WEBCAST–MARCH20,2015

NYSSHRM2016StateLeadershipConferenceApril9,2016

FUNDAMENTALSOFNON-PROFITSSusanPost,SHRM-SCP,CAE

JohnJ.Porta,Esq.

1

Whatyoudon’tknowcouldhurtyou •  AreasofpotenUalliabilityforvolunteersofchaptersandstatecouncils

–  Howtokeepthebadatbay–ProtecUngyourselffromfutureliability

•  Copyrightandtrademark-–  Usingmusic,thebrandandAffiliateOflogoproperly

•  KeepingupwithSHAPE–  WhatisrequiredtobeanaffiliateingoodstandingwithSHRM–  EffecUveaffiliateoperaUons–  ExcelAwardeligibility

2

Your Volunteer Role Helps to Build Competency in Our HR Profession

3

3

OnthewaytotheboardmeeUng……..•  TheChairoftheWoeismeSHRMChaptercalledanemergencyBoardofDirectorsmeeUngto

discussarecentlydiscoveredfundingshortage.

•  ThemeeUngcommencedwiththeusualthreeroundsofdrinks.Eventually,theChairstartedthebusinessporUonofthemeeUngbyannouncingthathehadjustdiscoveredthattheChaptercheckingaccountwasover-drawn,andwasinexplicably$40,000lessthanitshouldhavebeen.Hefurtherstatedthattherewascurrentlyinsufficientfundstopayabout$15,000worthofoutstandingchecks,anoutstanding$10,000loan,andabout$5,000offederalemploymenttaxeswhichhadbeenwithheldfromemployees.

•  TheChairexplainedthatunderBoardpolicy,thecheckbookhadbeenunderthefullcontroloftheTreasurer,whohadwricenallchecksandwasthesolepersonwhoreviewedallbankstatements.SomeofthequesUonablecheckswereover$5,000,buttherewasnodualsignaturerequirementforchecksoveraspecifieddollaramount.WhentheChairdiscussedthemacerwiththeTreasurer,theTreasurerhadassuredtheChairthattheTreasurerwouldlookintothemacer,butthatheandhisgirlfriendwereheadedtoTahiUforabriefvacaUonandthathewouldbeunabletomakethemeeUng.

4

Whataresomeoftheissues?

5

5

TipsfortheChapterandStateCouncilLeader•  Exerciseduecare;PREPAREforBoardmee=ngs;documentinminutesthatBoardhasclosely

reviewedfinancialsandothermaCersapprovedbytheBoard.

•  Makesurethatwhenyourelyonreportsofofficers,commiCees,CPAs,orconsultants,youhaveareasonablebasistoconcludethattheyarequalifiedtoprovidesuchreports.

•  Avoiddirectorconflictsofinterest;iftheydoexisttheconflicteddirectorshoulddiscloseandnotvoteorpar=cipateindiscussionoftheissueotherthantoanswerques=onsconcerningtheconflictofinterest

6

7

StateLaws-ManyjurisdicUonsincludeintheirNon-StockCorporaUonAct,orelsewhereinthestatecode,limitaUonsonliabilityofvolunteersofcertainnon-profitorganizaUons.

Takethesesteps•  IdenUfyApplicableStateLaw•  ReviewtheFederalVolunteersProtecUonAct•  Applyandensureyoumeetthe“PrudentManStandard”

–  goodfaith;–  withthecareanordinarilyprudentpersoninalikeposiUonwould

exerciseundersimilarcircumstances;and–  inamannerthedirectorreasonablybelievestobeinthebestinterestsof

thecorporaUon.

Howtolimityourliability

MeanwhileattheboardmeeUng……..•  UponhearingthisinformaUon,oneoftheDirectorssuggestedthattheyhaveanother

roundofdrinks.AnotherDirectornotedthattheDirectormakingthismoUonwasobviouslyintoxicatedandshouldprobablynotbegivenanotherdrink.However,theconsensuswasthattheywereall“bigboysandgirls”andcoulddecidewhentheycouldorcouldnothaveanotherdrink.

•  AnotherDirector,JessieDefamatory,saidthatshehadnodoubtthattheTreasurerhadstolenthemoney,becausehewasaknownphilanderandacrook.

•  HavingheardthisinformaUon,theChairmovedthattheythrowtheTreasureroutofthechapter,andthismoUonwaspassedunanimouslywithoutdebate.

