Time's Up! What You Need to Know about Your 990

I'm a little late on posting this one, the deadlines mentioned in this article have passed.  However, I felt it was important to post if only to remind people to check on their filing status, contact the IRS if necessary and find out what needs to be done.  For many small nonprofits, timely and proper filing can be a struggle.  I am also reminded that nonprofits in every country have to be familiar with their own laws.  Thanks to Nonprofit Quarterly for sending me this article.  Bunnie

Time's Up! What You Need to Know about Your 990

by Jeff Narabrook, Thomas H. Pollak, and Katie L. Roeger

If the number of nonprofits registered with the IRS shrinks by 20 percent this year, don’t blame it on an ailing economy. A simpler explanation is available: thousands of small nonprofits may not meet a new filing deadline, causing revocation of their tax exempt status and removal from the IRS list.


Most nonprofits with fiscal years of January 1–December 31 and revenue under $25,000 had 3 years—or until May 17 of this year—to file form 990-N or lose their federal tax exemption. Active organizations that do not file will face fees and lost time as they reapply for their exemption unless reasonable cause is shown for not filing.

But the true story behind any large drop in registered nonprofits may prove to be that long-defunct organizations are finally being removed from the IRS list. An unknown number of inactive organizations are thought to be on the list because, unlike larger organizations that must annually file Form 990 or Form 990-EZ1, small organizations with receipts under $25,000 never had to file annual documents with the IRS. With no further IRS contact ever required, they would remain on the list indefinitely even after ceasing operation unless someone thought to update their status with the agency.

Consequently, the total number of active nonprofits registered with the IRS was long thought to be misleading. Addressing this blind spot in its regulatory system, a provision in the Pension Protection Act of 2006 gave small organizations a three year window to start annually filing the newly created Form 990-N, commonly known as the e-Postcard.[1] That deadline is now only days away for organizations operating on the calendar year.

The public won’t know exactly how many organizations were removed from the list until the IRS starts releasing the information in January 2011, but to get a sense of the large numbers that may drop off the IRS rolls, begin with over 1.5 million─the total universe of nonprofit organizations of any size registered with the IRS in April 2010. Forty percent of those are small organizations that under the 2006 provision are now required to file 990-N2. Approximately 343,000 of those met the filing deadline as of May 1, leaving over 340,000 or 21 percent of all registered nonprofits that have not filed—and that may need to reapply for tax-exemption. (214,000 of these organizations will lose their tax-exempt status on May 18th, 2010. The remaining organizations operate on different fiscal years and have some additional time.)

How many of those 340,000 groups are still active is an open question. The National Center for Charitable Statistics (NCCS) at the Urban Institute attempted to contact a random sample of 100 organizations that had not filed in the past three years and was only successful in reaching 25 of the organizations. Many organizations have been on the IRS list for decades; 47,000 of them were incorporated before 1950 and over 40 percent were registered sometime before 1980.

While some of the organizations may have ceased to exist long ago, it’s also easy to see how active organizations may have never heard of the requirement. The list of non-filers includes 30,000 sports and recreation clubs, 15,000 student fraternity and sorority groups, 17,000 community service clubs, 17,000 veterans’ organizations, and 8,000 parent teacher groups. Although the IRS used a variety of mediums and outreach methods to publicize the filing deadline, direct communications to these organizations were sent to the last address on file with the IRS. Because most organizations of this size are run by volunteers with addresses at the home of the board president or treasurer, the notices may have never reached the necessary person if no one voluntarily updated their address file with the IRS after a change in leadership.

The cost will be significant for those that lose their exemption and need to reapply. They will have to pay the standard application fee of $400 or $850 depending on anticipated gross receipts. A new IRS Web-based application system in the works would provide a cheaper $200 online application option. But assuming only a quarter of the organizations that have not filed are in fact still operating and will have to reapply before the online application is available, it would drain between $127 million and $272 million dollars from the nonprofit sector just to have their status’ reinstated.

Organizations that missed the deadline will have their status’ revoked immediately and will not be permitted a filing extension. Those that were never notified of the change and missed the deadline may want to make a case for retroactive reinstatement of their tax status, which the law provides if reasonable cause can be shown for failure to file.

