Robert's Rules in Real Life

The Seattle Times describes today how a former program manager for  Senior Services has been charged with theft of $91,000.  

We thought blog readers might find our recent newsletter article on this topic of interest, as given below:

The weekend paper brings yet another sad story of theft from a nonprofit – sadder in this case because the thief was a deaf employee, working for the Vancouver Association of the Deaf. Fortunately the amount involved was small, only $6,527. It’s not like the national nonprofit organization I was a member of some years ago, whose energetic and simpatico treasurer was funding her condo in Hawaii and her fancy car from the accounts.

What is it about the nonprofit world that makes its board members so trusting? We are working to improve the human condition, I guess, and don’t like to look at those aspects that need correction rather than improvement. It’s also true that thinking about money is unpleasant, because there’s never enough. And it’s usually a challenge to make sense of the financial statements. If you’re not a trained accountant, you may want to throw up your hands and take the executive director’s word that all is in order.

But embezzlement is all around us. If you serve on a nonprofit board of directors, you have a duty to make sure that theft isn’t taking place under your nose. Make it your New Year’s resolution to get a firm handle on your nonprofit’s financial workings. All that’s necessary is to pay attention and ask questions. Here are some useful resources, all available without charge:

• Who’s responsible for the money?
• Nonprofit embezzlement: more common and more preventable than you think
• Five internal controls for the very small nonprofit

We salute Blue Avocado, which offers great information on this topic, and wish you a productive year that betters the lot of humankind while seeing all the affairs of your nonprofit organization in good order!

Ann G. Macfarlane
Professional Registered Parliamentarian

(c) Jurassic Parliament 2012. All rights reserved.

The Lewis County Historical Museum is in big trouble, and the secretary proposes to change a bylaw. Is this the right way to go?

Jurassic Parliament is always glad when boards think about their bylaws. Too often, bylaws are regarded as boilerplate, verbiage that has to exist but is not interesting. We believe that bylaws are fascinating and we know that they are vital to your work on a nonprofit board of directors.

Bylaws are the foundation on which any serious nonprofit organization conducts its work. They set out the terms and conditions under which the good purposes of your group can be pursued. They need to be carefully written and frequently referred to. Bylaws moldering in a file folder do nobody any good at all.

In the case of the Lewis County museum, over the last four years the endowment has shrunk from about half a million dollars to a couple of grand left in the checking account. Three employees have been laid off indefinitely, the police locked the building up tight in order to get the financial records, and the board has been meeting in emergency session. The board secretary proposed to change the bylaws to require that any future activity with any future endowment money must be signed off on by all members of the board of directors.

In our view, this would be a clumsy way to ensure probity in a nonprofit’s financial dealings. Any responsible board must undertake a series of steps regarding its finances, some of which we outline in our article “Who’s Responsible for the Money?” For example, one of the laid-off employees was the bookkeeper, who was also serving as treasurer – it is not a good idea to have a single person fulfill both roles.

When you are elected or appointed to a nonprofit board of directors, take the time to read the bylaws and to review the financial arrangements. Don’t allow the pleasure of joining a worthy endeavor to keep you from examining how things are done, and asking questions to become informed. Whether you serve as treasurer, chair, or “just” an ordinary director, you are responsible for using that money wisely. Best to think about the bylaws before the crisis, rather than after.

Ann G. Macfarlane, PRP

© Jurassic Parliament 2011. All rights reserved.