•  AnotherDirectorthenstatedthathissecondcousinonceremovedwasalawyerandhadtoldhimoncethatyoucouldgetinsuranceforthesetypesofincidents.TheChairconfirmedthatthechapterhadpropertyinsuranceonitsbuilding,butnootherinsurance.

8

Whataresomeoftheissues?

9

9

DefamaUon–whengossipturnstoliability

•  WhatisdefamaUon–  Wricen(libel)orverbal(slander)statement–  Whichispublishedtoathirdparty(thinksomethingassimpleasatext)–  Whichinjuresanother’sreputaUon,and–  Whichisuntrue

•  Defenses–  StatementisinfactTRUE,or–  QualifiedPrivilege–Ifitappliesdefendantprevailsifnomalice

10

TipsfortheChapterandStateCouncilLeaderBecarefulandfair.WhenmakingwriCenororalcommentswhichcouldharmthereputa=onofanotherperson.

1)  Makesurethereisachapterbusinessneedforsuchstatementtobemade;and

2)Onlymakethestatementtothosewhohaveachapterbusinessneedtohearit.•  Par=cularareastobecareful:

–  Allega=onofethicalviola=ons.–  Membershipdisciplineorexpulsion–  Discussionatchaptermee=ngsoronbulle=nboardsaboutvendorstotheHR

profession.

11

Alcoholatstatecouncil&chapterevents

12

Now…..whataboutthebooze?

13

•  Doyouneedit?Isitappropriate?(i.e.studentprograms?)

•  Useatrainedserver

•  ArrangeforavailablealternatetransportaUon

•  UsedrinkUcketstodissuadeabuse

•  Checkchapterinsurancepolicies

TipsfortheChapterandStateCouncilLeader13

Asaboard–payacenUontotheselegalissues•  NewYorkNonprofitRevitaliza9onActof2013

•  CAN-SPAM

•  An9trust

•  FailuretopayEmploymentTaxes

•  NOInurementofbenefittomembers

14

LEGALISSUES

NewYorkNonprofitRevitalizaUonActof2013:QuickGlance•  Signed into lawbyGovernorAndrewCuomoonDecember18,2013. Most

provisionsoftheActtookeffectonJuly1,2014.•  First major overhaul of the laws governing New York State nonprofit

corporaUonsinmorethanfourdecades.•  AffectsallnonprofitcorporaUonsincorporatedinNewYork.•  Amendslawsgoverningnonprofitsintwoprincipalareas:

–  EnhancesoversightandcorporategovernancerequirementswiththeaimofprevenUngfraud;–  Updates outdated laws to allow nonprofits to funcUon more efficiently in the modern

technologyage.

15

MandatoryConflictsofInterestPolicy•  SecUon75ofTheNonprofitRevitalizaUonActmandatesthat:

“Everycorpora=onshalladoptaconflictofinterestpolicyto ensure that its directors, officers, and key employeesact inthecorpora=on’sbest interestandcomplywithallapplicablelegalrequirements.”

•  Appliesto:allnonprofitcorporaUonsinNewYork.•  AppliestoDirectors,Officersand“KeyEmployees”

16

ConflictsofInterestPolicyContentsAtaminimum,theConflictofInterestPolicymustinclude:1) AdefiniUonofwhatconsUtutesaconflictofinterest;

–  EffecUveJanuary1,2016,noemployeeofthenonprofitmayserveaschairof theboardorholdanyotherUtlewithsimilarresponsibiliUes

2) Proceduresfordisclosingaconflictofinteresttotheauditcommicee,ortotheboard;3) A requirement that the conflicted individual not be present at or parUcipate in board orcommiceedeliberaUonsorvoUngonthemacergivingrisetotheconflict;4) AprohibiUonagainstanyacemptbytheconflictedindividualtoinfluencethedeliberaUonsorvoUng;5) A requirement that the existence and resoluUon of the conflict be documented in thecorporaUon’s records including the minutes of any meeUng at which the conflict wasdiscussedorvotedupon;and6) Proceduresfordisclosing,addressing,anddocumenUngrelatedpartytransacUons.

