Stewart W. and Willma C. Hoyt Foundation, The Community Foundation for South Central New York, and Conrad and Virginia Klee Foundation.




About the Southern Tier Capacity Building Mini-Grant and Assessment Programs: 
Nonprofits who have a Board Member attend will qualify to apply for the 2014 Southern Tier Capacity Building Mini-Grant Program, as well as special assessment support offered directly by the New York Council of Nonprofits.

The  Mini-Grant Program and special assessment assistance are supported by United Way of Broome County, The Stewart W. and Willma C. Hoyt Foundation, The Community Foundation for South Central New York, Conrad and Virginia Klee Foundation, and United Way of Delaware and Otsego Counties, Inc.

This email was sent to by  

New York Council of Nonprofits
 | 272 Broadway | Albany | NY | 12204

Click here to report this email as spam.

Monday, April 27, 2015

Risk Management: Directors of Nonprofits

Court of Appeals to Directors of Nonprofits: “Nonprofit” Does Not Mean “No Risk for You”


The U.S. Court of Appeals for the Third Circuit recently upheld a $2.25 million jury verdict against the directors of a nonprofit nursing home, holding them personally liable for breach of their duty of care. Their sin? Failing to remove the nursing home’s administrator and CFO “once the results of their mismanagement became apparent.” While the court overturned a punitive damages verdict against five directors (the jury had found nine other directors liable for compensatory damages but not punitive damages), it upheld punitive damage awards of $1 million against the CFO and $750,000 against the Administrator. The decision, while unusual, illustrates that serving on a nonprofit board is not risk-free even if as in this case, the directors do not breach their duty of loyalty or engage in any self-dealing. [In re Lemington Home for the Aged, 777 F.3d 620 (3d Cir. 2015).]

The Lemington Home Case

Founded in 1883, the Lemington Home for the Aged was the oldest nonprofit unaffiliated nursing home in the United States dedicated to the care of African Americans. For decades, the Home had been “beset with financial troubles” and by the early 2000s it was being cited by the Pennsylvania Department of Health for deficiencies at a rate almost three times greater than the average.

In 2004, the Home’s Administrator [Mel Lee] Causey started working part-time while continuing to draw a full salary. That same year, two patients died under suspicious circumstances; an investigation by the Department of Health found that Causey lacked the qualifications, knowledge and ability to perform her job. An earlier independent review also recommended that Causey be replaced. Although the Board obtained a grant of over $175,000 to hire a new Administrator, the funds were used for other purposes and Causey stayed on.

The Home’s patient recordkeeping and billing were in a state of disarray. The Home was cited repeatedly for failing to keep proper clinical records. CFO Shealey stopped keeping a general ledger, instead simply recording cash transactions on an Excel spreadsheet. When a consultant conducting an assessment of the Home for a major creditor requested records, Shealey responded by locking himself in his office, forcing the consultant to “camp outside.” Shealey also failed to collect at least $500,000 from Medicare because he stopped sending invoices.

In January 2005, the Board voted to close the Home, but concealed that fact for three months before filing for bankruptcy. In those three months, the Home stopped accepting new patients, making it less attractive to potential buyers. While in bankruptcy, the Board failed to disclose in its monthly operating reports that the Home had received a $1.4 million payment, which could also have increased its chances of finding a buyer. The court held that these facts supported the jury’s verdict that the defendants had “deepened” the corporation’s insolvency, which the court said was actionable under Pennsylvania law. [777 F.3d at 630.]

The court of appeals upheld the jury’s compensatory damages verdict against the directors despite the Home’s bylaw provision protecting the directors from claims for simple negligence and requiring proof of selfdealing, willful misconduct or recklessness. [Lemington, No. 10-800, 2013 WL 2158543, at *6 (W.D. Penn. May 17, 2013).] Both the court of appeals and the district court held that the evidence supported a finding that the directors breached their duty of care by recklessly (1) continuing to employ the Administrator despite actual knowledge of mismanagement and despite knowing that she was working only part-time in violation of state law; and (2) continuing to employ the CFO despite actual knowledge of mismanagement, including his failure to maintain financial records. [777 F.3d at 628-30; 2013 WL 2158543, at *7; In re Lemington Home for the Aged, 659 F. 3d 282, 286-87 (3d Cir. 2011).] Despite these holdings, the court of appeals reversed the award of punitive damages against the five directors, holding that there was insufficient evidence that they possessed the requisite state of mind and no evidence of self-dealing. [777 F.3d at 634-35.]

The Result in Lemington Home: Unusual But Not Unique

Lemington Home is not the only case in which a court has held that directors of a nonprofit breached their fiduciary duties. Other cases—some new and some old—show how directors of nonprofits sometimes find themselves in the crosshairs, especially after an institution fails.

