Editorial – Pagans and Non Profit Corporations

There is a growing trend in our Pagan community to incorporate as non profit corporations and seek federal 501c3 status. Some of the well founded reasons for this trend are to gain the implied legitimacy this status implies, to protect volunteer staff and members from some liability issues, accept tax deductible donations, and to establish spiritual, service, and community organizations that endure. What has not kept pace, in my opinion, is an awareness of the terms upon which our government grants this special corporate status, and the duties and obligations leading these organizations then requires.

Unlike the most well known non profits, most Pagan based corporations are run on a shoestring, and draw from the same pool of limited volunteers and volunteer time. Pagan corporate boards tend to handle governance, administration, management, and yes, even do most of the work! In most large non profit corporations (NPC) a board is composed of diverse, successful, and respected individuals from all walks of life, who bring their common desire to see a particular vision or mission thrive. They offer governance in policy and guarantee financial and reporting requirements are met, to maintain their non profit status. Key to their ability to do this is their diversity of members, and their separation from the management and administration of the organization. Often that function is done by an executive director, administration board, or paid staff supervised by the board. This type of structure is helpful in separating the governance, leadership, and path to the organization’s mission from the often personal and self serving issues that erupt in nearly every work situation, and among volunteers.

This is not to say the large (generally quarter million and up budgeted organizations) NPC organization model would work now for Pagans. There is simply not enough volunteers and community will to separate NPC leadership from the tasks at hand. There may come a time when we have a large enough and active enough community to provide this separation, but at this time it would just represent privilege when not enough hands are available for the actual work. What may seem like common sense is often lacking or simply not understood within newer NPCs. A board has basic duties to the organization and its mission that are primary in their accepting that role. The state and federal government holds board members to higher standards than leaders of a club. There is both a legal, financial, and ethical expectation to be met that transcends personal desires, squabbles, or the small benefits that board participation can offer.

I talked to Judy Sharken Simon; Manager, Board & Volunteer Services of MAP for Nonprofits about the duties and obligations of board members in non profits, and about the steep learning curve many new board members face. These standards apply to all NPC, large or small, and variance from them can cause large problems for even small organizations.

Judy said, “Reports to the Attorney General can result in an organization being “red flagged” so that the organization’s actions are watched more thoroughly for other improprieties.” Investigations rarely result in prosecution except in clear financial fraud cases. A board member’s “Duty of Loyalty” to their organization is both legally undefined and yet tangible and assessable. Board members acting with clear disregard to their obligation to the success of an organization they serve with is a violation. Once having served on a board the state still has expectations that no information or opportunities gained during their board term will be used to cause harm to the mother organization. Member and public complaints can result in personal sanctions upon board members, the organization as a whole, and the suspension of non profit status.

In regard to finances, Judy said, “Fiduciary duties are duties that you are legally obligated to as a board member. Not adhering to those fiduciary duties puts you personally, and the organization at risk. The statutes, as far as conflict of interest, apply to financial contracts and transactions, but there are perception issues that go beyond the legal definitions which come into play and can put the organization at risk. When you are serving as a board member it is important to know both your legal obligations and also follow best practice assumptions and considerations that you are bound to morally when you serve on a board. “

I asked if not following best practice and ethical expectations for a board can also be a cause for legal difficulties? Judy, “They are kind of one and the same. If a situation arises where the public perception or the perception of key donors, or others related to the organization see poor practices, it certainly puts the organization at risk. The organization might get bad word of mouth, not get donations or volunteers, or have trouble securing commitments because the public might perceive there are conflict of interest issues that are not being dealt with appropriately by the board of the organization. Perception becomes reality and so that is where the line between the legal definitions of the statutes and the ethical obligations blur. “

Since most Pagan community organization have “working” boards, I asked how to improve board practices in that hands on type board?

Judy, “This happens frequently, a lot of small organizations are all volunteer organizations, associations, etc. and operate in that ‘hands on’ way. MAP recommends new boards get board training within a couple months of joining a board. They learn what their fiduciary duties are, and what good board practice means. We offer a two hour board boot camp every month for $35 a person, and we can bring a customized group training session to a non profit organization. We recommend this for people who have never served on a board, who don’t understand what their obligations are, so they can understand the kinds of risks they can put themselves and an organization into. Available free is the Attorney General’s booklet on fiduciary duties.

