Does this sound familiar? You’re overwhelmed by the sheer volume of tasks in front of you—making sure your database can produce the information you

need for your upcoming fundraising appeal, writing the appeal letter and producing a new remittance envelope, updating your website to reflect your current activities and make it easier for donors to give online, organizing your next major donor campaign, coordinating your annual dinner (which has its own mile-long task list).

You know you need help, and you’re not sure where to turn. Hiring additional staff to take on some of the fundraising tasks is beyond your budget.

Here are some other options:

•Hiresomeoneonacontractbasistotakeononefundraising project—for example, producing your annual special event, coordinating your major donor campaign, or dealing with the annual appeal

•Hiresomeonetoprovidetrainingtogiveyourfundraising team additional skills and confidence

•Hiresomeonetoreviewandanalyzeyourfundraising program and help you develop a better fundraising plan

To accomplish any of these tasks—and, in fact, all of them—your best bet may be to hire a fundraising consultant. Whether you want someone to take on one of your big fundraising projects, expand the capacity of your team with training, or help you analyze and improve your fundraising planning,

a consultant may be just the person you need. Before deciding whether hiring a consultant is the route to take, it’s important to understand exactly what your needs are and what type of support will be most useful in getting you where you want to go. This article addresses key questions to consider when making the decision of whether to hire a fundraising consultant. It does not discuss the actual process of hiring a consultant. (For advice on choosing the right consultant, see Kim Klein’s Grassroots Fundraising Journal article, “Hiring a Fundraising Consultant,” available at grassrootsfundraising.org).

Key Questions

Do you have the capacity—among staff, board members and volunteers— to implement your fundraising plan?I recently conducted a fundraising training for a group of organizations working on domestic violence. I recognized the name of one of the organizations because someone from their group had attended one of my trainings about 10 years earlier, though the participant in this latest training was their relatively new development director. It was clear from the information that this participant shared over the course of the day that donor fundraising at this organization had not grown much since the last time I had seen them.

California Association of Nonprofits

Vol. 24 No. 3 May/June 2011

Inside

CAN Board of Directors Electionpage 2

Staffing Challenges page 3

Government Watch: The Times are Changingpage 4

Nonprofit Audit Committees page 8

Saving Money on Your Workers’ Compensationpage 11

Fundraising Consultant continued on page 6

The Journal for Nonprofit Managers

Should We Hire a Fundraising Consultant? Written by Stephanie Roth, Grassroots Fundraising Journal

If you would like to receive an electronic copy of the CAN Alert newsletter, email newsletter@CANonprofits.org.

2 www.CANonprofits.org Vol. 24 No. 3

Monique Padia, EditorHeather MacCurdy, Contributing WriterFelton Ward Design, Graphic DesignHarry Briggs, Illustration

The CAN ALERT is published by the California Association of Nonprofits (CAN).

Printed on recycled paper with soy-based inks, by Sundance Press, a CAN Partner.

CAN Board of DirectorsLuis Chabolla, board chairCommunications and Education OfficerThe Community Foundation of Santa Cruz County

Linda DavisCEO, Center for Volunteer and Nonprofit Leadership of Marin

Karen FreemanDirector of Operations, Southern California Grantmakers

Eric Goddard, treasurerExecutive Director, Mustard Seed Tutorial Center

Ernie HernandezExecutive Director, United Way of Tulare County

Dena JensonVice President and Director, Ventura County Community Foundation

Peter ManzoPresident and CEO, United Ways of California

Ashley C. McCumberExecutive Director, Meals on Wheels San Francisco

Adriana RochaPractice Director, CompassPoint Nonprofit Services

Thomas SchulteCPA, rbz, LLP

Richard G. SimsPresident/Owner, Human Systems Consulting

Charles T. Watson, secretarySenior Vice President, The Oertel Group: Maximizing Nonprofit Performance

CAN StaffDebra Chargois-Butler, Membership and Outreach Coordinator

Deborah Connors, Director of Finance

Ken Larsen, Public Policy Director

Kathy Lynch, Legislative Associate (Contractor)

Monique Padia, Director of Marketing and Communications

Shannon Smith, Membership Assistant

Cheryl Thompson, Staff Bookkeeper

Vote Today! CAN Board of Directors ElectionVoting Deadline: June 30, 2011

The California Association of Nonprofits is a statewide membership organization. CAN members who are 501(c)3

organizations are encouraged to vote in this year’s election of candidates to the board of directors. For this election, five new board members will be selected by vote of the membership to serve either two or three year terms, with the terms to be determined by the board at its first meeting in July.