While speaking at the Urban Institute’s annual Form 990 Meeting in May of this year, Lois G. Lerner, director of the exempt organizations division of the I.R.S, stated that organizations that had received two or three notification letters, but did not find the time to file the 990-N would not considered a reasonable cause, but each case will be handled individually. Lerner also mentioned that the IRS will be “extremely careful” in notifying the public that an organization has lost its tax-exempt status. In fact, between May 2010 and January 2011, only the IRS will know the organizations whose status has been revoked. Donations to organizations that missed the deadline will remain tax deductible until public notification of the revocation is given on the IRS website.

Time will show just how many inactive nonprofits were lingering on the IRS rolls. The best thing organizations can do is to see if they need to come into compliance by visiting the Urban Institute’s National Center for Charitable Statistics searchable database of organizations that are required to file but have not. If they find they are on the list, an officer from the organization should file Form 990-N through an approved IRS 990-N e-file provider here. Those who know of small nonprofits with receipts under $25,000 in their community are encouraged to notify the organization’s officers of the requirement so that they can take immediate steps to address the situation.

[1] Organizations not required to file a Form 990 include churches, integrated auxiliaries of churches, conventions or associations of churches, 501(c)(1) government organizations, black lung trusts, and instrumentalities of states or political subdivisions.

Jeff Narabrook is the public policy assistant at the Minnesota Council of Nonprofits; Katie L. Roeger is the Assistant Program Director of the National Center for Charitable Statistics at the Urban Institute; Thomas H. Pollak is the Program Director of the National Center for Charitable Statistics at the Urban Institute.

Trends In Giving

One of the most positive people I have come across is Jenai Morehead.  Her energy just spills out in her writings and posts.  Here she talks about how times have changed and how we need to change with them.  On another point, and relevant to this conversation, Charity Channel has just published a new book called Fundraising as a Career:  What, Are You Crazy?  Read more about it at Charity Channel.  But back to Jenai, ok, so I have to pick up the phone?  Raising money for your beloved organization can feel like direct selling sometimes...and hardly anybody likes that, but, if you remember that it is your "beloved" organization, it may help you get past the "I hate asking people for money" gitters.  Bunnie

Trends In Giving
by Jenai Morehead

Times have changed. Nonprofits have been economically challenged to operate and give at a level that continues to satisfy the purpose for which they were created.

So what are they doing?

Over the last year I did some ground level observations and research for my clients. They needed answers to find money and resources to remain sustainable. The basic question: Is there any money out there? If so, how do I access it?

I studied two areas: Private foundations and public nonprofits. Normally known as grantors and grantees; those who give money and those who receive money. I came up with some interesting observations while attending several regional meetings of the Association of Small Foundations.

This wonderful organization is a gathering of small grantors whose members give generously to their regional nonprofits. It is also a resource of education to the founders and executive directors of these organizations. In one meeting founders were finding it increasingly hard to continue to pour money into their private foundations while their businesses were struggling. With employee contributions down they began coming up with creative ways to serve their constituents.

Most of the creativity was in capacity building services. Nowadays grantors are showing nonprofits “how to fish” as well as clean it, fry it and serve it. Services that public nonprofits normally would have to pay for are now being offered as capacity builders in lieu of cash grants. Sadly, a few foundations could not continue into legacy and are seeking advice as to the proper closure of their nonprofit affairs.

Believe it or not, picking up the phone and asking if there is funding available, is now in style. Because of this, I have changed the way I serve my clients. Once I match my client’s mission and goals with a funder, I pick up the phone and call the grantor myself. Executive Directors are now answering the phones and are more available to the public. With recent cutbacks and layoffs people are becoming more accessible. During the last few months I rarely have to go through more than one person to find someone who can answer my questions. If I leave a message or an email I usually get a personal response in less than 24 hours. This is straight across the board for small and large nonprofit foundations. Layoffs are causing a “nervous” productivity and founders are looking for more “bang” for their buck.

I have also found that arbitrarily writing letters does not work. Many nonprofits have wasted time sending out bulk mail without first reading guidelines. It takes more than writing “merge mail” letters to get funding. Showing determination and reading instructions is a quality that will get you a conversation with someone who can answer questions.