About board training she said, “Orientation is really critical for a board so when a conflict of interest situation, or a best practice or principals issue comes up, it is really incumbent on the whole board to recognize and be responsible for that. Whether out of ignorance, and maybe not out of malice, they just don’t know or see the issue as the public might, then, it is really incumbent on each and every board member to raise issues that might cause the organization difficulty whether in perception, or in meeting the legal standards. “

Boards of small organizations often become personally close like a family might, making discussion of these issues difficult, Judy advised, “That is why it is important to have a clear conflict of interest policy in place, and to bring up these issues as in the best interests of the organization, it is not personal or about individuals. It is about making sure the organization is successful and not put in jeopardy in any way. Starting with that common understanding of the importance of confronting these issues, but framing the discussion in this way is important.”

How does a group deal with a tradition of member involvement and decision making, when in non profit structure the board is to be in control? Judy saw it in terms of the organizational life cycle, “It is part of the developmental cycle as the organization grows and matures. There becomes more of a separation between the board and the volunteers, or members. That is kind of a natural trajectory, and often a difficult transition. The board needs to be aware of their own organizational culture and how they can move to that place of operating in a different and more professional way appropriate to their life stage as an organization. It is natural that not everyone can be involved in every decision, but they need to keep in mind the membership, and that there will likely be some fallout within that. It is the boards job to frame this transition within the best interests of the needs of the organization and the risks involved in operating as in the past. They have to make sure membership voices are heard and information continues to flow, but just maybe not in the same way as before. Transparency is about putting it all on the table whether it involves conflict of interest issues or policy decisions, and being honest in your leadership role. “

As our community embraces the benefits of incorporated non profit status for our organizations, we need to be educated and practice the common sense rules of organizational behavior to be successful. Judy did not feel these type of problems were unique to our community, but common in nearly all developing NPCs. Board membership based on task skills may be necessary, but the ethical “best” practices of organizational leadership must be instilled within each new board member. I believe without a commitment to good process, conduct, communication, and transparency in our board members and organizations, many of these efforts will be less than successful. There are plenty of mistakes to make, and lessons to learn. When we bring our personal agenda and feelings, and have not learned to truly operate in the interests of a larger mission, our community organizations will always be at risk. I sincerely hope we can learn from all the main stream resources available to build organizations that can both grow and honor our unique cultural practices and traditions, and endure.

6 thoughts on “Editorial – Pagans and Non Profit Corporations

  1. Michelle says:

    I see very important points in this article. I think the board boot camp is an interesting idea. I think I may take the course.

  2. Gordon says:

    Board membership of a corporation is not as easy or as simple as many might think. Board members have serious obligations to the organization, and while transgressions are not usually prosecuted, they can be litigated.

    And when things go badly, as they sometimes do, it can be very messy financially and emotionally. Nels is right to warn us to be wary.

  3. Mark says:

    Very interesting editorial! So how is it that all type of churches, large and small have been 501c3 for decades? Some how “pagans” have to be afraid of the BIG BAD WOLF?
    The question I have is how do I donate to a pagan group that is not 501c3 with confidence.? A example would be, I donate something like a portable shelter to a group to be used for outdoor events. The Board or governing council changes. The shelter disappears when the council changes. Not being a 501c3, there is no guarantee that my donation stays with the group. There is no recourse to follow the item and insure that it stays within the group. I would have to track it down and confront the individual personally.
    I do understand that there is hard work to be a 501c3. I have been involved with a group in southern Indiana for close to 30 years. The group went 501c3 about a decade ago to protect the 130 acres this group occupies. They do understand all of the legal aspects of being 501c3, to carry on with their mission and to protect their vision. For them being 501c3 is the logical choice.
    I have the the gift to be able to donate to this group through deductions from my pay check. I do know that my donations stay within the land and is used towards projects on the land.
    When I listen to the debate about 501c3 within the community here in the twin cities, I do ask myself what is the motives of individuals who are so against the idea of 501c3? I wonder if some are afraid of losing power and influence within a community. That their particular world view would be at risk.
    I would be interested to read a counterpoint editorial, describing the benefits of being 501c3. If being 501c3 is so negative, then why do almost all religions and spiritual groups are 501c3?

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