This election process will close on June 30, 2011, and those elected to the board will begin their terms immediately upon the election results. Election results will be posted on CAN’s website on July 5, 2011.

Your vote is very important! For this election, we must have at least 3% (50) of the ballots returned from our voting members to meet the requirements outlined in CAN’s bylaws and the California Code Sections 5036 (a), (b) and (c).

For more information about the candidates, visit: www.CANonprofits.org.

All ballots which you have received via email or U.S. postal service must be turned in by 5:00 pm on June 30, 2011. If you have not received a ballot, you may download a copy from CAN’s website and vote in any of the following ways:

• Faxyourballotto:(831) 462-8529

• Emailyourballotto:smiller@CANonprofits.org

• Website: Visit www.CANonprofits.org to vote online

• Mailyourballotto:California Association of Nonprofits P.O. Box 1610 Capitola, CA 95010-1610

Free Webinar for CAN Members

Short StoriesHow to get your message out in the Facebook/Twitter world June 28, 2011 at 10:30–11:30 amCAN in collaboration with Fenton (www.fenton.com) are excited to present a free webinar to CAN members:

Telling a powerful story is increasingly important—and difficult—in today’s digital age. We read more online—often on small devices—and the number of people trying to get our attention grows as our attention spans shrink. In this webinar, attendees will learn and discuss how to approach storytelling differently, from constructing characters and narratives to targeting audiences more strategically, to better working within particular online mediums.

To register visit: www.fenton.com/short-stories-webinar-rsvp/

www.CANonprofits.org Vol. 24 No. 3 3

Continued on page 4

March–April 2011

New MembersAlliance for Israel + World Jewry

American Land Conservancy

California Invasive Plant Council

CalRecycler

Cancer Support Community—Redondo Beach

Child Advocates of Nevada County

Fenton Communications

Fomukong Health Foundation

Foundation for Economic Stability

G.E. Pia and Company

Geffen Playhouse

Gull Wings Children’s Museum

Literacy Campaign for Monterey County

Napa Valley Destination Council

Orange Home Grown, Inc.

Playhouse Arts

Project MotiVATe

Qgiv, Inc.

Raphael House

Sacramento Steps Forward

SHARE Foundation—SHARE El Salvador

Spectrum Pacific Learning

T.S. Wrobel and Associates

Teach Cambodia

The Nonprofit Centers Network

The Sam Simon Foundation Feeding Families

Utah Nonprofits Association

Renewing MembersAdvoKids

Albert Einstein Academies

Alzheimer’s Family Services Center

Antelope Valley Committee on Aging

Arc Ecology

Area 1 Agency on Aging

Asian & Pacific Islander American Health Forum

Bay Area Youth Music Society

Ben Lomond Quaker Center Association

Berkeley Student Cooperative

Bernal Heights Neighborhood Center

Blue Planet Run Foundation

Bolsa Chica Land Trust

Bonny Doon Volunteer Fire/Rescue, Inc.

Breathe California of Sacramento— Emigrant Trails

Build Rehabilitation Industries, Inc.

Calico Center

California Association of Social Rehabilitation Agencies

California Biomedical Research Association

The economic crisis has taken its toll on the nonprofit sector. According to Nonprofit HR Solutions, “2011 Nonprofit

Employment Trends Survey,” the greatest staffing challenge indicated by survey respondents was maintaining salary budgets in the face of decreased annual revenues. This finding echoed last year’s survey. The other budget-related staffing challenge, the ability of nonprofit organizations to attract qualified staff within a limited budget, was rated as the second greatest staff challenge reported this year.

When considering the greatest challenges by budget size, small organizations (44 percent) and medium organizations (32 percent) noted maintaining salary budgets with decreasing revenues as their number one challenge. A smaller percentage of large organizations (23 percent) cited maintaining salary budgets as their greatest staffing challenge. For large organizations, (25 percent) finding qualified staff was the greatest staffing challenge.