When I call a foundation, I introduce myself and my company. I have pen in hand and usually ask a combination of the following questions:

• Name and position of the person I am speaking too (if I don’t already know)

• I tell them briefly about my client’s project and ask if it matches their mission and goals for funding. If not, I ask if their priorities have changed and what are they? Example: One company’s priority switched to green energy projects. Another is only funding projects that are directly impacting people and are not giving capital for equipment or overhead.

• I ask them if they are funding any projects at all and, if so, which ones? If not, when will they expect their funding cycles to begin?

Grantors always give me straight answers and sometimes give me insight to the way their boards will view my proposals. They will never tell you if they can fund your project, but will help you not to waste your time and theirs.

Today, grantor’s expectations are more stringent. The most common conversation I have with foundation administrators is to make sure your program is sustainable, measureable and able to be duplicated. They want to make sure your organization has a plan of financial support before and after the grant; that the program objectives and outcomes can be measured and that the program can be duplicated for the good of others.

With these tips I hope you are on your way to feeling more comfortable about approaching grantors with candid questions that will help you make prompt decisions about funding for your organization.

Contact Jenai at Jenaimorehead at aol dot com

2010 Foundation Growth and Giving Estimates

The Foundation Center has been one of the most important nonprofit resources for years.  Along with providing training for grant seekers, they also conduct amazing research to help nonprofits navigate giving trends.  This year is no exception as they publish their 2010 report "Foundation Growth and Giving Estimates."  While their findings may seem a bit depressing regarding the reductions in grants and giving, it is important for nonprofit boards and staff to understand the trends in order to adjust their behaviors accordingly.  Below I have excerpted a few key points, but I urge you to go to the Foundation Center and download the entire report.

On a personal note...while the current state of the economy can certainly be stressful for all who work in nonprofits, I'd like to encourage you.  The beauty of adding a few years to your life is that it gives you perspective.  In the late 1970's and early 1980's there was a terrible recession that matched what it is we are experiencing today.  I remember record unemployment, businesses going under, nonprofits struggling.  It won't always be this way, things do go through cycles.  Your challenge is to retain optimism and to do the best you can with what you have.  I hope the articles we provide here give you good information and tools to meet the challenges before you!  Bunnie

2010 Foundation Growth and Giving Estimates
A Report of the Foundation Center by

Steven Lawrence, Director of Research and Reina Mukai, Research Associate

Overview, Page 1

"The worst economic crisis since the Great Depression resulted in the biggest reduction in U.S. foundation giving on record. In 2009, the nation’s more than 75,000 grantmaking foundations cut their giving by an estimated 8.4 percent, or $3.9 billion, to $42.9 billion. Since the Foundation Center began tracking foundation giving in 1975, current-dollar giving had declined in only three
years—1983, 2002, and 2003—and in each year by less than 1 percent.

Despite its unprecedented severity, the reduction in 2009 foundation giving could have been worse. According to a 2009 Foundation Center survey, roughly four out of five foundations indicated that they determine their grants budgets based primarily on their assets, with half of these funders basing their calculations on their prior year’s assets (see Foundations Address the Impact of the Economic Crisis at foundationcenter.org). Given the 17.2 percent drop in foundation assets recorded in 2008—a $117.3 billion loss—a larger reduction in giving would not have been surprising.

Several factors helped to moderate the overall decline in foundation giving. Among foundations that base their grants budgets on their asset values, more than one-quarter do so using an average of their asset values over the prior two-to-five years. During less volatile economic periods, this practice allows grantmakers to maintain more stable levels of giving. In the current period, it enabled foundations to average in the asset growth in years prior to 2008, which lessened the amount by which they had to reduce their giving in 2009."

Community Foundations, Page 7

"Historically, community foundations have tended to fare relatively better in both more and less prosperous times from having a broad pool of individual donors. Decreased giving by some donors would tend to be balanced out by increased contributions from others. Community foundations also experienced a more modest reduction in their assets in 2008 (-12.5 percent) relative to independent foundations (-19.2 percent). Nonetheless, as institutions that must raise funds, community foundations may have been particularly hard hit by the economic panic that led individuals to pull back drastically on their personal consumption and charitable contributions."

