Board Tips
A Few Cost-Saving Tips
If ever the time is right for cost savings, it's now. I've posted on my web site--www.cain-consulting.com--a list of 32 great money-saving strategies from Woody Clark. Here's a small sample of Woody's great ideas:
Opt Out of Your State Unemployment Tax Program: As a nonprofit, you have the right to not pay State Unemployment Insurance Tax (SUI). The alternative is to pay the actual unemployment claims requested by your previous employees. Because nonprofits typically pay more than $2 in SUI tax for every $1 they get back from the state, implementing this strategy could save your nonprofit thousands of dollars a year.
Don't Assume Your Staff Would Prefer a Salary Raise: Before giving a general or cost-of-living pay raise, survey the staff to see if they would rather take part, or all, of their raise in benefits such as time off and health, dental, and life insurance. Every dollar paid to salary costs the organization an additional 8-12 percent in payroll taxes. Most benefits are tax-free to employer and employee. If the staff opts for extra time off, you could add one, two, or three days to the holiday or vacation schedule with almost no cost to the organization.
How You Say It Does Matter
A recent call from an executive to the Board Issues Hotline--1-800-735-9471 presented a simple issue that can have big ramifications. His question for me was, "Do you think it's a good idea for a nonprofit governing board to establish an advisory board for special issues?"
Establishing the advisory group is not a problem, although I have never believed there's much of a good argument for a board to establish a separate advisory group. But what you call that advisory group can be a problem. If you really feel the need for such a group, call it an advisory committee. An advisory board will quickly see themselves as equal to the regular board or at least possessing some authority they really don't have.
Even the "Executive Board," which some governing boards establish, needs to go back to being the "Executive Committee" to avoid confusion about their authority and their relationship to the governing board.
There's also a lot of mileage to be gained in calling a committee a "task force" if you want them to feel like they're doing something really special that needs to be done quickly.
Several other terms and phrases I see tossed around need some caution:
"They're just volunteers"--No, board members are volunteers, and that's a good thing. But they are not just volunteers, implying that we can't expect much of them. This is a job for professionsals who know how to take all the responsibilities and liabilities that come with the job.
"We have two seats to fill on the board"--No, we have two open positions on the board that give us an excellent opportunity to develop our board. In fact, why not call the "Nominating Committee" the "Board Development Committee", and charge then to recruit the very best.
"We have to find someone who will take this board position"--No, you don't want to just toss the job out and take just anyone who won't say "no." We want to identify quality candidates and actively recruit them so they're eager to come to the job.
"We have to train our board"--No, board members don't like to be trained, they like to develop their skills