17

DirectorDisclosureStatements•  The Conflict of Interest Policymust also include a requirement that

prior to the iniUal elecUon of any director, and annually thereaser,each director must sign and submit to the secretary of thecorporaUonawriRenstatementidenUfying:–  AnyenUtyofwhichthedirectorisanofficer,director,trustee,member,

owner,oremployee,withwhichthenonprofithasarelaUonship;and–  AnytransacUon inwhichthenonprofit isaparUcipantand inwhichthe

directormighthaveaconflicUnginterest.

•  ThesecretaryofthecorporaUonmustprovideacopyofallcompletedstatementstothechairoftheauditcommiceeorchairoftheboard.

18

CAN-SPAMActof2003

19

WhatisCAN-SPAM?• E-mailsofapromoUonalnaturethatadverUseaproductorservice.Forexamplefee-basedmeeUngsandevents

• Doesn’thavetobe“bulk”–anynumberofmessages–eventojust1person

• AppliesEVENIFyouhaveabusinessrelaUonshipwithrecipients(members),thelawsUllapplies• Ane-mailtochaptermembersadverUsingorpromoUngsaleofachapterproductorservicewillbetreatedasacoveredcommerciale-mailmessage.

“TransacUonalMessages”areexcludedsuchasaconfirmaUonofacommercialtransacUonthattherecipienthaspreviouslyagreedtoenterintowiththesender,suchaspaymentof

dues

20

AnUtrustPrinciplesforSpecificAcUviUesofSHRMChaptersandCouncils

•  Consultants•  Prices•  MembershipDiscipline•  ServicestoNon-Members•  Surveysofprices,wages,orsignificantcosts

21

22

An=trust• Becarefultorecognizepoten=alan=trustissues

• Whenconsultantsarediscussingtheirbusiness–nofeediscussions

• Ensureyouhaveamembershipdisciplineprocess

• Whenexpellingordenyingmembershiptoacompe=torofmembersofthechapter–befairandconsistent;donotplayfavorites

• Wagesurveys–putthemintheFTC/DOJsafeharbor

TipsfortheChapterandStateCouncilLeader

23

ServicestoNon-Members

•  DenialofassociaUonservicestonon-membercompeUngHRprofessionalmaybechallengedasagroupboycoc

•  AssociaUoncanchargehigherfeestonon-membersaslongassuchfeesarejusUfied.

•  Non-memberdeniedserviceswillhaveburdenofshowingdenialofsignificanteconomicadvantage;buttodenynon-memberaccessistorunriskofanUtrustchallenge

•  BecertohaveUeredpricingvsclosedevents

TipsfortheChapterandStateCouncilLeader

Ifyouconductsurveysforyourmembers…

24

•  Placesurveyofwages,orothersignificantcostsofcompany,inFTC/DOJ“safeharborrules”bydoingthefollowingthings.

–  ReportonlyaggregatestaUsUcswitheachreportedstaUsUcbasedonatleast5responseswithnoresponserepresenUngmorethan25%onaweightedbasis.

–  InformaUonprovidedisatleast3monthsold.

TipsfortheChapterandStateCouncilLeader

Don’tforgettocollectyouremployeestaxes25

SecUons6671and6672oftheInternalRevenueCode

•  OfficersoremployeesofacorporaUon,who

areunderadutytocollectandturnovertaxessuchasemployeeincome/SocialSecurity/Medicaretaxes

•  Canbepersonallyliableforanyamountofsuchtaxwhichisnotpaid,iftheywillfullycausethecorporaUontofailtopaysuchtaxes

WhennegoUaUngcontracts•  RequirehotelsandconvenUoncenterstocomplywithapplicablesafetyand

healthlawsandwiththeAmericanswithDisabiliUesAct.

•  DonotagreetoacontractprovisionthatallowshotelorconvenUoncentertocancelorfailtoprovidepromisedfaciliUesorservicesforanyreasonotherthanuncuredbreachofassociaUon,ForceMajeureEventorActsofGod.

•  Includeincontract“actsofGod”clauseswhichpermitcancellaUonofaneventwithoutliability,suchasnaturaldisasters,terrorism,orothereventswhichmakeholdingtheeventeitherimpossibleorsoburdensomeastowarrantdischargefromcontractualobligaUons.