The information was excerpted with permission from the “2011 Nonprofit Employment Trends Survey.” To download the entire survey visit: www.nonprofithr.com/survey n

Staffing ChallengesMaintaining Salary/Payroll Budgets

Salary and Benefit Surveys for California Nonprofits

• 2011CompensationandBenefits Survey—“Fair Pay for Northern California Nonprofits” Compensation Associates: www.nonprofitcomp.com Fee is based on a sliding scale, ranging from $165– $495.

• 2011CompensationandBenefitsSurvey—Southern California Center for Nonprofit Management: www.cnmsocal.org/2011survey.html Flat fee for nonprofit organizations $425

Greatest Staffing Challenge

35%

30%

25%

20%

15%

10%

5%

0%Finding

Quali�edStaff

Hire Quali�edStaff With LimitedBudget

MaintainingSalary Budgets

With LessRevenue

18%22%

32%

Finding qualified

staff

Hire qualified staff with limited budget

Maintaining salary budgets

with less revenue

4 www.CANonprofits.org Vol. 24 No. 3

RENEWING MEMBERS continued

California Council of Land Trusts

California League of Conservation Voters

California ReLeaf

California Wilderness Coalition

California Youth Connection

Cambria Connection

CAP Solano

Catholic Charities of San Bernardino and Riverside

Center for Community Advocacy

Center for Sustainable Change

Center for Volunteer & Nonprofit Leadership of Marin

Cerebral Palsy Center for the Bay Area

Chamber Music Unbound

Chimineas Ranch Foundation

Christian Church Homes of Northern California

Clearwater Residential Care for Elderly

Collaborating Agencies Responding to Disasters

Community Action Partnership of Orange County

Community Forestry International, Inc.

Community Foundation of Mendocino County

Community Rehabilitation Services, Inc.

Companions in Waiting Rescue and Adoption, Inc.

Conejo Free Clinic

Congregation Beth David

Constitutional Rights Foundation

Contra Costa Interfaith Housing

Counter Pulse

Craigslist Foundation

Creative Legal Solutions

DCBA

Dehesa Charter School

Doves of Big Bear Valley, Inc.

DZH Phillips LLP

East Bay Community Recovery Project, Inc.

Eastern Sierra Land Trust

Economic Roundtable

El Cajon Project, Inc.

El Pajaro Community Development Corporation

El Pueblo

Elizabeth House

Elkhorn Slough Foundation

Ella Baker Center for Human Rights

Eschaton/Resource Center for Nonviolence

Executive Service Corps of Southern California

Fair Housing Napa Valley

Family Violence Law Center

Firelight Foundation

First 5 Association of California

First Unitarian Church of Oakland

Continued on page 5

Written By Ken Larsen, CAN’s Public Policy Director, klarsen@CANonprofits.org (916) 402-1335

There’s no doubt we are living in a pivotal era for nonprofits. Transformations are

underway or under consideration that are shaking our sector at its very roots.

Government budgets may command the lion’s share of attention, but deficits and spending cuts are only part of a larger picture. Long-held distinctions between the public, private and nonprofit sectors are getting more muddled by the day, leading to difficult dilemmas that may take years to sort out. Here’s a quick look at two often-overlooked areas of change, both of which are the subjects of current legislation where CAN has played an important role.

Is it a nonprofit or a public agency?For over 40 years, the California public has enjoyed the right to demand access to state and local government records under the California Public Records Act (CPRA), and, more recently, by voter approval in 2004 of “The Sunshine Act.” The result has been thousands of public records requests, some leading to the exposure of major crime and corruption, like the current nationally-publicized city officials’ pay and perks scandals in the Southern California cities of Bell, Maywood, and Vernon. Others are what attorneys like to call “vexatious inquiries” meant to annoy and disrupt the activities of a government body with which a member of the public has a grievance.

Nonprofits have until now been immune to the burdens imposed by such requests. Now a door has been opened with an agreement between state university officials and State Senator Leland Yee (D-San Francisco) to allow access to certain records of campus foundations and other nonprofit “auxiliary enterprises” such as campus bookstores. CSU and University of California officials fought for several

years to keep secret the financial details of how campus foundations manage nearly $2 billion in their endowments. These auxiliaries have been the subjects of court cases and media investigations for almost a decade because of alleged co-mingling of their management leave funds with university operations.

