governance updates

By: John R. Stoker

One afternoon as I was passing through the airport on my way home, I ran into a colleague of mine, Stephen M. R. Covey, the author of the book, “The Speed of Trust.”  We stopped and exchanged a few pleasantries. I could tell that he needed to get through security, so I bid him safe travels.

As he was hurrying away, I yelled after him, “I know something faster than the speed of trust.” He yelled back, “What’s that?” I responded, “Distrust.” He laughed as he hurried away and responded, “You’re probably right.”

Think about it for a minute. Some people will trust you from the beginning of your relationship without having any experience with you.  Others won’t trust you no matter what you do; you really have to work to earn their trust. Still others begin their relationship with you in a neutral position. They will wait to see what you say and do before they trust you.

No matter where the trust in any relationship begins, what we know for sure is that it doesn’t take much negative behavior to diminish the trust that people have in you.

Here are a few tips to help you assess your trustworthiness and to increase the confidence people have in you.

Do you walk the talk?

There is probably nothing that erodes trust quicker than saying one thing and then doing another. The first time this happens, people will take a closer look at your behavior. But if it happens repeatedly, people will come to distrust you and not believe anything that you say. You will appear as if you just say what you think people want to hear. This seeming lack of credibility will cause people to question your intentions and can cause lasting damage to your relationships.

What to do? Stop and think about what you are about to say, or what purpose your message needs to convey, and then say what you truly mean. Being deliberate and intentional about your message will increase alignment between your message and your behavior.

Do you keep your commitments?

This is closely associated with the previous question. Sometimes we make commitments and things change. When this happens, it is important to acknowledge your commitment and make necessary adjustments. If you let another commitment take priority over a previous commitment and don’t manage that dynamic, then people will learn to not take you seriously and may not keep their commitments to you.

What to do? Keep a calendar of your commitments and manage them. If something changes, then be sure to communicate those changes and make new arrangements as soon as you can. Don’t blow people off or forget to keep your commitments. Using some kind of planning or calendaring software will help you to keep your commitments while strengthening the trust that others give you.

Is your behavior consistent?

If you have wild mood swings and are unpredictable, your erratic behavior will lead people to distrust you. In one of my first corporate positions, I had a manager who had broad swings in behavior and mood. You never knew if your performance would be celebrated or trashed in front of others. The first person to arrive in the morning would test the waters and then alert everyone at the coffee machine if we could engage with our manager or should make ourselves scarce that day. Consequently, few people felt that they could fully trust him.

What to do? Notice if people approach you and ask for your input or support on their work. If you are not approached by others, perhaps you could find a respected colleague and ask for feedback about how you come across. If someone will be honest with you, listen to what they have to say. Ask for examples and thank them when they finish. If you find that people are unsure about how to approach you, strategize some ways to manage your behavior and mood so it is more predictable and consistent.

Do you misrepresent the truth?

This happens more frequently than people would like to admit. People are often afraid to speak up and tell it like it is, fearing the perceived negative consequences that could occur. This perception will have a negative impact on behavior. When people don’t keep their commitments or meet expectations of performance, then they feel forced to cover their mistakes to justify their behavior. This leads others to avoid interacting with those individuals and to distrust the stories they offer as excuses for their behavior.

What to do? If you find yourself misrepresenting or exaggerating situations, then you are at risk to not be taken seriously and are setting yourself up to be distrusted. Stretching the truth and making excuses can become a habitual response. If this is often your first reaction, recognizing your tendency to do it, determining your motivation behind this response and correcting it will go a long way toward building trust.

Do you withhold information from others?

This is usually a power play of sorts where people make themselves the gatekeeper of what others need to know to do their work. Such behavior leads to frustration on the part of others and also can lead to people not sharing information that you may need. Withholding information also leads people to figure out how to work around you so they have as little interaction as possible.

Sometimes, for legal reasons, you may not be able to tell others what you know. When this is the case and others press you for information, you simply need to tell people that you can’t tell them about a certain situation because of legal ramifications to you and your company.