•  LimitrelocaUonofspacetospacethatiscomparableintermsofsizeconvenienceandameniUes

26

Thinkaboutgoingbeyondcompliance…SarbanesOxleyAct(“SOX”)-CorporateGovernanceConsidera9ons•  SOXdoesnotapplytotaxexemptorganiza9ons(exceptforonewhistle-blowersec9onof

theAct)•  BESTPRACTICE-taxexemptorganiza9onsareincreasinglychoosingtovoluntarilycomply

withmanyoftheSOXcorporategovernanceprovisions–  Independentandcompetentauditcommicee–  FinancialStatementsCerUfiedbyCEOandCFO–  ConflictofInterestPolicy/CodeofEthics–  RotaUonofOutsideAuditPartner

27

Copyrightortrademarkinfringement28

•  DonotshareSHRMLearningSystemsorhavealibrarywhereitisloanedout(violaUonofSHRM’sCodeofEthics)andinfringementofSHRM’scopyright.

•  Getspeakers'permissiontorecordandsellorgiveawaycopiesoftheirpresentaUons(includescopiesofslides).–  SlidesfromSHRMSpeakers’Bureauspeechesarecopyrightedandmayonlybe

distributedtoanaudienceataSHRMspeakerpresentaUon.•  Getphotographers’permissiontouseorreproducephotos.GetArUstspermissiontouse

music–  purchaseanduseroyalty-freemusicorpictures–  approachmusicproducers,emergingarUstsorphotographersandobtainpermission

tousetheirmusicormedia–  obtainalicensetolegallyusecopyrightedmusic(e.g.,ASCAPorBMI)

29

TipsfortheChapterLeaders

30

TheAFFILIATEOFlogo–ThelogotouseChaptersandstatecouncils(SHRMaffiliates)ingoodstandingarelicensedbytheirchartertouseonlythemarkssetoutintheseguidelines.TopreserveSHRM’srightsinitsmarks,thelawrequiresthatthemarksmustbeusedongoodsandinassociaUonwithservicesofanatureandqualitywhichSHRMhasapproved.SHRMallowsitsaffiliates,includingchaptersandstatecouncils,tousebylicensetheSHRMname,acronym,andAFFILIATEOFlogo,ifcertainguidelinesarefollowed.• PleaserefertoPage3oftheAffiliateGraphicStandardsforfulldetails.

31

Do’sandDon’tsoftheChapterlogo•  Douseeither“SHRM”or“SocietyforHumanResourceManagement”inyourlogo(i.e.theonethat

isinthelegalnameor‘alsoknownas’nameinyourbylaws)•  Don’tuseaconjoinedHandR(theirspinestouching)whenusingtheSHRMacronym•  DouseyourchapterlogoinconjuncUonwiththeSHRMAFFILIATEOFlogoandnotasasubsUtute

fortheSHRMAFFILIATEOFlogo•  Ensurethat“SHRM”and“SocietyforHumanResourceManagement”aretreatedthesameasthe

restofyourchapter/statecouncil’sname.Samefontsize,color,style.•  DoNOTregisterany“SHRM”or“SocietyForHumanResourceManagement”logoinanyfederal,

orstatetrademarkoffice

AddiUonaldetailsonthecreaUonandusageoftheChapterlogocanbefoundintheAffiliateGraphicStandardsavailableontheVolunteerLeaderResourceCenter(VLRC).

32

WhyusetheSHRMlogoatall•  Afastfoodanalogy

–  McDonalds•  WouldyoubeapartofagreatbrandlikeMcDonaldsbutnotusetheGoldenArchesfor

yourfranchise?•  TheSHRMlogoshouldbeviewedastheequivalent

–  SHRMinvestssubstanUalUmeandmoneyinbuildingthestrengthoftheSHRMbrand•  WewantyoutoleveragetheseeffortsandusetheAFFILIATEOFlogoproperly;thisonly

setschaptersupforsuccess

33

UsingtheSHRMlogo•  TheSHRMlogomayonlybeusedwithadvanced

wricenpermissionfromtheSHRMGeneralCounselorMarkeUngDepartment

•  MembersofSHRMarenotpermicedtousethelogoontheirownpersonalorcompanywebsitesorpersonal/professionalmaterials

•  Youmayusethe“SocietyforHumanResourceManagement”nameoracronym(i.e.,“SHRM”)torefertoyourmembershiporvolunteerleadershiproleinSHRMwithoutaddiUonalpermissions

SHAPESecUonI:ChapterinGoodStanding1)WewillmeetandmaintaintheminimumSHRMchaptermembershipaffiliaUonrequirementspertainingtoourchapter.2)Wewillsubmitacompleted2017ChapterLeaderInformaUonForm(CLIF)byDecember1,2016,orthe15thofthemonthimmediatelypriortothedateourchapterboardtransiUonoccurs,andwillensurethatourchapterpresidentisaSHRMmemberingoodstandingduringhisorherenUretermofoffice.