Community foundations may also face restrictions on giving through their donor-advised funds, specifically with funds stipulating that their current value cannot drop below the value of the donors’ original contributions. Especially for donor funds established in recent years, their values may not return to the level of the donors’ original contributions until the market regains all of its 2008 losses, which could take a number of years.

Despite reductions in giving, community foundations have been leaders in responding to needs generated by the economic crisis. According to a Foundation Center survey conducted at the height of the crisis in early 2009, 35 percent of community foundation respondents were engaging in special initiatives to help their communities cope with repercussions from the economic downturn, such as rising unemployment and homelessness. By comparison, about 14 percent of overall foundation respondents reported providing exceptional support related to the crisis (see Foundations Address the Impact of the Economic Crisis at foundationcenter.org). To date the Foundation Center has tracked nearly $60 million in grants and program-related investments from community foundations that specifically addressed the economic crisis (see foundationcenter.org/focus/economy)."


Read the full report at 2010 Foundation Growth and Giving Estimates (The Foundation Center)

Website Best Practices for Nonprofits

It's always good to go back over the basics when it comes to website design and functionality.  Antoine Dubeauclard points out some basics we all should be thinking about.  I particularly like the idea of thinking about functionality.  Can I get the information I need easily and quickly?  How many times have I been to websites that "bury" content and then become frustrated trying to find what I want.  Also, if I want to donate money to your organization, will you make it easy for me?  Bunnie

Website Best Practices for Nonprofits
By Antoine Dubeauclard, President of Media Genesis

Keeping pertinent and updated resources readily available to people is what many nonprofit organization hope to achieve with their website, yet many still fall short.

Using Focus: Hope as an example, I would like to point out some best practices for nonprofit websites.

Focus: Hope is a Detroit civil and human rights organization that has constantly worked to bridge the racial divide in southeast Michigan. In March, the organization not only celebrated their 42nd anniversary, but also the launch of their new website. Below I have highlighted some features and functionality of Focus: Hope’s website that are key for any nonprofit.

Updated and well organized content

First, it’s important to deliver relevant content to the several and varied, audiences of non-profits. You want to give people a reason to come back. If your website has stale information and doesn’t engage the users – guess what – they won’t be returning. Creating a vibrate, easily updatable and engaging website was in the plan from the start – everything from the structure to design to functionality. Media Genesis built Focus: Hope’s site to have a custom content management system (CMS), so anyone within the organization can update the information. Now, content, videos, news and pictures can all be easily updated as often as needed– giving users something new to come back to. Having an organization of content is also very vital. Focus: Hope may have a lot of content, yet it is labeled and structured in a way that people don’t have to hunt for the information they are looking for.

Donations

A strong donation system is essential to keep any nonprofit up and running. Keeping this in mind, donors should not be left out when it comes to picking out your top audiences for your website. Remember, as a rule, don’t make people search. If you are actively seeking donations, make it easy for people. On Focus: Hope’s website a “Make a Donation” button is prominent on every page. We also customized their third party donation system so donors no longer have to leave the site to make a donation. This is key as it allows visitors to the site to make a donation, yet still browse and engage with the site content afterwards without ever leaving.

Social Media

Using social networks such as Facebook, YouTube and Twitter are great ways to share videos, start a discussion about an interesting fact, or spread the word about an event. It also portrays more transparency and lets people observe a more human aspect of the organization. Focus: Hope has links to their different social networks on every page, making it easy for users to peruse.

Correctly identifying your audiences, assessing the needs of your organization and finding ways to engage users should all be best practices when it comes to planning and developing any nonprofit website.

Contact Antoine Dubeauclard at Media Genesis

Trade Association Settles FTC Charges of Misleading Advertising

Associations are as responsible for the advertising claims they make about services and products as for profit industry.  While many association "products" are training, peer professional networking, legislative advocacy, etc., some nonprofits also have services or products they sell to the general public.  Once they cross that line, they need to make sure they can support any statements about those products or risk the Federal Trade Commission stepping in.  See below.  Bunnie

Trade Association Settles FTC Charges of Misleading Advertising


by Jonathan L. Pompan, Esq., Venable LLP, Washington, D.C.