What to do? Ask people what information they need and, specifically, identify deadlines. Look to offer support and address others’ needs and concerns to increase the success of those that rely on you in some way. When people ask you for information that you can’t share, simply manage the situation and tell them that. They will understand.

Do you gossip about others?

Nothing will erode trust quicker than talking about others behind their back. Unfortunately, people often talk about others rather than to others. When you gossip, your behavior tells your listener that if you would talk about someone else, then you would also talk about them.  Although they may listen to you and engage in the gossip, they won’t trust you. This kind of behavior ruins relationships, destroys company culture and creates emotional drama that everyone would rather avoid.

What to do? Stop it. If you have an issue with someone, talk to the person you need to talk to and avoid the rumor mill that puts people on negative alert but never solves the problem. Otherwise you will just get more of the same – poor results and no trust.

Do you throw others under the bus?

This behavior usually takes place when someone is trying to avoid responsibility or accountability for the results that were created.  Sometimes, when others have not kept their commitments to you, their behavior has a direct negative effect on your results. When this is the case, ask yourself, “Did I manage the situation in such a way that kept them from being successful? Did I do my part to help them to be successful and to achieve the desired results?” Sometimes we become so busy and have so many things to do that we fail to manage a person or a situation in an optimal fashion.

What to do? Be responsible and take accountability for managing others, facilitating activities that will produce the desired results. When things don’t go as planned, examine your part in the process and accept ownership. Doing so will go a long way to creating and strengthening trust.

Do you keep confidences?

Someone once told me that there is no such thing as a secret until the person you told it to is dead. If someone shares something sensitive and important with you in confidence, unless there is a specific and legal reason not to, you should keep those things confidential. If you are going to share something important with another person, you should assume that sometime or somewhere what you share will be shared with someone else.

Are you supportive of others?

Nothing increases trust like being sincerely interested in and supportive of others and their efforts. If you are a leader and you frequently ask people what they need from you and how you can help and support them, they will feel the satisfaction that comes in knowing someone cares about them and their success. That care and concern will translate into increased trust.

What to do? Check in frequently and offer support. This will afford you the opportunity to get to know them, how they are doing and what you can help them with. Making interpersonal connections such as these will improve their work and their performance.

Our interactions with others serve either to build trust within our relationships or call it into question. Recognize that what you do and say is the first step in building and strengthening trust. As you consciously work to increase others’ confidence in you, your interactions will improve and you will achieve greater results. And, you’ll never have to worry about the speed of distrust.

Connect with John R. Stoker on Facebook, LinkedIn, or Twitter.

By: Michael S. Hyatt

Under-communication is a consistent problem in nearly every business. You can solve that by taking ownership of the communication happening around you.

I’ve worked with more than my share of poor communicators over the years. One was a boss who rarely shared information and never in a timely way. My office happened to be in a different building than his, so getting to our weekly one-on-one meeting took a little effort. Each week, I prepared a status report on my major projects, developed a list of answers I needed to make progress, and drove to the office in time for the meeting.

I can’t tell you how many times I was greeted by his assistant with a pained expression. “I’m so sorry,” she’d say. “He had to step out.” Not only did he cancel most of our meetings, but he did so without notice.

When we did meet, he provided little or no clarity. And he dodged most of my questions with “I’ll have to get back to you on that.” It was maddening!

Most under-communication is inadvertent. People are simply unaware of the gap between what’s in their mind and what’s in yours, and you suffer from that same lack of awareness. In fact, a team of researchers writing in the Journal of Political Economy labeled this phenomenon “the curse of knowledge.” It means that when you know something, it’s very hard to remember that other people don’t.

Fortunately, the solution is remarkably simple. All you have to do is step up and take responsibility for all the communication that comes from you or to you. Here’s how:

Determine To Be The Solution
Most of us are not fully aware of our own part in the communication quagmire. We may expect others to do all the work of conveying information. The first step in communicating clearly is to determine to be the solution, not the problem. Are you ready to champion clear communication in your workplace?