If signed by the governor, Yee’s bill SB 8 would mark the first extension of the CPRA to nonprofits. However, its application will be strictly limited, thanks to CAN-negotiated amendments to earlier versions of SB 8 that prevented the bill’s provisions from including nonprofits with only a marginal relationship with state universities.

Is it a nonprofit or a for-profit?For centuries, nonprofits have partnered with the private sector in a wide variety of ways. CAN, with its wholly owned for-profit subsidiary CAN Insurance Services, itself is one long-standing example.

In recent years, a world-wide movement has emerged, with some activists asserting that the existing legal structures are a barrier to social enterprise. Their thinking is that state laws need to be changed to allow for-profits to engage in nonprofit-like activities without exposing the directors and managers to liability to investors for putting social benefits on equal footing with financial returns.

Two bills currently moving through the Legislature are a step in that direction:

Government Watch—Continuing Series

Continued on following page

The Times Are Changing

www.CANonprofits.org Vol. 24 No. 3 5

RENEWING MEMBERS continued

Fresno Metro Ministry

Friends of Oakley Community Foundation

Friends of the Santa Cruz Public Libraries, Inc.

Future 500

Future Roots, Inc

Girls to Women

Glad To Be Here

Global Oneness Foundation

Glow Foundation

Gold Rush Charter School

Golden Empire Youth Football

Green For All

Gurnee and Daniels, LLP

Health Education Council

Healthview at Home, Inc.

Hensley Associates

Hesperian Foundation

Heyday Institute

History Museum of San Jose

Hollywood United Methodist Church

Independent Living Resource Center, San Francisco

Integrity Charter School

Inter Tribal Sports, Inc

International Association for the Study of Dreams

Irvine Housing Opportunities, Inc.

Islamic Society of Orange County

Jamboree Housing

Joe Goode Performance Group

Kateri Tekakwitha Fund

K-Tech Computer Services

L.A. Family Housing

Lake Tahoe Humane Society and SPCA

League of Allied Arts Corp

Legal Aid Society of Santa Clara County

Livermore Valley Performing Arts Center

Living In Familiar Environments (L.I.F.E.)

Long Beach Rescue Mission

Los Angeles & San Gabriel Rivers Watershed Council

Los Angeles Community Reinvestment Committee

Los Angeles Conservancy

Mama Makeka House of Hope

Margo Linden Katz, CPA

Matrix Parent Network and Resource Center

Mayme A. Clayton Library & Museum

Meadowridge Mutual Water Company

Mendocino Land Trust

Michelle’s Place

Monarch School Project

Monterey County Rape Crisis Center

Morongo Basin Arch

Continued on page 7

•AB361(JaredHuffman,D-SanRafael)would allow the creation of benefit- or B corporations and permit corporate directors to pursue a broad set of public benefit objectives in addition to profits.

•SB201(MarkDeSaulnier,D-Concord)would allow the creation of “flexible purpose corporations” that seek both profits and at least one broader public benefit and shield board members from claims that they have violated their fiduciary duties by pursing public benefit goals, which “may include, but are not limited to, charitable and public purpose activities that could be carried out by a nonprofit public benefit corporation.”

Although AB 361 and SB 201 may have superficial appeal because they appear to enhance “corporate social responsibility,” upon closer examination they raise a number of disturbing issues. That’s why CAN has opposed these measures

and asked the Legislature to slow down and take a close look at the impact on nonprofits. We need to examine the potential for abuse before adopting one or both of these approaches or any other changes that may rebrand for-profits as

“public benefit’ organizations. We need to encourage formation of more entities like the current wave of for-profit colleges, which have been recently called to account by the U.S. Department of Education for their high tuition rates and low education expenditures.

Participation Matters!In these changing times, it’s more important than ever that nonprofits be in the forefront of public policy discussions. Please join with CAN’s staff and your colleagues throughout the state on our legislative briefing webinars every second Monday of the month. Be informed about the details behind the headlines and the nonprofit news you won’t hear anywhere else. n

Continued from previous page

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6 www.CANonprofits.org Vol. 24 No. 3

The development director talked about the problem of not enough time to do the individual donor work because of the pressures of what felt like never-ending foundation deadlines for letters of inquiry, proposals and reports. She said that even though the executive director, board members, and even some of the program staff were willing to help with fundraising, it was hard to carve out the time to plan and coordinate their efforts.