On January 26, 2010, the Federal Trade Commission (“FTC”) announced it had entered into a voluntary settlement, subject to final approval, with the Indoor Tanning Association (the “ITA”) over allegations that the ITA made misleading representations in its advertising and marketing for indoor tanning. Under the consent order, the ITA is restricted in the claims it may make in its future advertising, must send a notice to its members and recipients of its advertising materials, and must adopt a record keeping program.

The proposed order is significant in several respects. First, it makes clear an association’s obligation to adhere to advertising and marketing law. Second, the order illustrates how an association’s own advertising claims can result in obligations to disclose material risks. The FTC accused the ITA of failing to disclose facts related to health and safety risks that would be material to consumers in their purchase or use of the advertised product in light of the representations made. Third, the order focuses on point-of-sale and other consumer-facing advertising by the association that falls squarely in the commercial realm. The order does not cover representations made in non-commercial settings or contexts, such as communications to legislative or executive bodies.

Many associations advertise and market to develop and defend markets important to their membership. To help minimize legal risk, trade association staff should be well-educated in advertising and marketing law to ensure that their advertising claims are truthful and not misleading. In addition, claims must be substantiated, particularly when they concern health, safety or performance.

Association staff and legal counsel should consider the following pointers:

• Sellers are responsible for claims they make about their products and services. Third parties – such as advertising agencies or website designers – also may be liable for making or disseminating deceptive representations if they participate in the preparation or distribution of the advertising, or know about the deceptive claims.

• Stick to claims that can be supported. The type of evidence needed will depend on the product, the claims, and what experts believe necessary.

• Avoid disclaimers and disclosures that are difficult to notice, read or hear. However, a disclaimer cannot remedy a false or deceptive claim.

• Product and service demonstrations should show how the product will perform under normal use.

• FTC guidance suggests that association endorsements “must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization.”

• Certain regulated products and services trigger specific laws (e.g., Textile and Wool Acts, various consumer financial products and services) and regulations. Moreover, certain forms of advertising are subject to specific guidance (e.g., FTC Guide on Environmental Advertising, FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising).

• Competitors may challenge advertising claims under self-regulatory programs, such as the Council of Better Business Bureau’s National Advertising Division, as well as under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a).

• Obtain appropriate insurance for advertising and marketing activity.

* * * * * *
Jonathan L. Pompan, an attorney in the Washington, DC office of Venable LLP, represents nonprofit organizations and others in regulated industries in a wide variety of areas, including advertising and marketing law compliance, as well as in connection with Federal Trade Commission and state investigations and law enforcement actions. Prior to joining Venable, Mr. Pompan was an in-house counsel at a trade association where he reviewed advertising and marketing in advance of publication. For more information, please contact Mr. Pompan at 202.344.4383 or jlpompan@venable.com.

For more information about this and related industry topics, see www.venable.com/associations/publications.




This article is not intended to provide legal advice or opinion and should not be relied on as such. Legal advice can only be provided in response to a specific fact situation.

Micromanagement: Board Style

One of the biggest complaints I hear from executive directors and board members alike is about board “micromanagement.” Executive directors are driven crazy by it and fellow board members feel their time is being wasted, in board meetings or retreats, when boards engage in the minute details of organizational operations.

Recently an executive director of a million dollar a year nonprofit revealed that he had a $500 limit on his signing authority. $500 doesn’t get you a lot and if you have to go to the executive committee or full board for every expense over $500 you’ll be spending a lot of your time asking for permission. A basic brochure print job can easily run over that limit. A copier contract will certainly top that limit. Heck, coast to coast airfare could force you to seek board permission.

Some boards want to approve every press release the executive issues, resulting in several edits, rewrites, etc. Other boards involve themselves in what kind of paper the organization uses, issuing edicts on “green” content percentages or which manufacturer the organization will purchase paper from.

The craziest thing I ever saw was a frustrated executive who had been asked by the board to account for every minute of his time and his plan for every minute of his time for the coming year. What should have been a broad work plan with achievable goals resulted in a day by day projection (for 365 days) of what projects he and his staff was going to work on. When I flipped through it all I could think of was how toxic the executive/board relationship had become.