Perhaps the best-known case is Stern v. Lucy Webb Hayes Nat’l Training School for Deaconesses & Missionaries, 381 F. Supp. 1003 (D.D.C. 1974), where the district court held that the directors breached their fiduciary duties of care and loyalty by failing to supervise the nonprofit’s finances and by approving transactions that involved self-dealing. The court found that the board’s finance and investment committees had not met for over a decade, and the directors had left management of the nonprofit to two officers who worked largely without supervision. Nevertheless, the court declined to award money damages against the directors, opting instead to impose certain reforms on the board.

Starting in 2007, seven years of litigation (and millions of dollars in legal fees) ensued between two nonprofits interested in the creation of a memorial to Armenians who died during the First World War and two of their directors; the nonprofits lost their claims against the directors and ended up having to indemnify them. The district court denied summary judgment on the issue of whether the directors had breached their fiduciary duties but then concluded after a bench trial that the directors’ decisions and the process by which they made them were reasonable and, even if the directors had breached their duty, the corporation could not show that it suffered injury as a result. Armenian Genocide Museum and Memorial, Inc. v. The Cafesjian Family Foundation, Inc., 691 F. Supp. 2d 132 (D.D.C. 2010); Armenian Assembly of America, Inc., et al., v. Cafesjian, 772 F. Supp. 2d 20 (D.D.C. 2011), aff’d, 758 F.3d 265, 275 (D.C. Cir. 2014).

In 2010, the National Credit Union Administration sued the unpaid volunteer directors of Western Corporate Federal Credit Union seeking $6.8 billion in damages on account of the directors’ alleged failure to supervise the credit union’s investment decisions. The credit union had invested heavily in diversified portfolios of securitized mortgage-backed securities; when the credit crisis hit, the NCUA took over the credit union (much the way the FDIC takes over failed banks) and sued the former directors and officers. The district court granted the directors’ motion to dismiss, holding that the directors were protected by the business judgment rule. Nat’l Credit Union Admin, v. Siravo, et al., No. 10-1597, 2011 WL 8332969, *3 (C.D. Cal. July 7, 2011). (Two of the authors of this feature represented all directors and one officer in this litigation.) The officers did not fare as well; the court held that the business judgment rule did not protect them, and at least some officers ended up paying some money to the NCUA and suffering other sanctions.

These cases are unusual, which goes a long ways toward explaining the unusual rulings. Generally, absent fraud, bad faith, a conflict of interest, a wholesale abdication of responsibility, or decisions that are clearly unreasonable based on facts known at the time, the business judgment rule will protect directors of nonprofits from personal liability for a breach of the duty of care. But vindication can take years of litigation and lots of money.

What Are the Lessons of Lemington Home?

You can be sued. To be sure, directors of for-profit corporations are sued far more often than directors of nonprofits, but directors of nonprofits can be sued, nonetheless. 

If you are sued, the litigation can go on for years and be very expensive—even if ultimately you are vindicated. 

Because litigation—even unmeritorious litigation—can be expensive, directors should not serve without the protection of adequate directors’ and officers’ insurance (D&O insurance).

Directors of nonprofits, despite usually being volunteers, can face personal liability for breach of their fiduciary duties and will be held to much the same standard of care as directors of for-profit corporations.

Some states have enacted statutes dealing specifically with nonprofit directors’ duty of care. Pennsylvania has such a statute: 15 Pa. Cons. Stat. Ann. § 5712 (2011). [See Lemington, 659 F.3d at 290. Likewise, California has such a statute: Cal. Corp. Code § 7231.] But it is far from clear that these statutes offer directors of nonprofits any more protection than they offer directors of for-profit corporations; the differences are subtle, at best.

The business judgment rule offers directors some protection, but it is not an all-purpose shield against claims based on dereliction of duty, let alone disloyalty or self-dealing. To gain the protection of the business judgment rule, a director must be assiduous and informed before making decisions. Specifically: 

The board must supervise: it must ensure that the organization’s management are qualified to perform their duties and are actually performing those duties. The failure of the directors in Lemington Home to do this led to their being jointly and severally liable for $2.25 million in damages [777 F.3d at 626, 628.] 

The board must seek and follow independent expert advice where appropriate: the directors in Lemington Home failed to follow the recommendations of independent advisors to replace the Administrator, even after being awarded funds to do so. They also ignored the advice of their bankruptcy counsel. [Lemington, 2013 WL 2158543, at *7.]

Special care must be taken if the nonprofit veers toward insolvency:

Before filing for bankruptcy, consider conducting a viability study. In vacating the award of summary judgment for defendants, the Third Circuit in Lemington Home noted that the Board declined to pursue a viability study before filing for bankruptcy and suggested that this called into question the adequacy of their pre-bankruptcy investigation. Lemington, 659 F.3d at 286, 292. Beware the “deepening insolvency” theory. Although not recognized in every jurisdiction, the theory holds directors and officers accountable to creditors if their post-insolvency management increases the losses that creditors suffer.

This article was originally published as a “Client Alert” on on March 27, 2015. It is reproduced with permission.

