Organizing the Network
Leadership and Governance
As you build the foundation it is important to understand some of the actual work you will need to do as you start operating as a Network. It is also important to consider the governance structure. Typically, networks have a governing body and a volunteer or paid staff person.
Boards establish policies.
Board members and staff execute the policy. This model is referred to as a working board. As you think about roles, be aware of the kinds of tasks that need to be done to manage a network and which roles can be done by members of the Board. Assess where you have in-house expertise and which functions you will need to staff, whether through your staff person or through a contractor.
Sample tasks of a Network
- Thank you notes for donations of time and money
- Finance – managing the accounts, preparing the financial reports, and filing tax returns
- Legal compliance - Filing tax returns and other state reports which may be required under your state’s incorporation laws
- Ongoing fund development - contacts with churches, membership drives, grants
- Web updates -
- Communications – newsletters, email
- Volunteer engagement/follow-up
- Managing the issues, working with partners, designing campaigns, organizing volunteers to take action: i.e., recruiting volunteers, speaking engagements, attending events, correspondence, organizing meetings.
Role of the Board
The Board, in most cases is a legal entity with overall responsibility for the organization. New members need to understand this role and be given the tools to do this work. Listed below are key functions of the board and some on-line resources to provide further information.
- Determine the organization’s role and mission
- Select the Executive Director (or equivalent) and assess the Executive Director’s performance.
- Ensure effective planning.
- Provide adequate resources.
- Manage resources effectively. It is critical that Board members get timely reports from the Board chair or staff and know what is happening in the organization.
- Evaluate the organization’s programs and services.
- Ensure that the organization is adhering to its legal responsibilities.
- Recruit new Board members.
From Minnesota - Role of the Board
From California - Board Description
On line resources for Boards
Non Profit Expert.com http://www.nonprofitexpert.com/aboutme.htm
Board Development http://www.boarddevelopment.com/role.cfm
Board Source http://www.boardsource.org/Knowledge.asp
Growing Leadership
Be aware of opportunities to grow new leaders. Events such as Lobby/Advocacy Days and regional conferences are great places to identify new leaders. Take the time to meet these new people and understand their interest.
Structure
Considerations for determining structure:
- What is our mission and vision? Do we need to be incorporated?
- Is there an organization that can serve as our fiscal agent enabling the Network to get grants and donations?
- Do we have resources to do reporting required under Incorporation?
Make sure you understand the rules for being an advocate. It is critical that you understand what 501(c)(3) and 501(c)(4) organizations can and cannot do. Even if you decide not to incorporate, you will be obligated to follow the same rules as your fiscal agent, or any church that supports you. (link to resources for rules)
- Independent Corporation (this will be a link to a discussion of independent corporations)
- Part of an existing UU group- district, congregation, or other UU entity
- Informal – Ad Hoc –email list, yahoo group
Independent corporations
Independent corporations are created by states. The federal government determines the tax status. Your first step is to establish a corporation in your state. Generally the information as to how to do this is available from your Secretary of State. You should be able to get information online by going to your state website. Many states allow you to file for corporation status online for a small fee. You will be required to submit at a minimum:
- Name of corporation
- Names and addresses of a Board of Directors including President, Secretary and Treasurer
- Articles of Incorporation - which are similar to by-laws (Link to sample AOI – private section)
- By-laws (Link to sample by laws –private section)
Earlier we noted that you should identify secular organizations in your state to support your work. Some secular organizations will share information as to how to file for incorporation in your state. In some cases, it may be necessary to hire an attorney. In any case, your best resources for this information are resources in your own state.
Additional information can be found at these sites:
How to start a non-profit from About. Com: http://nonprofit.about.com/od/nonprofitbasics/u/startingup.htm
Resources from the Foundation Center: http://foundationcenter.org/getstarted/guides/nonprofit.html
Next step – The IRS - Tax-exempt options
The IRS requests that you file an application under section 501(c) of the Internal Revenue Code. Most organizations use Form 1023, Application for Recognition of Exemption. (See sample) (link http://www.afj.org/for-nonprofits-foundations/resources-and-publications...) Attached are links to the IRS site. Due to changing rules it is impossible for us to detail the process here. Generally it is recommended that you obtain legal assistance to, at a minimum, review your application and ensure that your By-laws and Articles of Incorporation are consistent with all the requirements. There are two types of IRS designations:
501(c)(3) Non-profit, tax exempt
- Charitable, Educational Organization
- Donations ARE tax deductible
- Lobbying expense is limited to 20% of total expenditures and a 501(h) form needs to be filed
501(c)(4) Non-profit,
- Social Welfare Organization
- Donations ARE NOT tax deductible
- Lobbying is unlimited
General IRS resources:
http://www.irs.gov/publications/p557/index.html
http://www.irs.gov/charities/charitable/index.html
Process for obtaining 501(c)(3):
http://www.irs.gov/charities/article/0,,id=96122,00.html
If you are seeking status as a 501(c)(4), you still must file with the IRS to ensure your revenues remain tax exempt. This IRS publication provides more details:
http://www.irs.gov/charities/nonprofits/article/0,,id=96178,00.html
Lobbying Rules
Here are a few resources
IRS
http://www.irs.gov/charities/charitable/article/0,,id=120703,00.html
http://www.irs.gov/charities/charitable/article/0,,id=163395,00.html
Alliance for Justice - The Nonprofit Advocacy Project (NAP) and Foundation Advocacy Initiative (FAI) work to strengthen the voice of the nonprofit and philanthropic sectors in important public policy debates by giving tax-exempt organizations a better understanding of the laws that govern their participation in the policy process.
http://www.afj.org/for-nonprofits-foundations/advocacy-assistance/
Center for Lobbying in the Public Interest: www.clpi.org
UUA – The Real Rules: http://www.uua.org/leaders/leaderslibrary/realrules/index.shtml
Rules for Church Lobbying can be found at these IRS sites:
Comprehensive guide from the IRS on Church activity: http://www.irs.gov/pub/irs-pdf/p1828.pdf
Lobbying by Nonprofits
Political Activity by Churches: http://www.irs.gov/charities/charitable/article/0,,id=163395,00.html
Legal Documents
By-laws
By-laws are a legal document that establishes the rules for how your Network will operate. They serve as the contract between the corporation (the Network) and the owners. By-laws can be very simple, but should include:
1. Purpose of the organization
2. Membership – who the members are, how membership is granted and by whom
3. Meetings – when they are held, when and how notice is made
4. Board of Directors – Role, Size, Composition, elections, quorum, terms, notice of meetings, officers and duties, resignations, special meetings
5. Executive Director or equivalent – Role and responsibilities
6. Amendments to the By-laws and how they are made.
Samples:
Articles of Incorporation
Articles of Incorporation are required by each state if you wish to incorporate. Note that you must be incorporated by the state before you can obtain tax-exempt status from the IRS. The Articles of Incorporation are a legal document that establishes you as a specific type of corporation within your state, provides a legal description of your organization, and assigns specific powers to the Board.
Each state has its own rules which can generally be found at the Secretary of State website. This link on the IRS website has a link to each State: http://nonprofit.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=nonprofit&...