One executive I knew could never take a real vacation; he was expected to be on committee and board conference calls even though he was supposed to be on vacation with his family. In another instance, a treasurer wanted to re-open an audited financial statement because he found a $10 discrepancy. Thank goodness the accountants convinced the treasurer that in order to remedy the $10 discrepancy it would cost the organization about $1,500 in accounting fees.

Then there are the boards who insist upon approving every hiring decision down to the receptionist at the front desk. Or the boards that want a presence at every meeting the executive has with other organizations. And the boards that want the executive to “clock in” and “clock out.”

Micromanagement is never good, whether it’s a board micromanaging an executive or the executive micromanaging staff. Micromanagement is literally saying “we don’t trust you to do the job right.”

I firmly believe that when an organization hires an executive they should hire the best talent they can find and once done, trust that person to be professional, competent and capable. And if that person proves to be none of those things, then it is the board’s prerogative to fire them. But to hire an executive and then treat them like an errant child who needs constant oversight is demoralizing to the executive and to the organization.

What is the job of the board? Two things: setting policy and fundraising. Unfortunately in the nonprofit sector most boards do both of those things badly.

Setting policy means determining goals for the organization and then leaving it up the executive how he or she will reach those goals. For example, a board may say that they want a 15% growth in membership over a twenty-four month period. Now it is up to the executive to figure out how to achieve that membership goal. Or a board may say it wants the organization to offer new services such as specific types of membership training, then it is up to the executive to determine how that training will be delivered.

On the second topic of board fundraising, this is probably the area I hear the most complaints about from executives, because most boards don’t do any fundraising. They talk about fundraising, they promise to raise money, they come up with grandiose schemes for bringing money through the door, but rarely to never do they actually execute the plan or deliver on their promises. Recently an executive told me of a special fundraising event in which only one of his board members actually bothered to show up, even though the event was the board’s idea.

If you are a board member I want you to take a long hard look at how the board manages the executive. Has the board hired the best and the brightest and is the board allowing that person to do his or her job? Or is the board way too involved in the day to day operations of the organization? Ask yourself at the next board meeting which things the board is micromanaging. If the board makes a decision, is that a policy decision or is it telling the executive how to do his or her job?

There is no doubt that when boards stop micromanaging, executives can shine and relationships can improve all the way around.

Firing High Maintenance Volunteers

I love coming across material that has resounding implications for nonprofit management.  Thomas McKee writes an article about a subject that preplexes us all...how do you "fire" a volunteer?  In terms of management discomfort, firing a volunteer has to rank at the top.  But the truth is, from time to time, you have to do it.  As I was discussing this article with a friend he told me of an instance in which a volunteer made outrageous promises on behalf of the organization, and he had to spend an extraordinary amount of time cleaning up the mess as well as the embarassment.  I hope you enjoy and take to heart Thomas' article.  Bunnie

How to Fire Volunteers and Move On
by Thomas W. McKee

In every workshop on volunteer management I am asked the question, "How do you fire a volunteer?" Volunteers don't get paid. Why would I want to fire them? Couldn't we just let them continue doing what they want to do when they want to?

Unfortunately, it isn't that simple. Volunteer roles are very important to the mission of the organization, and if the job isn't getting done or if the volunteer is lowering the morale of the other volunteers, we have a responsibility to correct the situation. It could be that the reason we want to get rid of a high maintenance volunteer is because they are not fulfilling their responsibilities, or it could be that they are just impossible to work with. However, before we make that decision, we need to make sure that we have taken every performance-coaching step to correct the situation. Performance coaching, the one-on-one meetings that happen between the manager and the volunteer, may provide an opportunity to resolve our concerns. Some organizations, like the California State Railroad Museum, have formal performance reviews for all volunteers and regular performance management meetings.

If the volunteer manager has developed very specific job descriptions and expectations, the manager can talk to the volunteer when those expectations are not being met. All of these alternatives are both easier to implement and managerially smarter than making a decision to terminate a volunteer. They recognize that there are many reasons why a person may be behaving inappropriately, and that some of these reasons have answers other than separating that person from the program. We strongly urge that you to consider each of these alternatives before deciding to fire any volunteer. The goals of performance-coaching are to get the project back on target. If the volunteer does not do the job, it is time to find a replacement.