Externalize Your Thinking
The curse of knowledge affects everyone, including you. As a result, we don’t communicate or don’t communicate enough. Be aware of the gap between your understanding and that of your team. Stop assuming that people know what’s important or what needs to be done. Get your thoughts out of your head where others can read or hear them.

Push For Clarity
Before you compose your message (or say it out loud), ask yourself, “How can I set the other person up for success?” Before you hit send, reread the communication to be sure it’s clear. Would you know exactly what you meant? Clarity is vital for communication. Sometimes that will mean pushing others for clarity. Remember, they also suffer from the curse of knowledge and may have a tendency to omit information or use ambiguous language. Gently ask them to make their meaning clear.

Confirm Understanding
Communication hasn’t really happened until the other person not only receives your words but also understands them. You can request a “read receipt” when you send a message, but you also need to get an “understand receipt.” You can do that with questions like “Is anything unclear about that?” or “What do you understand based on what I’ve said?”

Over-Communicate
Actually, you can’t over-communicate. Or at least it is pretty hard to do. People are busy and distracted. They forget things they should remember – things they want to remember. Communication is not a one-and-done event. Communicate again. And again.

What would it be like to come to work in a place where you never had to go on a deep dive for the information you need to do your job? How would it change the culture of your office if everyone was clear, direct and intentional in their communication? Why not take responsibility for making that happen and find out?

Last week we discussed five groups of people who should be considered stakeholders in what we do as Vincentians. Here are five additional groups:

• Collaborative Nonprofit Organizations
• Governmental Entities
• The Community At Large
• The Local Bishop (in the case of all Catholic organizations)
• Pastors and Clergy (in the case of any Catholic organization supported by a parish)

Other nonprofit organizations are stakeholders. We all share a com­mon goal to some degree. All nonprofits influence other nonprofit or­ganizations in their community. Especially important are those nonprofits that we partner with. If the Society does something to dam­age its reputation, then those that collaborate with it also may suffer collateral damage.

Every nonprofit needs other nonprofits to accomplish larger projects. With diversity of missions nonprofits can share the overall needs of those served by sharing our strengths with each other. For example, a person may need shelter that is provided by another nonprofit while the same person also needs clothing or food that is available from our Society.

The city, county, state, and federal govern­ments are additional stakeholders. Nonprofits and their volunteers are significant contributors to the support of the responsibilities of all these governmental entities. If federal and state governments did not allow donations to nonprofits to be tax-deductible, much of our work would be impossible to fund. If nonprofit organizations did not exist, it would be left up to the gov­erning bodies to provide necessary services to the public. Government agencies are very interested in what is done, how it is done, and the level of effectiveness and efficiency with which it is accomplished. They are also responsible to ensure that all laws are followed and that services provided do no harm to those who are served.

The entire community is a stakeholder. It has an interest in how those in need are served. The overall community and its image are improved when the disadvantaged are taken care of. The community is then thought of as a better place to live, raise children and experience a better quality of life. Where the care of those in need is provided by nonprof­its, the taxes necessary for broader social services are lessened.

Residents of the community often consider themselves “owners” of our Society. Because the people of the community see our work, some become donors, some volunteer and some know of someone who was served. Most agree with our work and readily identify with what we do even though they may not be directly involved. They may simply know that the Society of St. Vincent de Paul is in their community and helping the poor. That knowledge is im­portant to them.

The finances of the nonprofit corporation are also more important to a wider community than the finances of a for-profit. Everyone who contributes in some way, who receives services, or who simply knows about its work consider themselves an owner or stakeholder. There is a perceived level of stewardship by the community. They expect the nonprofit to be run efficiently and that the money donated or granted to it goes toward intended programs. In fact, many people believe that nonprofit organizations should have plain, inexpensive offices and equipment. To them it is an indication that most of the donations are given to the poor and not to the people running the nonprofit. The people of the community will not tolerate what they consider to be excessive salaries.  In their eyes a nonprofit employee is really a dedicated volunteer and does the work because of a love of the mission and not for a well-paid job. For many employees that is a reality.

