How To Begin Developing An Organization Run BY People With Disabilities

FOR People With Disabilities

People with disabilities all over the country have started both informal and formal groups and organizations that are run BY people with disabilities FOR people with disabilities. The presentation you just heard from the P.A.D.S. panel is just one example of many. What are some key things to know about developing this type of group or organization?

All of the groups here today at this conference have obviously already organized an informal group of individuals with disabilities who have come together for various reasons, depending on the group. Here are a few examples of informal groups that can form:

  • Social groups – folks come together to socialize with each other. The group may plan specific activities to do together, such as attend a movie or an outdoor music concert, or have a picnic.
  • Support groups – folks come together to support each other in terms of living with a disability.
  • Activism groups – folks come together to work on one or more issues that affect people with disabilities in order to try and make changes where there are problems. This can include advocacy with Legislators, the Governor, or other policy makers to influence changes that will be beneficial to people with disabilities. It could also include things like advocating with local business, the city, public transit, or other entities to get accessibility in place where it does not exist.
  • Educational groups – folks come together to develop educational programs to educate the general public on disability and disability issues.
  • Business groups – folks come together to develop a business that will provide services to people with disabilities, such as a Center for Independent Living.

Some of theseexamples could be combined. For example, a group could provide education to the general public as well as be an advocacy group. Another example would be a social group that was also a support group. The members of the group must decide if they want to remain as an informal group, or if they want to expand to make their group a more formal organization.

What kind of group do you currently have? Do you want it to remain as an informal group, and if so are you looking at how to make the group larger to get more folks involved, or how to fundraise for activities? Do you want to develop your group further into an organization, which may involve appointing a Board, electing officers, applying for non-profit status, and doing fundraising?

Can each of the groups represented here today please tell us a little about your group and what you are looking to do with your group?

DISCUSSION by groups present.

Many of you have shared with us, either in today’s session or in the survey you sent to PADS before the Summit, some information about the struggles and challenges you’ve faced in trying to build your organizations. Centers for Independent Living have faced a lot of the same questions and problems. For example:

  • How can we attract more members?
  • How can we do anything if we don’t have any money?
  • How can we get more people to our meetings when they don’t have transportation?
  • How can we get our community to understand and respect people with disabilities?
  • We don’t know enough about what’s going on. How can we find out, so we can be better advocates?
  • How can we make sure our organization survives for a long time?

From P.A.D.S. you’ve learned today that:

  • Just a few people can make a big difference, if they care enough and work hard enough…SO:
  • Don’t start thinking in circles—“We can’t do anything unless we have more people join us, and people don’t want to join us because we don’t do anything.
  • If you don’t do anything, the community is less likely to “see” you, get to know you and your issues, and come to respect you.
  • Having a clear sense of purpose, A PURPOSE ON WHICH ALL YOUR MEMBERS AGREE and then acting on it will attract new members.
  • You don’t have to have much money to get things done.
  • You DO have to be willing to get outside your comfort zone.
  • As you heard many times just now, finding partners to work with in your community really helps you get a lot further than if you work on your own. Sometimes they can help with money or volunteer their time on your projects.
  • Local partners and even people at the state level, like the DD Council, are often glad to come and talk to you about issues and how to advocate.
  • From the very beginning P.A.D.S. put any resources that it did have into providing transportation for its members to P.A.D.S. functions or to activities important to P.A.D.S., like going to City Council meetings.

Let’s do an overview of some important things that groups need to know about group or organization plan development, fundraising, Board development, applying to be a non-profit, and fiscal and programmatic accountability.

Group or Organization Plan Development

  • Regardless of the size of your group or organization, or what you plan to do, it is always good to develop a plan at least once a year for what you want to do and accomplish over the upcoming year.
  • Plans can be as simple as a list of activities you want to do, the dates and times you want to do them, an itemized budget for what the cost will be for each activity, and a plan for how you will fund the activities if money is needed.
  • For larger organizations, you may want to consider developing a mission statement along with a 1-3 year strategic plan of what goals you want to accomplish and the action steps you need to take to accomplish the goals. This will also need to include an itemized budget for the costs of what you plan to do, and a fundraising plan for how you will get the funding to accomplish the plan.

