Nonprofit Governance Library

American Bar Association and the American Society of Corporate Secretaries: 2002; $99.95 each (1–9 copies); $89.95 each (10–25 copies)

Nonprofit Governance and Management; editor-in-chief, Victor Futter, managing editors, Judith A. Cion and George W. Overton; 717 pages; ISBN:1-59031-041-1.

Nonprofit Resources: A Companion to Nonprofit Governance, editor, Victor Futter; 50 pages; ISBN:1-59031-042-X.

Guidebook for Directors of Nonprofit Corporations, Committee on Nonprofit Corporations; editors, George W. Overton and Jeannie Carmedelle Frey

Reviewed by Derek A. Flanagan, CPA

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Last year, The New York Times published a special section covering charitable organizations titled “Giving” and subtitled “Unguarded Assets.” One of the lead articles began, “America has the world’s biggest collection of charities, but oversight of the nonprofit sector is parochial, piecemeal, political and, at times, accidental.”

While such a broad indictment of regulators and nonprofit leaders seems unfair, no doubt some of the well-publicized scandals of recent years point out the need for due care on the part of board members and senior managers of nonprofit organizations. Current attempts to adapt the Sarbanes-Oxley Act for the nonprofit sector clearly represent a desire for increased scrutiny on the part of nonprofit leaders.

These individuals would be well served by reading either of two publications. The first, Nonprofit Governance and Management, is a collection of 45 chapters. Contributors include managers of nonprofit organizations, as well as attorneys, accountants, fundraising professionals, and other consultants serving the nonprofit community. This updated and expanded edition of the 1997 Nonprofit Governance: The Executive’s Guide contains 20 chapters that are entirely new, six with new authors, and the remaining 19 chapters have been reviewed and updated.

While this book would be useful for anyone involved in the oversight of nonprofit organizations, it is invaluable to those new to the sector, especially those at smaller organizations that may have board members or executive staff with limited nonprofit or corporate experience.

The topics overlap, but this serves to reinforce understanding of these issues. And although the writing quality is somewhat uneven, which is probably unavoidable with 42 contributors, on the whole the material is well written. Most organizations will find that the vast majority of the topics apply to them. The topics build on each other, providing the reader with a well-rounded presentation of the issues involved.

The breadth of the subject matter is impressive. Many organizations may find the chapter titled “A Proposal Writing Short Course” alone to be worth the price of the book. This chapter takes the reader through the steps of one suggested approach to the grantmaking process. The chapter on lobbying and advocacy does a good job of presenting the basic dos and don’ts. While readers will have to look elsewhere for more detail on some subjects, this book is an excellent resource on the basics (and then some), and will be a useful reference for years to come.

Most chapters include useful exhibits. These include sample conflict-of-interest policies and mission statements, best practices, and guidelines for e-philanthropy. In addition, most chapters include a bibliography or references to statutory authority or useful websites. All references are organized by subject in the companion volume Nonprofit Resources.

The second book, the Guidebook for Directors of Nonprofit Corporations, is intended to be just that: an aid to directors of nonprofit organizations. This volume, written by the Committee on Nonprofit Corporations of the American Bar Association’s Business Law Section, covers many of the general legal issues found in Nonprofit Governance and Management. While the issues are covered in more depth, the editors have designed the book primarily for the lay reader, and it serves as a useful companion to Nonprofit Governance and Management.

The information in this guidebook will help directors gain an overall understanding of the legal and regulatory issues that affect their role. Topics include the duties and rights of nonprofit corporation directors, employees (including employment law), director liability, and the legal environment of the nonprofit corporation. The chapter on liability covers such areas as director indemnification, directors and officers insurance, and statutory protection of directors. The chapter on taxation sets forth the basics on federal tax issues commonly encountered by nonprofit corporations. It covers the basics of IRC section 501(c)(3) entities, including the distinction between public charities and private foundations, as well as IRS reporting requirements for contributions. Organizations considering the establishment of for-profit subsidiaries or joint ventures will find a chapter covering the basics of that subject.

Each chapter includes a list of suggested questions for directors to ask in order to apply that topic’s underlying issues to their own organizations. Most chapters also have a checklist that may prove useful in monitoring how the organization’s staff are fulfilling their roles.

This volume often reminds one of the size of the nonprofit sector. In their preface, the editors state that the United States has more than 1.5 million nonprofit organizations, with aggregate annual revenues exceeding $750 billion, or about 15% percent of the nation’s gross national product. Nonprofit organizations touch all of us in some manner, and they perform an essential role in our society. Nonprofit managers and board members have significant responsibilities in the fulfillment of that role. These books can help those individuals carry out their responsibilities.

Derek A. Flanagan, CPA, is a manager with Lederer Levine & Associates LLC, of Lyndhurst, N.J. He is a member of the NYSSCPA’s Not-for-Profit Organizations Committee.




















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