I realized that all the training and consulting in the world would not help this organization. What they needed was the commitment of resources (including staff time) to their individual donor program in a way that enabled them to be less random and more focused and consistent in this aspect of their fundraising.

A consultant can provide advice, guidance, and expertise to create fundraising plans, oversee a capital campaign, train the board and/or staff in asking for money, and help address problems that come out in the course of implementing a plan (among other things), but the actual day-to-day work

of carrying out fundraising strategies and building relationships with donors has to be done by the staff, board members and volunteers who make up your fundraising team.

Where a consultant can be helpful in such a situation is in addressing an organization’s inability to form a fundraising team or even to conceptualize what such a team would do and who might be on it.

Do you have staff capacity but need help with strategy, planning and coaching?Although a fundraising consultant does not usually take work off your plate (with some exceptions, described below), they can fulfill a critical function in helping you to be more strategic, better organized, and more effective in developing a strong fundraising program. Here are some of the things a fundraising consultant can do:

•Conductanassessmentof your fundraising program’s strengths and challenges, and deliver a set of recommendations for how to improve your fundraising effectiveness

•Assistinthedevelopmentofafundraising plan

•Reviewfundraisingmaterials,including fundraising appeals, case statements, annual reports, and so on

•Assistintheevaluation(anddesign) of your website, looking at it through the lens of a donor or other potential supporter for clear messages that make a compelling case for why someone should support the organization

•Providefundraisingtrainingtoboard, staff, and other members of the fundraising team on how to ask for money

•Helpyoufindthebestfundraisingdatabase for your organization

•Helpplanandcoordinatea capital campaign

•Provideongoingsupportandcoaching as you implement your fundraising or campaign plan

•Provideproblem-solvingassistancefor the challenges you encounter in trying to build a strong individual donor program

•Coordinateoneormoreelementsof your fundraising plan, such as member appeals, a special event, or a donor campaign

Whether you hire a consultant to provide the most minimal advice and feedback or to work intensively to coordinate a major element of your fundraising plan, remember that you need to have the capacity on staff or among a group of very reliable volunteers to work closely with the consultant and to carry out many of the day-to-day activities. Many consulting relationships run aground because of unspoken (and then unmet) expectations about what a consultant can and can’t do, or because of confusion about the role of the consultant and the role of the staff and/or volunteer team.

For example, years ago, I was hired to help coordinate a major donor campaign. I did not realize until about three weeks into the contract that the board and staff expected me

Fundraising Consultant continued from page 1 “ …remember that you need to have the capacity on

staff or among a group of very reliable volunteers to work closely with the consultant and to carry out many of the day-to-day activities.”

Continued on following page

www.CANonprofits.org Vol. 24 No. 3 7

National Film Preservation Foundation

Next Door—Solutions To Domestic Violence

No Bully

North Coast Rape Crisis Team

North Valley Caring Services

Oakland Community Organizations

O’Hanlon Center for the Arts

One OC

Opportunity Fund

Pacific Collegiate Charter School

Pacific Council on International Policy

Palo Alto Humane Society

Pamela Ross, CPA

PARCA

Parents Anonymous, Inc.

Parents Center

Patrick W. Golden

Peace Development Fund

Peace Over Violence

Petaluma Museum Association

Plumas Rural Services. Inc.

Portola Family Connection’s

Pregnant Mare Rescue

Public Health Foundation Enterprises

Quest for Excellence TM

Radiance of Hope Counseling Inc.

Redwood Park Association

Restore Hetch Hetchy

Resurrection Community Church

Rick Sims

Rim of the World Interpretive Assocation

Riverside Medical Clinic Foundation

Rocky Point Charter School

San Diego Bowl Game Association

San Francisco Arts Education Project

San Gabriel Valley Habitat for Humanity

Santa Cruz Community Counseling Center, Inc.