Monday, April 20, 2015

New "Foundation Landscapes: Education" Website Provides a One-stop Resource for Education Philanthropy

Foundation Center Introduces Foundation Landscapes: Education

New Website Provides a One-stop Resource for Education Philanthropy

New York, NY — April 1, 2015. Foundation Center, the leading source of information about philanthropy worldwide, introduces Foundation Landscapes: Education, a new online portal that serves as a hub of information about education philanthropy.
This website draws dynamically from a variety of Foundation Center information resources to provide a central, comprehensive source for the most current education-related reports, news, case studies, funding data, and other digital content.
Education is one of the largest program areas within the philanthropic sector. U.S. foundations dedicate on average more than 20 percent of their overall grantmaking to education-related purposes each year. Education funders, policymakers, educators, and others can now access a wealth of high-quality information resources all in one place — a convenient, efficient way to find quick facts and figures, receive alerts, and stay informed about education funding.
"Foundation Landscapes: Education helps funders and others scan the field, track what their colleagues are doing, and assess their own work in the context of broader trends," said Lisa Philp, Foundation Center's vice president for strategic philanthropy. "This is part of our growing array of Knowledge Services that blend information, analysis, and technology to benefit the social sector." These data-driven tools and content-rich platforms developed by Foundation Center are designed for funders and their networks, consultants, advisors, and grantees. A brand-new section of Foundation Center's website,, makes it easy to review and explore the full set of offerings, including Foundation Landscapes.
Foundation Landscapes: Education can be accessed at; it is made possible through generous support from the Arthur Vining Davis Foundations.
Share on Twitter: New one-stop resource for #education #philanthropy from @fdncenter. Read

About Foundation Center
Established in 1956, Foundation Center is the leading source of information about philanthropy worldwide. Through data, analysis, and training, it connects people who want to change the world to the resources they need to succeed. Foundation Center maintains the most comprehensive database on U.S. and, increasingly, global grantmakers and their grants — a robust, accessible knowledge bank for the sector. It also operates research, education, and training programs designed to advance knowledge of philanthropy at every level. Thousands of people visit Foundation Center's website each day and are served in its five regional library/learning centers and its network of more than 470 funding information centers located in public libraries, community foundations, and educational institutions nationwide and around the world. For more information, please visit or call (212) 620-4230.

The Provider - Weekly Update

National Volunteer Week 2015: The Impact of Volunteerism
Highlighting the Collective Power to Make a Difference

The impact of volunteerism in our community ranges from volunteer drivers helping seniors and others without adequate transportation get to medical appointments, to food pantry volunteers sorting and packing food, to those helping with literacy programs and many more.

National Volunteer Week acts to "Celebrate Service", and we would like to take this opportunity to say THANK YOU! to those who give their time and talent to the important work of making the Southern Tier a great place to live.

Check out how Volunteer Drivers with Steuben Coordinated Transportation made a difference in 2014!

More #NVW2015 Updates:

Upcoming Events
April 2015



Provider Online
Nonprofit News in the Southern Tier

Walk a Mile in My Shoes - 10th Annual Suicide Prevention & Awareness Event

Families in Crisis: Strategies for Defusing, Defining, and Problem Solving - Training presented by Family Service Society Professional Training Institute

Pathways, Inc. presents An Encore with The Matt Savage Trio

"The Bridge Between Suicide and Life" Sponsored by Walk a Mile in My Shoes

Chemung County Senior Games Applications Now Available - Registration Deadline: April 17th

IHS Marketing Materials Online Request Form - Order free materials to share with your clients, colleagues, or friends!

Are you a Member Agency? If so, submit news, announcements, events, and more to to be posted on Provider Online and featured in this newsletter!

Opportunities for You
 Hot Jobs & Ways to Give Help

AmeriCorps Southern Tier Opportunity Corps
Corning Community YMCA
Economic Opportunity Program, Inc.
One Seventy One Cedar, Inc.
Pathways, Inc.
Pro Action of Steuben & Yates, Inc.
Are you 55 and older?  Learn about how you can become involved with the Senior Employment Program!
Southeastern Steuben County Habitat for Humanity, Inc.
Steuben County
The Arc of Steuben
Trinity of Chemung County
United Way of the Southern Tier, Inc.

Volunteer Drivers Needed Steuben Coordinated Transportation

Girls on the Run of the Southern Tier 5K Celebration Volunteer Opportunities Available - Learn More!

Register here to find local opportunities to  help, express interest in those opportunities, and/or to be a potential volunteer in times of disaster.  


This Weekly Provision Brought to You By:
IHS Full Logo New
6666 County Road 11 | Bath, New York 14810 | 607.776.9467 | 607.776.9482


 Like us on Facebook    Follow us on Twitter    View our profile on LinkedIn    View our videos on YouTube

This email was sent to by  

Institute for Human Services
 | 6666 County Road 11 | Bath | NY | 14810

Click here to report this email as spa