Is Becoming A Nonprofit A Good Idea For Our Club?
by Michele Colony
Beekeeping Clubs and Associations have developmental stages, just like our honey bees. Growth can go smoothly, be stifled, ignored, and suppressed. As with any group dynamic, nonprofits are subject to the individual personal agendas of the founders, or Board members of any nonprofit. Due to inquiries from beekeeping groups and individual beekeepers the Pollinator Stewardship Council is working with local and state bee groups helping them answer the question “to be or not to be a nonprofit bee club or association.” The October 30, 2015 issue of our Pollinator News listed the pros and cons of becoming a nonprofit.
Pros for you and your club/association:
•Club/association can apply for grant funding for projects
•Liability of club activities protects the Board members when Directors and Officers insurance is purchased
•Allows you to hold fundraisers, etc. with less tax responsibilities.
•A state beekeeping association can act as the main nonprofit for its member clubs (see group exemptions), saving the many small clubs in a state the paperwork of being a nonprofit by themselves.
Cons to you and your club/association:
•Grant funded projects require attention to the grant contract, compiling reports, and managing the grant funds
•Directors and Officers liability insurance can be an annual cost of $1500+
•Not a registered nonprofit, and funds raised may have tax responsibilities.
Responsibilities of you and your club/association:
•The Treasurer and President are responsible for filing the necessary annual reports to maintain nonprofit status.
•Policies and procedures need to be developed to manage the grant funds, and grant funded projects.
•Grant funded projects and their accompanying application, reports, and accounting records can be public record (depending on the funding source), and the grant contract language.
Nonprofit organizations are living entities. All Board members must set-aside their personal agendas to give life to the mission of the nonprofit. The mission of the nonprofit is the raison d’etre of the nonprofit, and all actions, programs, and services of the nonprofit are driven by the mission. The mission defines “why” the nonprofit exists. Key to supporting the mission is understanding the developmental stages of nonprofit organizations. No small business, no nonprofit begins as a fully staffed, fully funded, fully supplied entity in its first year. Nonprofits have typical growth stages, based on levels of involvement of volunteers, professional staff, fundraising, and program development. It is the “duty of care” of board members to be able to “adjust to meet and support the organization’s needs as they change.”1 “Nonprofit boards typically go through four stages of development.”2 A variety of terms are used, but readily understood developmental stages are:
1)The Coveralls Stage (foundation building)
2)The Shirtsleeves Stage (working board)
3)The Blue Suit Stage (managerial)
4)The Black Tie Stage (governing)
This chart from the Enterprise Foundation’s Community Development Library provides a visual analysis of the varying growth stages of nonprofits.
Understanding of the growth of a nonprofit is also important in determining whether to become a nonprofit. Some founders of nonprofits, simply want the organization to end when they retire, so growth is limited based on the personal goals of the founder. When a bee club is begun it is because like-minded beekeepers have come together for common interests and purpose. When thinking of the future of a nonprofit, it is important to consider long-range strategic planning as it relates to the growth stages of the organization. At the Coveralls Stage and Shirtsleeve Stage long-range planning is key to legitimize the leader’s ideas, to share leadership, and in raising funds for the nonprofit. The Blue Suit and Black Tie Stages must strategically plan to resolve “growth, directional issues, and internal challenges;”3 as well as, most importantly, to measure success in and by the nonprofit.
The Coveralls Stage is when the nonprofit begins, and the board creates a viable nonprofit. By Laws are created, incorporation documents are filed, tax exempt status is filed, bank accounts set-up, and information management systems created. The Board runs the day-to-day operations of the organization. These founding board members raise money to support the organization. By now the Board is exhausted, and desires to transition to the Shirtsleeves Stage. The Board may still be running the day-to-day operations, but seeks an Executive Director to take on the management of the nonprofit. The Board establishes clear lines of authority through a job description for the Executive Director. Any other staff positions hired prior to an Executive Director will stifle the growth of a nonprofit. Boards will often get stuck in their Coveralls Stage, not willing to give up authority, due to lack of strategic planning and vision, and simply hire a staff person to act as “glorified secretary,” who will be hampered by having no clear authority or strategic plan to drive the mission forward.
If the Board, often founders of the nonprofit, has accomplished their long-range planning, they will transition to the Blue Suit Stage, hiring professional staff to administer and implement the programs of the nonprofit. At this stage “the budget is growing, and the staff needs the board to think about the future and help raise money.”4 However, often the board is not ready to “exchange their “doer” hats for their “overseer” hats.”5 This is where it is important for Board and staff roles to be clearly defined. It is the role of the Board and staff to raise funds for the nonprofit.
Once the board has finally let go of the day-to-day activities of the nonprofit, then the professional staff can finally attend to the operations of the organization. Now the board must “think and plan more broadly and strategically.” 6 This is the Black Tie Stage of nonprofit development wherein the board has:
•clarified board and staff roles and responsibilities
•has hired competent management and provided the resources for staff and operations
•provides the governance for the nonprofit – policy-making, strategic planning and evaluation.
•shares the fundraising with the staff, and “understands their respective roles and responsibilities.”7
When a nonprofit organization gets stuck at one stage for years, even decades, the organization may not be growing, and will be unable to meet the challenges of its mission, membership, or industry. All-volunteer nonprofits at the local level are typical. State Associations, Regional Associations, and certainly national associations will struggle to maintain themselves as all-volunteer for too long. Board roles become defined by personalities. By Laws written once are never reviewed, updated, revised, or clarified, and cannot support new technology, new demographics, new economies, etc.
Similar to the growth of a hive, nonprofit beekeeping organizations must have leaders who understand the mission of the nonprofit, work with others to ensure success of the mission, strive for growth, plan for a dearth, welcome new life into the organization, and sometimes cope with a growing mission or the organization “swarms” in order to meet new needs.
For questions about becoming a nonprofit contact the Pollinator Stewardship Council at 832.727.9492 or email@example.com or contact your State Nonprofit Council.
1“Enterprise Foundation’s Community Development Library,” The Enterprise Foundation, Inc., pg. 13
3Ibid, pg. 28
4Ibid, pg. 15
6Ibid, pg. 16
Michele Colopy is the Program Director for the Pollinator Stewardship Council. She holds a Master’s degree in Arts Administration/Nonprofit Management from The University of Akron, and has created, revitalized and held leadership roles in nonprofit organizations for 20 years.