In our Society we recognize the need to maximize the amount of our donations that goes directly to those in need. But that maximization cannot come at the expense of our employees who deserve adequate wages. The Society’s Voice of the Poor Committee has developed a policy about a just wage for our employees. That policy has been approved by the National Council Members.

In the case of Catholic organizations, the local Bishop is responsible for all activities related to the Church in his Diocese. Because our Society is in the Diocese at the pleasure of the Bishop, he is a stakeholder. He allows us to be in the parishes because of our close relationship to the Church and the work we do for Christ’s poor. Because the way we operate directly reflects on the Diocese in the eyes of the community, and because our Society also contributes to the spiritual growth of its members and evangelizes by its members’ actions, the Bishop has great interest in what we do. He knows that we assist in fulfilling the Church’s preferential option for the poor. This vital relationship requires regular and close attention. Keeping your Bishop informed about the activities and achievements of your Council should be a high priority.

Pastors and Clergy are stakeholders for reasons similar to those of the Bishop. Our presence in the parish helps the pastor and other clergy serve the poor and relieves the parish burden of responding to the needs of people coming to the Church for assistance. Always keep in mind that St. Vincent de Paul serves in the parish with the pastor’s permission.

(The source of this article is Governance: Council and Board, the original version of which was authored by former National Vice President Terry Wilson.)

*(Excerpted from Vincentian Life: Conference)

IRS Form 990

The IRS requires all nonprofits to submit a Form 990 describing their financials and works at the end of their fiscal year. The IRS gives our Councils and Conferences until February 15 of the following year to submit this report. However, not all Conferences are required to submit it.

Only those Conferences that have their own EIN need to submit this report. For all Conferences that have been allowed to use their Council’s EIN, the Council (District or Diocesan) will submit a consolidated 990 to the IRS which includes the Conference information. (Additional information about submitting Form 990 tax returns appears at the end of this article.)

Guidelines

The Conference guidelines for service should be reviewed each year during October and/or November to ensure that they reflect current conditions. This is the time that changes in the guidelines should be considered. However, the guidelines are the work of the Conference members and they may change them at any time. There is nothing magic about this time of year. A regular review is good practice.

Audit

This is the time of year recommended for all Conferences to have an annual audit. This is an informal audit and may be done by two or three members of the Conference, but not by those responsible for accounting or disbursing funds. The purpose of the audit is not to find fault. Its purpose is to assure the members of the Conference that all proper procedures are being followed and all the funds of the Conference have been reconciled on a regular basis. It is recommended that an audit take place when a new President takes office.

The National Council website has a sample audit procedure on the Growth & Revitalization page under Conference Officer Training.

Recordkeeping

In the Manual of the Society, there is a list of the various types of documents and records that the Conferences typically deal with. Some are kept permanently. Some are kept for seven years and then destroyed. Some are kept for three years and then destroyed. Some are kept for one year.

The beginning of the fiscal year is the time for the Secretary and Treasurer to review their records and do what is appropriate with each type of document.

Summary

The beginning of the fiscal year is a time to ensure that everything related to last year has been properly reviewed and reported. It is also time for records to be properly stored. This is a time when Conference members should have every assurance that they are moving into the new fiscal year in good form.

Form 990 Tax Returns

Tax-exempt organizations, such as the Society of St. Vincent de Paul, which operate with a 501(c)(3) status are obligated to report their activities to the Internal Revenue Service on an annual basis. This reporting is done on a Form 990, Return of Organization Exempt From Income Tax. The form is intended to give the government and public a picture of the organization’s activities each year. Some donors rely on Form 990 as their primary or sole source of information about a particular organization when selecting charities to support.

Form 990 includes information about the organization’s finances, governance, and compliance with certain federal tax filings and requirements, as well as compensation paid to the highest-earning employees. Additional schedules may be required depending upon the entity.

