From The Chronicle of Philanthropy State Watch blog:
My experience thus far with nonprofit organizations has been such that I usually assume nonprofit board members are volunteers. According to a highly relevant 2006 study published by The Center for Association Leadership (ASAE), this is not an uncommon assumption. The study concludes with reasons for and against board pay, and the first reason on the list against compensating is, "Board members are thought of as volunteers." Therefore, I can see how learning that some individual board members are making five figures would be surprising and likely off-putting for many.
I'm not sure creating a law that could adversely affect more organizations than it corrects is a good precedent to set for other states. In an age of increased transparency among nonprofit and not-for-profit agencies, public attention to board pay may be enough to keep it reasonable. For instance, due to the recent attention in Massachusetts on these board practices, two of the nonprofit health insurers in question suspended board pay. But maybe that's just me being optimistic.
What has been your experience with nonprofit board pay? Do you pay your board members? Do you think pay helps with engagement and representativeness? Or, do you think board members should volunteer only? Is paying board members a conflict of interest if under Sarbanes-Oxley?
The measure arose from a proposal backed by Martha Coakley, the Massachusetts attorney general, that followed a public outcry over five-figure stipends for directors of the state’s four nonprofit health insurers, two of which voluntarily suspended board compensation.The proposal is not attempting to do away with all nonprofit board pay, but the limits on pay will affecting a wider scope of organizations than just those paying individual board members five figure salaries. As an alternative, organizations will be able to apply for exemptions to the pay limits with the state attorney general, but the proposal is still causing a great deal of concern among organizations that may be affected. As described in the posting, some agencies are concerned over maintaining board diversity, socio-economic representation, and engagement if there are limits on pay:
“A number of our trustees come from the nonprofit sector, including grass-roots groups, and immigrant communities and low-income communities. It might affect our ability to attract some people if they really need to make a tradeoff in terms of their own income and lives.” Ms. Smith said.A contrasting view is that nonprofit board members should all be volunteers. Some are of the opinion that board members should be motivated by mission; that paying a salary draws on a lesser motivation, and may cause or give the appearance of conflict of interest. A video podcast from TheNonProfitTimes briefly addresses the viewpoint that board members should be volunteers:
My experience thus far with nonprofit organizations has been such that I usually assume nonprofit board members are volunteers. According to a highly relevant 2006 study published by The Center for Association Leadership (ASAE), this is not an uncommon assumption. The study concludes with reasons for and against board pay, and the first reason on the list against compensating is, "Board members are thought of as volunteers." Therefore, I can see how learning that some individual board members are making five figures would be surprising and likely off-putting for many.
I'm not sure creating a law that could adversely affect more organizations than it corrects is a good precedent to set for other states. In an age of increased transparency among nonprofit and not-for-profit agencies, public attention to board pay may be enough to keep it reasonable. For instance, due to the recent attention in Massachusetts on these board practices, two of the nonprofit health insurers in question suspended board pay. But maybe that's just me being optimistic.
What has been your experience with nonprofit board pay? Do you pay your board members? Do you think pay helps with engagement and representativeness? Or, do you think board members should volunteer only? Is paying board members a conflict of interest if under Sarbanes-Oxley?
No comments:
Post a Comment