Schools, Mentoring and Resource Team

Sequoia Humane Society

Sequoia Riverland Trust

Shasta Land Trust

Sheppard, Mullin, Richter & Hampton LLP

Sisterhood of Survivors

Sisters of Social Service

Skirball Cultural Center

Smart People Foundation

Society for New Communications Research

Sore Feet Saviors

South Coast Wildlands

South County Housing

Southern California Library

SPCA of Monterey County

RENEWING MEMBERS continued

Continued on page 8

to ask my own colleagues and contacts for money. They were surprised at my refusal to do that until I said, “How would you feel if I contacted your board members and donors for money for another group that I was working with?” Although they understood what I meant, they were still disappointed and the relationship was damaged. Now I clarify the boundaries of the relationship early on.

Do you just need extra help on a specific fundraising activity?Consultants can do the more hands-on work involved in certain types of fundraising projects. This is often the best choice if you have a very small development department (or if the “department” consists of one

person who has additional responsibilities beyond fundraising) and the fundraising activity is labor-intensive over a limited period of time.

Special events is a common area for such consultant involvement, as there are consultants who specialize in event production and who carry out activities such as finding a venue; dealing with all of the issues related to food, drink, stage managing, and working with the people who will be part of the program; helping create the program book; and designing and producing the invitation. Even when you hire someone in that capacity they should not be expected to solicit sponsors for the event, sell ads for your program

Free posting to CAN’s Nonprofit Event calendar

CAN Member Benefit

This member benefit is a great way to promote your events to the California nonprofit sector! If you would like to post an event, simply email Monique Padia, mpadia@CANonprofits.org with the following information:

Date and time of the event

Contact information: Name of contact, email address, phone number and web address for more information

Short description of the event and any costs associated

California Association of Nonprofits Protecting, Strengthening & Promoting Nonprofits

Fundraising Consultant continued on page 10

Continued from previous page

8 www.CANonprofits.org Vol. 24 No. 3

Written by Deborah Connors, CAN Staff

W ith the increased scrutiny on nonprofits as a result of the California Nonprofit Integrity Act,

Sarbanes-Oxley and the new IRS Form 990, ensuring strong financial oversight is not only a best practice, but has become imperative. While the audit committee requirement of the Nonprofit Integrity Act generally pertains to organizations with $2 million or more in revenue, all nonprofits that rely on stakeholder funding would benefit from increasing their financial oversight by applying some or all of these audit committee best practices. Because an audit committee may have as few as one member, it is not out of the question for small nonprofits to adopt some form of increased financial supervision.

For organizations that are required to have an audit committee under the Nonprofit Integrity Act, basic requirements must be followed (See the insert on page 9) and specific duties must be performed (see insert on this page). While the requirements and duties of

the Nonprofit Integrity Act lay a basic foundation for establishing an audit committee, going above and beyond these basics and adopting best practices will improve the effectiveness of your financial oversight and assure stakeholders that your organization upholds the highest standards of financial integrity. Here are six best practices to consider adopting:

1 Include at least one committee member with experience in accounting, auditing and financial

reporting. Because this committee is charged with assuring the board and stakeholders that the organization’s financial statements and internal controls are in compliance with generally accepted accounting principles, having at least one member who is capable of making these types of assessments makes good sense. Having more than one member with financial experience and/or education is ideal, but not always possible. If your board composition does not contain this expertise, you may consider looking outside the board since this committee may be comprised of non-board members.

Nonprofit Audit Committees

CAN’s Practices for Nonprofit Excellence—Continuing Series

Continued on following page

St. Francis Home for Children

St. Joseph’s Family Center

Susan E. Goranson, CPA

Teen Line

The Employee Rights Advocacy Institute for Law and Policy

The Shivas Irons Society

The Third Sector Company, Inc.

Turning Point Community Programs

Under One Roof

Unitarian Universalist Congregation

United American Charities, Inc.

Vajrapani Institute

Vector Rehabilitation

Volunteer Center of Sonoma County

Watsonville Law Center

Western Youth Services

Women’s Daytime Drop-In Center

Work Transition Services

World Harvest

Young Storytellers Foundation

Youth and Family Service, Inc.

Youth Music Monterey

Youth Treatment & Education Center

YWCA—North Orange County

Sustaining MembersABC-Learn, Inc.

Blue Shield of California Foundation

CalChamber

California State Parks Foundation

Cars 4 Causes

City of Santa Monica

Drew Child Development Corporation

Edison International

Family Resource and Referral Center

Frank H. and Eva B Buck Foundation

Humboldt Area Foundation

Irvine Health Foundation

Josephine S. Gumbiner Foundation

Kidango

Kings Community Action Organization Inc.