Before you have the firing meeting, be sure to check out the legal ramifications of such a decision.

Legal Issues

It is not outside the realm of possibility that a terminated volunteer could sue you and your organization. Even if no one sues, carefully following a clearly defined process will assure everyone in the organization that people were treated fairly. Emotional and unexpected dismissals could cause upheaval in your organization. Legal issues are never simple, and every nonprofit agency is unique. Always check with your organization's lawyer before making any legal decisions. Many liability concerns can be avoided by carefully screening volunteers before they get involved.

In addition to job descriptions you would be well advised to develop a volunteer manual that clearly outlines the duties and responsibilities of your volunteers. This is especially important if you do face the need to terminate someone. The more documentation you have, with conditions and policies for termination, the safer you will be. To be doubly safe, be sure to distribute the policies to new volunteers. Some organizations even have the volunteers sign a letter of agreement outlining the expectations on the part of the organization and the volunteer. Board members are handled a different way since their service (and termination of such) is covered by the bylaws of the organization. Terminating a board member is a matter for the board as a whole to act according to the bylaws.

Legal Justification

There are two legal justifications for firing a volunteer. The first is simply that the goal of an organization is to deliver quality service to the members and/or clients. The organization must have policies and practices, which call for the volunteer to be accountable for the highest levels of performance. If the volunteer is a barrier to that delivery, then the agency has a legal obligation to take some sort of action. But these expectations of quality service and the service required by both paid and volunteer staff need to be spelled out in a policy manual.

A second legal justification has to do with giving significance (value) to volunteer service. By allowing just any quality of service for the volunteer, the organization conveys the impression that the volunteer work done is irrelevant and insignificant. An organization that does not care enough to enforce quality of volunteer work communicates to other volunteers that their volunteer work is insignificant.

Developing a System for Making Firing Decisions

If you do, however, encounter a situation in which none of the performance coaching alternatives work, it is helpful to have in place a system for dealing with problems. Some agencies have been sued by terminated volunteers, and many agencies have encountered political and community relations problems. The system that follows is designed to help the volunteer manager both in making and in justifying the decision to terminate a volunteer. Essentially, it has three parts:

Part I: Communication of Clear Expectations

The first stage of the system is development and clear communication of position expectations. The organization needs a set of official policies regarding volunteer personnel issues. It is especially important to have policies on probation, suspension, and termination. The organization sets in place a planned orientation program with very specific examples of the requirements and unacceptable behavior. The specific position charter must outline the objective of the position (i.e. - attend 8 of the 10 board meetings).

Part II: Investigation

The assumption behind part II is that the volunteer manager has tried all of the suggestions in performance coaching (listening, coaching, training, etc.) and nothing seems to be working. Those volunteers whose performance is unsatisfactory are told of their deficiency, counseled on improving their work, and then re-evaluated. Failure to conform to the quality standard over time becomes grounds for termination. The investigation is the collection of the data to make sure that the volunteer is truly not fulfilling the job requirements. Part of the investigation is to make sure that the volunteer manager has done a fair job of enforcing the system to all volunteers. This is not only to be fair to the person being fired, but also to make sure that you are not putting yourself in the position for litigation. In cases where the wrongful performance is not incremental but is substantial in nature such as inappropriate relations with a client or breach of confidentiality then what is needed is some "proof" that the volunteer did in fact commit the wrong-doing. This might be testimony of other volunteers, staff, or the client.

During the coaching and investigation period, it is very important to document, document, document. The manager should keep a personnel file on the volunteer and keep write up a brief summary page on each meeting. A summary page would be:

Performance Coaching Meeting:

Manager: Jon Jackson


Volunteer: Lucky Smith


Discussion: I talked with Lucky about not showing up for his volunteer shift at the information desk on June 5, July 6, and August 14th. He said he had a family emergency in June, was on vacation in July, and just forgot in August. He was sorry and would try to do better. We talked about him getting a replacement when he could not make it. He said he would.

Sounds great, except in September Lucky didn't show up again. You called him the next day to set up a meeting with Lucky to terminate his position.