Generally, subsidiary Conferences that are using the Council’s EIN can rely upon the Council to submit a Form 990 to the IRS if they provide their information to the Council. A Conference whose tax exemption is covered under a Council’s group ruling must annually submit a Form 990 for their individual EIN. The Form 990 is due on the 15^th day of the 5^th month following the end of the organization’s taxable year. Most Councils end their fiscal year on September 30. These Councils should file their tax return by February 15.

There are two alternate versions of Form 990:

• Some Councils may be eligible to complete a simplified Form 990-EZ, Short Form Return of Organization Exempt From Income Tax. Criteria include gross receipts of less than $200,000 and total assets less than $500,000 at the end of the tax year. The short form is also open to public inspection.
• Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ, applies to small tax-exempt organizations with annual gross receipts of $50,000 or less. Councils and Conferences that are included in a group return may not use this form. Furthermore, it is important to note that the 990-N must be completed and filed electronically. There is no paper form.

Conference and Councils are encouraged to seek professional advice by hiring an accounting firm or Certified Public Accountant familiar with nonprofit taxes to review the organization’s finances in order to produce audited financial statements and the Form 990 tax return.  Accounting firms will typically complete Form 990 on behalf of the organization, ask leadership to review the documents and file on your behalf.

Within the documents of the Society of St. Vincent de Paul, there are found a number of instances where hoarding is prohibited. Please look at the Appendix to this document to see those specific references. Unfortunately, there is no specific place in the SVdP documents where the word hoarding is actually defined. There have been many times over the years that the National Office has been called to give a definition so our members can have a better understanding of the prohibition. The explanation was given a number of times in the Q&A section of the National Council’s Frederic’s e-Gazette. However, it has been deemed appropriate by the National Governance Committee to give a formal definition.

Webster’s New Collegiate Dictionary defines hoarding as “to collect and lay-up, amass and conceal.” The considerations related to hoarding within the Society of St. Vincent de Paul, however, are slightly different when looking at this from a Conference perspective and a Council perspective. We will treat each separately.

(For Frederic’s e-Gazette readers:  Part One addressed Conference considerations. Part Two deals with Council considerations.)

Council Considerations

TYPES OF FUNDING HELD BY COUNCILS

The first thing to keep in mind is that Councils do not do direct assistance. The primary purpose of the Council is to support the work of the Conferences. On the Council annual report, there is no designation for direct assistance. So, typically, the funds raised by the Council are for something other than direct assistance. The primary concern for hoarding is the decision to bank funds rather than give assistance to those in need.

Not all Councils have Special Works that provide direct assistance. Usually when they do, they have designated fundraising to support those Special Works. If a Council receives donations intended for direct assistance and they have no Special Works, then they should be distributing those funds in one fashion or another to the Conferences; if they do not, then that is hoarding.

The next consideration before answering the question “What is Hoarding?” is to understand the different types of funds that Councils may hold.