MoveOn.org

Provident Credit Union

rbz, LLP

Richard and Rhoda Goldman Fund

San Diego Association of Nonprofits

The California Wellness Foundation

Turning Point Community Programs

UNUM Group

Valic

Walter and Elise Haas Fund

Wells Fargo Foundation n

RENEWING MEMBERS continued

Nonprofit Integrity Act—Duties of the audit committee

n Recommend to the board of directors the

retention and termination of the independent auditor.

n Negotiate the compensation of the auditor on behalf of

the board.

n Confer with the auditor to satisfy committee members that the

financial affairs of the organization are in order.

n Review and determine whether to accept the audit.

n Ensure that non-audit services performed by the auditing

firm conform with standards for auditor independence and approve any non-audit services performed by the audit firm.

✓ ✓

✓✓

✓

www.CANonprofits.org Vol. 24 No. 3 9

2 Record and maintain minutes of the audit committee meetings. These will serve as a record of

the activities of the committee and how the committee is fulfilling its duties. At the very least, the minutes should record the actions and/or motions of the committee and a summary of the related discussions. All minutes should be reviewed and formally approved by the audit committee members.

3 Adopt a written audit committee charter or bylaws. While there is no requirement that a nonprofit

audit committee have a charter, having one in place serves several important purposes: 1) it provides a common understanding of the activities that the audit committee will and will not perform, 2) it provides consistency in the duties as the members rotate, 3) it lays out the functions, terms and composition of the committee. At the very least, a charter should address: primary responsibilities, number of members, number of annual meetings, meeting attendance requirement, designation of committee chair and secretary, member terms and staggering, and a conflict of interest statement. A sample Audit Committee Charter can be found on CAN’s members-only website at www.CANonprofits.org.

4 Include a review and assessment of the organization’s internal controls as a responsibility of

the committee. The objective here is to ensure that controls are in place to provide reasonable assurance that the organization’s assets are safeguarded, that transactions are properly authorized and recorded, and that the organization is in compliance with applicable laws and regulations.

The committee should have discussions about internal controls with both senior management and the auditor. Any discrepancies or weaknesses should be reported to the board and immediately addressed.

5 Set fixed appointment terms for committee members. While the length of the committee member

terms will depend on the needs of your organization, in general, terms of 2 to 4 years is ideal. One year terms may be too short due to the complex nature and scope of the duties of this committee. The length of the terms will somewhat depend on the number of committee members. Shorter terms would not have as great an impact on the effectiveness of larger committees.

6 Stagger the terms of the committee members. Due to the complexity of the

responsibilities of this committee, membership continuity is important. Staggering the terms of the members assures, as much as possible, that the lesser number of members are newly appointed.

If your organization relies on stakeholder funding, having an audit committee in place will go a long way toward assuring them that your organization upholds the highest standards of financial integrity. Adopting some or all of these best practices will help to ensure the effectiveness of the committee. n

Continued from previous page

Nonprofit Integrity Act—Requirements of the audit committee

Members must be appointed by the organization’s governing board

May have as few as one member and may include non-board members

Members of the finance committee must constitute less than 50% of the audit committee

The chair of the audit committee may not be a member of the finance committee

May not include any staff member

May not include any person who has a material financial interest in any entity doing business with the organization

If audit committee members are paid, they may not receive compensation in excess of the amounts received by members of the board of directors for board service

“ If your organization relies on stakeholder funding, having an audit committee in place will go a long way toward assuring them that your organization upholds the highest standards of financial integrity.”

10 www.CANonprofits.org Vol. 24 No. 3

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book, or sell tickets. That will still be the responsibility of your staff, board, and volunteers, who are the ones, after all, with the contacts and relationships with potential supporters for your group or cause.

Another useful opportunity to use consultants is to coordinate a time-limited individual donor campaign or an annual fundraising phone bank, or to assist volunteers in putting on a house party. In each of these situations, however, the consultant’s time is best spent on overseeing the campaign; producing materials to assist the team of solicitors; providing support, coaching, and training; and dealing with other logistical needs. The consultant should not be expected to host the house party, solicit donors, or come up with her or his own list of people to ask.