34

SHAPESecUonI:ChapterinGoodStanding3)Wewillprovideyear-endfinancialresultsfortheperiod

January1,2016,throughDecember31,2016.•  TotalChapterIncome&Expenses,NetProfit/LossandTotalChapter

AssetsasofDecember31,2016

4)WewillensurethatthecurrentSHRM“AFFILIATEOF”logoiscorrectly,consistentlyandprominentlydisplayedinaccordancewiththeGraphicsStandardsManualforAffiliates,includingbutnotlimitedtoourwebsite,communicaUons,meeUngagendas,conferenceprograms,signageandchapterPowerPointtemplates.

35

SHAPESecUonI:ChapterinGoodStanding5)Whenrequested,wewillsubmitourchapter’smembershiprosterforaudiUngbySHRMstaffandperiodicallyrequestamembershipreportfromourMemberEngagementAssociate(MEA)toconductaninternalaudit.6)WewillholdaminimumoffourchapterprogrammingeventsandfourchapterboardmeeUngseitherinpersonorvirtuallyduringthe2016calendaryear.AtleastoneoftheboardmeeUngswillincludeanopportunityfortheleadershiptotransiUonandtoconductstrategicplanning,successionplanningandachapterbylawreview(maybesimultaneous).

36

SHAPESecUonII:RecommendaUonsforEffecUveSHRMChapterAdministraUon 1)AchapterboardmemberwillparUcipateinatleast75%of

statecouncilmeeUngsandconferencecalls,includingrepresentaUonatthestate/regionalaffiliateleadershipconference/event(ifoneisheld).2)Ifourchapterhasaneventwithover200acendees,wewillofferprimeboothspaceandaminimumof15minutesofpodiumUmetoSHRMstaff.

37

SHAPESecUonII:EffecUveAdministraUon3)Thechapterwillberepresentedatthe2016SHRMVolunteerLeaders’Summitbyeitherthechapterpresident,thepresident-elect(preferred)oranotherboardmember,whowillrelaytheinformaUonbacktothechapter’sboard.4)WewillpromotetheSHRMAnnualConference&ExposiUontochaptermembersandwillensurethatourmajorchapterevents(includingco-sponsoredprograms)withgreaterthan200acendeeswillnottakeplacebetweenJune1andJune30.

38

SHAPESecUonII:EffecUveAdministraUon5)WewillsupporttheSHRMFoundaUonbymakingamonetarycontribuUondirectlyfromthechapter’sfunds,receivedbytheSHRMFoundaUonnolaterthanDecember31,2016.6)WewillacUvelypromoteSHRMCerUficaUonandRecerUficaUonfortheSHRMCerUfiedProfessional(SHRM-CP®)andSHRM-SeniorCerUfiedProfessional(SHRMSCP®)byobtainingand/ormaintainingtheSHRMRecerUficaUonProviderstatusandensuringthatallrelevantprogramsareenteredintotheonlineSHRMprogramdatabaseforProfessionalDevelopmentCredits(PDCs).

39

Ques9ons?

40

40

41

THANKS!

QuickOverview501(c)(6)vs501(c)(3)501(c)(6)•  Tradeassocia9ons,professional

socie-es,businessleagues•  Form1024•  CharitablecontribuUonsarenottax

deducUble•  NorestricUononamountoflobbying

acUviUes•  BusinessexpensededucUonfordues

exceptthatporUonusedtosupportlobbyingacUviUes

•  Amountofduesspentonlobbyingmustbedisclosedtomembers

501(c)(3)• EducaUonal,charitable,andreligiousorganizaUons• Form1023• CharitablecontribuUonsmaybetaxdeducUble• Permicedtolobby–donotdevotesubstanUalparttolobbyingacUviUes• Lessthan5%ofacUviUestolobbying• Safeharbor–501(h)elecUon

42