6. General Donations: These funds are received from the Conferences, the public, other SVdP entities, general fundraising efforts of the Council, benefactors, general bequests, memorials, and organizations. There is no specific intent associated with these funds other than the assumption that the funds will be used for the purposes of the Society to support the work of the Conferences and better serve those in need. These funds are held in checking accounts, savings accounts, money market accounts, CDs, and other financial instruments that are essentially considered to be liquid (easily accessible). A few comments must be made related to the fundraising efforts by Councils. Special care must be given to the way fundraising appeals are made. Sometimes, a Council will create an appeal that looks to the donor as if the donation will be used for direct assistance to those in need when the actual intent of the Council was for the funds collected to be used for other purposes. If the implication from the appeal is different from the actual intent of the Council, then the appeal must be clarified. These funds can be susceptible to hoarding.      
7. Donor-designated Funds: These funds are received from a donor (individual or organization) that identifies a specific purpose for the use of those funds. For example, an individual gives a check to a Council and on the line preceded by the word “for” the donor has specified “utility payments.” Another example is a check from a donor that is accompanied by a note or letter that designates the donation for a particular purpose. If the Council accepts the check, it accepts the responsibility to track those funds and only use those funds for utility payments. The funds cannot be used for any other purpose. In this case, if the Council has a Special Work that provides utility payments for those in need, then the Council must use the funds in that Special Work. If it does not, the funds can also be distributed to the Conferences to help make utility payments. Another example would be a Council receiving a check from ABC Organization for $10,000 to be used for rental assistance. If the check is accepted, the Council must hold those funds in reserve and only use those funds for rental assistance. The Council would do so in a similar way to that described for utility payments. The Council can also distribute the funds to the Conferences and the Conferences have a legal obligation to ensure the funds are not used for any other purpose. These funds must be used for the purpose given.  When not used for the purpose intended, these funds may also be considered as hoarding.
8. Funds from Grants: These funds, for the most part, are similar to Donor-designated Funds. They are usually given for a specific purpose and that purpose must be honored. These funds must be used for the purpose given and are not susceptible to hoarding. However, sometimes, but rarely, grant funds are issued for general use by the Council. In this case the funds are treated the same as general donations. These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.
9. Capital Campaigns/Endowments/Disaster Relief: Capital campaigns are normally established to purchase land, buildings, special equipment, or fund special programs. Endowments may be established to provide special programs or services with ongoing income. Disaster relief funds are normally established to provide relief to people suffering from a recent disaster in the area. The key thing about these funds is that donors contribute to them for their specific purpose. These funds are collected for a specific purpose and can only be used for that purpose. These are treated the same as Donor-designated Funds. These funds must be used for the purpose given.  When not used for the purpose intended, these funds may also be considered as hoarding.
10. Interest Earned/Investment Income: If funds are placed in financial instruments that gain interest or in an investment account that generates income, there are two options available:
    1. If the donor requires it, the interest earned/investment income on his/her donation must be used for the purpose of the fund for which it was originally designated.
    2. Otherwise, if the allocation of interest creates an unnecessary burden there is no legal requirement for the interest earned/investment income to be restricted for any purpose and may be used as the Council determines. It may create an unnecessary burden to try to allocate the interest to specific funds.
       All interest earned/investment income that is for general use is not susceptible to hoarding (see #1 – General Donations, under Council Considerations). All interest earned/investment income designated for direct assistance to those in need is susceptible to hoarding, if not used for the purpose intended. 
11. Council-designated Funds: There are times when the Council takes a certain amount out of the general fund and sets it aside for a particular purpose. Those funds will remain in the designated area until the Council decides to use them for another purpose.  These Council-designated funds may be changed from one purpose to another as often as the Council decides. An example of this is a Council budget, where funds are designated to be spent for a fundraising dinner. The budget designations may be realigned at any time by the Council. These funds, having originated in the general fund, are not susceptible to hoarding.
12. Council Reserve Accounts: Councils sometimes have fixed expenses. For these, the Manual’s recommendation is to maintain a balance for the future of up to six months of expenses. Councils, like Conferences should not seek financial security by building up excessive balances for future needs. There may be needs for capital campaigns, endowments, and disaster relief, but those are addressed in number 4 above. So, unless a Council has some fixed expenses, there is no need for a reserve account. Surplus funds should be shared generously with needy Conferences or Special Works of other Councils. The “balance for the future” and/or the reserve account may be susceptible to hoarding.
13. Special Works Reserve Accounts: Stores and other Special Works that may be operated by a Council may legitimately have fixed expenses. The recommendation from the Manual is to maintain a balance for the future of up to six months of expenses. This balance for the future or reserve account should be maintained at such a reasonable and necessary level as the Council or the Board of Directors determines is needed to assure the financial stability of the Special Work. Surplus funds should be shared generously with more needy Conferences or Special Works of the Councils. There may be needs for capital campaigns and endowments but those are addressed in number 4 above. The “balance for the future” and/or the reserve account may be susceptible to hoarding.

So, it boils down to two types of funds that are held by the Council: those that are susceptible to hoarding and those that are not. Those funds that are designated for a particular purpose must be honored (by law) for that purpose. Our concern in this document is to define hoarding, so let us recap which funds are susceptible to hoarding:

1. All funds designated for direct assistance to those in need (normally in Special Works);
2. Grant funds designated for general use for direct assistance to those in need;
3. Council Funds designated for direct assistance to those in need.

