Hey There Director

At the nonprofit governance seminar I presented with fellow EO attorney Cherie Evans at the Bar Association of San Francisco, we had the treat of hearing Sheila Warren, another EO attorney and lead singer of Stimulus Package, sing my parody Hey There Director, summarizing our seminar.  Due to popular request (all 3 of you), I am including the lyrics on this post.

Hey there Director

Don't you worry about your duties

Act in good faith and due care and

in the charity's best interests*

Delegate**

Listen to your head, it's common sense

Substantiate***

*Cal Corp Code 5231(a)
** Corp Code 5210
*** Provide oversight of uses of delegated authority

Hey there Director

Do you review the financials?

You're an unpaid volunteer

But hey, you've got to be respons'ble

Yes you do

The IRS will be on you*

The AG too**

* For violations of federal tax laws (e.g., failure to pay payroll taxes)
** For violations of state laws (e.g., breach of fiduciary duties)

Oh it's new Form 990

There are policies you need

Compensate reasonably*

Manage conflicts 'ppropriately**

Accept gifts caref'lly***

* Executive compensation policy
** Conflict of interest policy
*** Gift acceptance policy

Hey there Director

I know that this can be quite hard

Accountability is key and

Public trust is what you guard

Transparency*

No secrets in our neighborhood

Make your word good

* One of three guiding principles for the new Form 990

Hey there Director

I've got so much left to say

'Cause to understand 501(c)(3)

Is why you’re here today

You must comply

No private benefit at all*

Or you will fall**

* Treas. Reg. 1.501(c)(3)-1(d)(i)(ii)
** E.g., intermediate sanctions under IRC 4958

Oh it's new Form 990

There are policies you need

Protect whistlers who see*

Destroy docs appropriately**

* Whistleblower policy
** Document retention/destruction policy

Excess benefit transactions*

Will get you no satisfaction

Intermediate sanctions come to play

The papers will make fun of you

So listen close because we know

Rebuttable presumption's the way**

Director I can't promise you

That comparables will get you through

But concurrently document the same

Or you're to blame

* IRC 4958
** Treas. Reg. 53-4958(6)

Hey there Director

Try to attend all your meetings

D&O will help you mitigate*

Risks of liability to you

Indemnification helps too**

Use diligence in all that you do

Hey there Director here's to you

This one's for you

* Directors and officers insurance
** Provisions typically found in the bylaws

Oh it's new Form 990*

It's for everyone to see**

IRS claims it will be

Key to strength'ning charities

Strength'ning charities

* Redesigned for the first time since 1979
** Charities must make Form 990 available to the public