NYS ATTORNEY GENERAL HIGHLIGHTS MAJOR NONPROFIT CONFERENCE, OUTLINES NEEDED REFORMS


By James D’Ambrosio

Recently I attended the Westchester County Nonprofit Leadership Summit in Tarrytown, NY, where 700+ nonprofit professionals attended a day of learning highlighted by a keynote address from New York State Attorney General Eric T. Schneiderman, who discussed a number of key issues impacting nonprofits in New York and his office’s efforts collaborating with nonprofit leaders to address them.

Prior to his address, a 40-page report — “Revitalizing Nonprofits: Renewing New York” — was distributed, containing 38 recommendations developed by 37 members of the Leadership Committee for Nonprofit Revitalization, comprised of nonprofit leaders and Attorney General’ staff. The Attorney General, commissioning the report last year and released in February, asked the committee to develop specific proposals to reduce burdens on nonprofits while strengthening governance and accountability.

KEYNOTE ADDRESS

Mr. Schneiderman highlighted key recommendations in the report, namely, reducing burdens and inefficiencies nonprofits encounter doing business with the state and delays in approval for payments and contracts. The report indicates that in 2010, state contracts valued at $1.8 billion were late. Just as important, his words and tone indicated a sincere desire to work with nonprofits to enact positive changes making it easier to do business with the state, something the audience was very happy to hear. This is critical: the report indicates nonprofits employed 18.1 percent of New York’s total private work force in 2010 — 1,246,916 paid employees and nearly $200 billion in revenue — a significant portion of the state’s economy and more revenue than nonprofits generated in California (about $160 billion), and Pennsylvania (a little over $100 billion). 

He noted that some laws — written 40 years ago — are far outdated and need to be modernized to reduce burdens and increase accountability: making it less onerous to incorporate as a nonprofit in New York; allowing some documents to be filed electronically (board and membership meeting notices, waivers of notice, and votes requiring unanimous written consents); and raising the revenue threshold required for a full annual external audit to agencies raising more than $500,000 (up from $250,000) that burdens small nonprofits. The AG indicated other states do not have such restrictions.

TWO PROPOSALS: BOARD RECRUITMENT & TRAINING

The Attorney General highlighted two proposals focusing on board recruitment and training:

1) NEW YORK ON BOARD: A partnership between the state and the business community to recruit nonprofit directors and match them with agencies statewide. With a pilot program slated to begin later this year, the aim is to: a) encourage private business to provide incentives for employees to serve on nonprofit boards; b) recruit from the many colleges and universities in the state; c) tap retirees — a large pool of talent with a wealth of career experience; and d) emphasize diversity, in terms of life experience and perspectives.  

2) DIRECTORS U: An initiative providing free and low-cost director education for board members, online and in-person. Beginning later this year, the premise is that directors need a better understanding of nonprofit laws and practices — fund-raising, endowment spending, regulatory compliance, labor and employment issues, political and lobbying restrictions, familiarity with state law fiduciary obligations, federal tax exemption requirements, and good governance practices. Over time, the effort could be expanded to develop training programs for nonprofit executives and staff.   

GET THE FULL REPORT

The length and scope of the report does not permit a complete review. Get the full report here. (Link to report is located at bottom of page.)

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QUESTIONS TO READERS:

What do you think of these proposals or others contained in the report? Any suggestions to expedite them?

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