Does your fundraising team need new skills or motivation?Even with experienced fundraising staff, a willing board, and a good fundraising plan, you may find that there is something else your fundraising team needs—an opportunity to learn new skills, understand how fundraising fits into the rest of the organization’s goals and strategies, and motivation to follow through on their fundraising commitments. Although training itself won’t fix all of the fundraising challenges you face, it can inspire, encourage, and give clearer direction to your fundraising team, as they gain the tools they need to get out and start asking for money.

Fundraising training can be one of the most helpful things a consultant can provide if the organization is ready to put the people who have been trained to work immediately. For example, I did a training for a fundraising team the day before it was about to launch a $75,000 annual fund campaign with

calls to potential major donors. We practiced making the phone call, setting up the meeting, and asking for money. We reviewed how to know if someone is a true prospect, and we went over the process of asking and follow up. When the team began their work the next day, the momentum and excitement of the training were still fresh.

Consultants are like anyone in any of the helping professions—they help you best when you and they are clear about what you need and what they can provide, and when you are willing to do the work required to make the project successful. Ultimately, the success of a consulting relationship is like that of any relationship: it works best when expectations are clear, questions are raised immediately, confusions are discussed and resolved thoroughly, and there is genuine respect between the consultant and the organization.

Stephanie Roth is a trainer and consultant with Klein and Roth Consulting and the former editor of the Grassroots Fundraising Journal, grassrootsfundraising.org. n

Fundraising Consultant continued from page 7

CANInsuranceServices A subsidiary of the California Association of Nonprofits

www.CANonprofits.org Vol. 24 No. 3 11

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Workers’ compensation insurance covers your employees when injured while

on the job by paying medical claims and replacing salary. All California employers, including nonprofit organizations, which have one employee or more, must carry workers’ compensation insurance. Organizations which fail to purchase this type of insurance are in violation of the California Labor Code and will be closed down until the proper coverage is secured and may be fined $1,000 per employee.

7 Steps to Saving Money on Your Workers’ Comp

Shop for Insurance CoverageAsk your insurance broker to compare rates on an annual basis. Shopping should start at least 90 days before your annual renewal date. Many nonprofits are insured through State Fund but there are other workers’ compensation carriers in California, often with lower rates than State Fund. Ask your insurance broker if any of the other carriers are good options for your organization.

Manage your Workers’ Compensation ProgramBegin cost control with a safe working environment for your employees. Inspect workplaces and hold managers and staff accountable for safe conditions and practices. You can also have a staff member in charge of monitoring your workspace for safety issues.

Know your Workers’ Compensation Rights as an EmployerUnless your employee has pre-designated their own physician in writing prior to an injury, you can designate a doctor for the treatment of work-related injuries. When an employee is injured and opens a claim, communicate with the employee about how he/she is doing, when they are going to return to work, etc. You can also consider a modified work program—check with your insurance broker to help put this in place.

Close “Open Claims”When an employee first files a claim, the insurance carrier will estimate what they think the cost will be and this amount is temporarily “charged” to your account. Once the claim is closed, the amount charged against your account will most likely be lower which will help reduce the cost of your next annual premium.

Check your Class CodesYour employees are classified into “class codes” depending upon the type of work they perform. These class codes have corresponding rates and determine how much you pay for every $100 of payroll your employees receive. Good written job descriptions help classify your employee correctly.

Handling an AuditYour insurance carrier will occasionally “audit” your workers’ compensation account to make sure that you reported your payroll correctly and that your employees are properly classified. Talk to your insurance broker about how to prepare for an audit. Be sure to assign an experienced employee to work with the auditor. If an auditor incorrectly calculates your payroll or reclassifies your employees into a wrong class code during an audit, you can be surprised with an additional bill.

Stay Informed on Workers’ Compensation Reform and PracticesCheck often with your broker for updates and practices in regard to workers’ compensation; you can also visit the State of California website for more information http://www.dir.ca.gov/dwc/dwc_home_page.htm n

Saving Money on Your Workers’ Compensation

CAN Insurance

As an employer you must:

n Maintain workers’ compensation insurance

coverage at all times

n Display the current workers’ compensation

poster in all workplaces

n Provide written workers’ compensation information

to all new employees

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Safety Manual•Workers’ Comp

Audit Checklist

And More…n

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