REFLECTIONS ON HOARDING RELATED TO COUNCILS

Regardless of the source of its income, a Council needs to start by asking if and why it is amassing funds. The following are guidelines and principals that should govern the use and accumulation of funds by Councils:

• If the Council operates a Special Work, then it should consider having a reserve to operate that Special Work based on the expenses normally incurred over a period of time designated by the Council Board.
• If the Council has employees or fixed expenses such as rent and utilities, then it should consider having a reserve to cover the expenses normally incurred over a period of time designated by the Council Board.
• The Council should, as part of its annual budgeting process, set aside funds to share with those Conferences that have inadequate funds to meet the needs which they face to help people in need.

Hoarding occurs when a Council decides to keep funds in its financial instrument instead of using the funds as they were originally defined or to advance the purposes of the Society.

The fact is that once the Council in its Special Works decides that the request for direct assistance is legitimate and it has the resources to fulfill the request, then deciding to keep the money in the bank is the wrong decision.

There are Councils that do not have Special Works who use their funds to support the Conferences: training materials, running Ozanam Orientations or other workshops, holding days of recollection for spiritual growth, sending members to regional and national meetings, etc.   This spending fulfills the purpose of the Council and is not susceptible to hoarding unless the Council simply sits on the money.

It is wrong for a Council to decide to NOT use funds for the purpose for which they were donated. There are certain circumstances that may occur that would prevent a Council from using funds accumulated for a specific purpose. An example of this is the case of a Council collecting funds for a particular disaster in its area. If, after a period of time, funds are no longer needed to address the effects of the disaster, but the Council still has funds on hand, there are three ways to resolve the unused designated funds:

1. The remaining funds may be returned to donors;
2. The donors may be contacted to re-designate the use of those funds; or
3. If it is not practical to contact donors, State laws vary and local legal counsel should be sought before taking action; but generally, UPMIFA (Uniform Prudent Management of Institutional Funds Act) requires the nonprofit to provide written notice to the Attorney General of the State and wait 60-90 days, and then only if the restriction is deemed:
   1. Unlawful, impractical, impossible to achieve, wasteful,
   2. The amount is less than the amount defined by the State,
   3. The fund is more than 20 years old, and
   4. The charity uses the fund in a way that is consistent with the charitable purpose of the donor restriction.

Other releases of restrictions will require a Court Petition.

STEPS TO BE TAKEN WHERE A COUNCIL HAS ACCUMULATED EXCESS FUNDS

Here are some examples of things Councils may do if they have accumulated excess funds:

• The Council should set aside funds to share with those conferences that have inadequate funds to meet the needs which they face to help people in need.
• A Council can reflect and discern on whether they ought to direct additional funding, towards achieving various goals set forth in “Standards of Excellence Questions for Diocesan Councils.”
• If a Council has additional funds, then it should look for ways to help the Society and its members through the Disaster Services Corporation, International Twinning, domestic twinning with Councils in need of financial help.
• Reviewing its programs and considering the need for starting new non-income producing Special Works such as through an evening or lunch meal program, a Coming Together to Getting Ahead program, or the like.

Appendix: Hoarding in SVdP Documents

In the Rule, Part I, Article 3.14:

Nevertheless, the Society uses money and property to help relieve the suffering of those in need. The Society’s funds must be handled with the utmost care, prudence, and generosity. Money must not be hoarded. Decisions regarding the use of money and property are to be made after reflection in the light of the Gospel and Vincentian principles. Accurate records must be kept of all money received or spent. The Society may not allot funds to other organizations, except occasionally for other branches of the Vincentian Family, save under exceptional circumstances.

In the Rule, Part III, Statute 24:

Councils and Conferences zealously manage and maintain the Society’s assets. The authority to manage the Society’s assets remains exclusively with Councils that may delegate this authority in accordance with the Rule of the Society and the Bylaws and Resolutions of the National Council.