The documentation also demonstrates that the volunteer manager do a fair job of enforcing the system. It requires equal and fair application of the rules (no playing favorites), appropriate penalties (graduated to the severity of the offense) and, if possible, a review process, so that the decision does not look like a personal one.

You will note that the above processes mirror the common personnel practices for paid staff. They are, in fact the same, and they should be, since evaluating either paid or unpaid staff should follow the same rules.

The advantages of this system are two-fold. First, they assist the volunteer manager in making the right decision, and in feeling comfortable about making that decision. The system is fair to both the volunteer and the agency if properly followed and tends to produce 'correct' answers. It also allows the volunteer manager to divert to a less drastic solution as appropriate.

Second, the system helps develop a case for firing that can be utilized to explain the decision to others, whether internally or externally. In practice, in fact, an odd side effect of this systematic approach is that many problem volunteers decide to voluntarily resign rather than face the inevitable and seemingly inexorable conclusion of the process.

Part III: The Firing Meeting

Regardless of the system utilized to reach the decision to terminate, someone has to actually convey that decision to the volunteer. This will never be a pleasant experience, but here are some tips that may help:

Conduct the meeting in a private setting. This will preserve the dignity of the volunteer and perhaps of yourself.

Be specific. Some managers are so vague that the volunteer walks out of the meeting wondering if he or she was fired or offered a job. The volunteer manager may tell Steve that his work with kids was fantastic. The inner city young people loved him and they would love to put him on full-time staff. Then the manager says that the staff were concerned because Steve tended to be late, and he often didn't show up.

Words like "tended" and "often" are vague, especially when couched between phrases such as "fantastic" and "love to have him on full-time staff." What the manager needed to say was, "Steve, in spite of your rapport with our inner-city young people, we just cannot depend on you. On September 10th, 17th and 24th, you did not show up and we were counting on you. I talked to you about this and you said you agreed that if you could not make the commitment to be there each week, we would need to replace you. We have found someone to replace you and are taking you off of our volunteer team."

Don't negotiate—just state your decision. The purpose of the meeting is simply, and only, to communicate to the volunteer that they have not met the specifics of the performance expectations and they are no longer going to be needed. You are going to find a replacement. If they have a uniform or keys, you need to collect them immediately. If the volunteer wants to vent, let them vent, but just listen—don't become defensive and try to defend. Since many non-profit organizations have a social mission, and we truly care about people, we are tempted to counsel this person. That is not the purpose of this meeting. Any attempt to counsel can send a mixed message.

Follow-up. Send a follow-up letter (sample below) to the volunteer stating your appreciation and anything positive that you can say; however, state the decision to terminate the volunteer letter of agreement. Inform the staff and other volunteers on the team of the decision. Be sure to keep the details confidential. The volunteer will usually tell the details.

Sample Letter:


Dear Lucky Smith,


Thank you for your interest and involvement in CCC and the time you spent volunteering as a receptionist at our information booth. This is such an important position as we make many public contacts. Your outgoing personality and winsome way with people was a real asset to us.


We are so disappointed that your schedule did not allow you to keep the requirements of the position charter, as outlined in our volunteer personnel manual. As mentioned in our meeting on September 26, 2002, we need to seek a replacement for your position and terminate our letter of agreement.


I trust that when your schedule changes, and you feel that you can meet the requirements of this position, we can once again have you be a part of our volunteer team.


Sincerely,


Jon Jackson
Volunteer Manager

Firing a volunteer is difficult. Let me emphasize again that firing is only the last result, and I only consider it when the continued involvement of the volunteer is having a negative impact with the members of the organization, our clients, or our public.

Have I ever had to fire a volunteer? Yes, but not a highly involved volunteer. I did all I could to salvage the dignity and resources of the highly involved volunteer, who was a high maintenance volunteer. Sometimes I went home and complained a lot to my wife about this person, but we made it work. However, I have fired high maintenance volunteers who did nothing and did not fulfill their commitments, and I really didn't lose any sleep over it. Don't waste your time with Lucky Smiths who don't show up. Move on.

Tom McKee is a leading volunteer management speaker, trainer and consultant. You can reach Tom at (916) 987-0359 or e-mail Tom@VolunteerPower.com. Other articles and free resources are available at http://www.volunteerpower.com/

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