Faithful to the spirit of non-accumulation of wealth, the next higher Council may determine annually the percentage of the funds of each Council or Conference within their area that may be made available to them. The next higher Council will work with the Council or Conference to determine an appropriate reserve for unanticipated events and direct the allocation of funds which exceed the anticipated demands, which may not be hoarded as a capital sum, to the service of the poor in their own area or abroad in the poorest areas of the world.

In Manual, under Council funds:

Sources of Council funds may include contributions from Conferences, donations, bequests, Special Works, and grants. Like Conferences, Councils act as custodians of funds given to the Society, understanding that they belong, ultimately, to the poor. While some Councils prefer not to accumulate funds, others make a point of setting something aside for exigencies. Operating an active Council with a reasonable bank balance is good business practice, not hoarding. A bank balance equal to the operational cost of the Council for six months may be reasonable. A balance of less than three months’ operational cost may be unhealthy. Councils with inadequate balances should review the budget for ways to increase their income or reduce their expenditures. Councils with overly large balances should find ways to expend their excess funds on behalf of the poor, such as subsidizing active Conferences in poorer areas or planning needed Special Works.

In Manual, under Funds of the Conference:

It is wrong for a conference to seek financial security by building up a large balance for the needs of the future. Conference balances generally should not exceed what they expect to spend during an average quarter. Surplus funds should be shared generously with more needy Conferences or the Special Works of the District Council.

In Bylaws, Document 1 for Conferences Without a Board of Directors, Article 16:

Conferences and Councils zealously manage and maintain the Society’s assets. The authority to manage the Society’s assets remains exclusively with Councils that may delegate this authority in accordance with the Rule of the Society. Faithful to the spirit of non-accumulation of wealth the Upper Councils may determine annually the percentage of the funds of each Conference within their area that may be made available to them. The Upper Councils will work with the Conference to determine an appropriate reserve for unanticipated events and direct the allocation of funds which exceed the anticipated demands, which may not be hoarded as a capital sum, to the service of the poor in their own area or abroad in the poorest areas of the world.

In the Conference Audit Manual, under Bank Account:

Every Conference is required to maintain its bank account(s) separate from the parish and separate from the personal accounts of any of the members. There shall be no co-mingled funds.  The funds of the Conference must be in standalone accounts not tied to the parish or any of the members. The only exception to this is when a Conference has an approved reserve account. To avoid any perception of hoarding, the reserve accounts should be approved by the next upper Council. The funds in the reserve may be combined into a shared investment account as long as the Conference has sole access to its funds.

In Resolution 114:

Be it resolved that legal issues which involve one Council or one Conference have the potential for affecting the whole Society and therefore if not addressed will lead to the suspension and removal from the Society of the offending Vincentian, Conference or Council if not corrected in a timely fashion.  Such legal issues include but are not limited to the following:

• Violation of any state statute, local ordinance, or federal law or any regulations adopted by any state, local government, or federal agency which violation relates to the operation of not-for-profit organizations.
• Failing to conduct an annual audit.
• Failing to file a Federal Form 990 or any required state form.
• Adopting Bylaws that have not been updated to comply with federal requirements
• Giving funds to non-Vincentian organizations or for non-Vincentian activity.
• Failing to submit required annual reports
• Failing to allow women or minorities as Conference members
• Maintaining large balances that do not constitute legitimate reserve for future operations and which constitute hoarding,
• Failing to enact Bylaws that are in compliance with those approved by National Council
• Failing to make home or similar visits in pairs – i.e., allowing only one Vincentian to make such visits
• Having officers who are not active members of the Society
• Limiting assistance to certain groups to the exclusion of others
• Acting in an autonomous manner and as though not answerable to the Society
• Changing Bylaws to permit activity contrary to The Rule of the Society
• Removing members without complying with The Rule of the Society
• Violating confidentiality of those being served
• The failure of National Council Members to attend National meetings
• Raising funds across Council boundaries without permission and without adequate disclosure to the public
• Any other issues having legal implications.