Fundraising

  • You need to first develop a list of what you want to do, and if it costs money, how will you fund it?
  • Depending on what you identify you want to do, you may need to develop an itemized budget to figure out what you will need for the activity and how much it will cost.
  • Sometimes members can contribute a small amount of money, say perhaps $5.00, that can be pooled so the group can purchase perhaps hamburger meat, buns, ketchup, mustard, chips, drinks, and cookies along with charcoal for the grill, to have a picnic.
  • Building relationships in your community is KEY! If groups want to provide educational programs to the general public on disability and disability issues, they may be able to approach a local grocery store to get an in-kind donation of drinks and perhaps cookies to serve at the presentation. BUT you first need to pull together a presentation that a member of your group can use with the management at the grocery store to let them know what your group is about, what you are trying to do, and why you are asking them for this type of in-kind donation. Groups may also consider approaching churches in their area who may be willing to donate some funds for the refreshments, or who may have volunteers willing to provide refreshments for this kind of a public educational meeting. Again, you need to develop a presentation for these folks so they know what you are doing and why it is important to the community. Depending on the topic of the educational presentation, many local non-profits who have expertise on the issue will most likely be willing to provide a staff person as a presenter free of charge to the group.
  • For those groups who want to develop into a formal organization, I will talk more about fundraising for more formal organizations in the next area of Board development.

Board Development

  • Your group needs to decide if it wants to become a more formal organization, and if so, you most likely will want to develop a Board of Directors.
  • You will need to decide how many Board Members you want. For example, can all members be Board Members?
  • You will need to hold an election of Officers from the Board membership: President, Vice President, Secretary, Treasurer.
  • Develop job descriptions for Board Members and for each Officer position.
  • Develop mission statement-what is the mission of the organization?
  • Develop By-Laws (you will need these if you plan to become a non-profit)
  • Develop policies and procedures, including procedures for how you will be fiscally accountable with the funding you receive as well as programmatically responsible in how you operate any programs you plan to do
  • Develop a strategic plan, 1-3 years, with goals for what you want to do and how you will accomplish what you want to do (action steps)
  • Develop a draft budget for what funding or in-kind donations you need to accomplish your strategic plan
  • Develop a fundraising/grant writing plan for how you will raise money and/or get in-kind donations to fund the activities you have identified in your strategic plan.

Applying to be a Non-Profit 501(c)3

  • Getting a 501(c)3 non-profit status is KEY if you plan to write for grants to foundations, corporations, other non-profits, or the federal or state government. It can also sometimes be needed even when applying to local grocery stores or churches to help you out with either in-kind or cash donations.
  • If your group is interested in becoming a non-profit, please let us know as we can provide assistance to you with this process.
  • It is important to note that it may cost around $750 for the application to become a non-profit, so you will need to do some fundraising to come up with this.

Fiscal and Programmatic Accountability

  • Once you become a non-profit, and start fundraising and receiving funding, it is critical that you have appropriate policies and tracking tools in place so that you can account for all money received and how all money is spent.
  • This includes having receipts on file for every single item or service purchased, including even a $2.30 receipt for a bag of ice for the cooler when you provide drinks at a meeting.
  • If you are providing a program or a service, you must have documentation of what you are providing, when, where, and so forth so that you can report out to your funding source on what you accomplished with the use of the funding.
  • If you need training on the specifics of fiscal and programmatic accountability, please let us know so we can help find a way to provide that to you.

Helping Your Organization Stay Strong For A Long Time

Here are some things to think about:

  • There’s no substitute for passion and persistence. When people don’t care anymore, the organization doesn’t last. Keep the fire burning!
  • If you want to work on larger projects that take funding, remember that grants and donations usually go to tax-exempt nonprofit organizations. People like to be able to count their donation as a deduction on their tax return.
  • You can use this provision in the tax code in two ways, and I’ll talk briefly about both. You can work out a deal with another nonprofit to accept grants and donations on your behalf, or you can become a nonprofit corporation yourself.
  • The first way is easier: working with a friendly local nonprofit corporation on grant applications, with your local partner serving as the fiscal agent for your grant. This is what P.A.D.S. did for years, before it had incorporated and obtained its nonprofit status from the Internal Revenue Service. To be a fiscal agent means that the local partner you’re working with receives the grant on your behalf and takes full responsibility for making sure the money is handled properly. But the money is available to YOU to work on YOUR project. Sometimes the fiscal agent gets a small fee out of the grant, to cover the costs of things like the bookkeeper who is keeping track of the money. That’s something you and your partner organization have to work out.
  • Becoming a nonprofit corporation changes everything. It’s a very serious step, and you and other members take on a lot of responsibility. Here are the steps:
  1. Get a copy of a standard set of articles of incorporation to use as a model. The articles will be filed with the Iowa Secretary of State.
  1. Choose a “founding board of directors.” It can be a very small board. The names of these people and their addresses are put into the articles, along with some basic information such as your organization’s purpose. The purpose has to be “charitable” as defined in the law. The purpose might be, for example, “to work for improvements in the lives of people with disabilities in __X___County.”
  1. Mail the articles to the Secretary of State with the $25 fee.
  1. Through P.A.D.S., get someone to help you fill out the application to the Internal Revenue Service for nonprofit status. The fee for filing this is about $600. P.A.D.S. has grant funds to cover this cost if you file your application in 2013. The IRS will review your application and might ask you for more information before it is approved.
  1. Once your application is approved, you are more likely to be eligible for the kinds of grants that support what you want to do. People can also donate to your organization and get a tax break.
  1. If any organization here thinks they want to become a nonprofit corporation, PADS can help with that.
  • Before you decide to incorporate and file for nonprofit status, here are some things you need to know.
  1. You will need to find good, dedicated people to serve on your Board of Directors, who are willing to come to every meeting, to be prepared for every meeting, to ask questions if they don’t understand something, and never, ever be afraid to speak up if they see something important that needs to be addressed.
  1. Your Board members have to take full responsibility for the organization. They can’t just walk away. If your organization is managing funds received through grants or donations, EACH and EVERY Board member is responsible for making sure that a budget is developed, that funds are used properly according to the budget, and that when the project is done all the money is accounted for.
  1. Board members need to know that since they are now part of a corporation under the State of Iowa, they and the organization can be sued if someone gets angry over something or if they did something wrong or neglected their duty. It’s a good idea to buy liability insurance to protect Board members. This costs about $600 annually. P.A.D.S. doesn’t have grant money to help with that.

As you can see, this is a big decision. A number of Iowa Centers for Independent Living, who had the best intentions in the world, did not have good strong Boards and ran into big trouble.

Here are a few examples of “Board Pitfalls”:

  • Boards are to develop, or have their Executive Director develop, itemized budgets prior to the start of each fiscal year. Budgets are estimates of what will be spent during the course of the year, and may need to be revised from time to time during the year. The full Board must vote to approve this itemized budget prior to the start of each fiscal year, and any changes that need to be made to the budget over the course of the year must be approved by the full Board. The Board must be presented with a financial report at every meeting, which details the itemized budget categories, the amount spent in each category, and the amount remaining to expend for the rest of the year in each category. Boards must approve the financial report at each Board Meeting. One non-profit director never gave his Board a budget to approve, nor financials to approve, even though the Board asked for them. He told the Board they did not need to micromanage him. This is NOT micromanagement! The Board is ultimately responsible for the appropriate expenditure of funds. In this case the ED was hiding things from the Board, and there were funds that were not expended appropriately, and some funds that were being carried over that are not allowed to be carried over. This non-profit now faces financial penalties from the federal funder and the IRS because of this.
  • Non-profits are required to submit a federal 990 tax form every year. One non-profit director was late in submitting his 990 forms in two different years, and after he left the organization the Board discovered this, and they had over $7,000 in penalties that they owed the IRS. Fortunately for this non-profit, they were able to negotiate with the IRS and get those penalties waived, as their only funding source was federal funding, and you cannot use federal funding to pay penalties or interest. The IRS could have come after individual Board Members for this amount if their Officers and Directors Liability Insurance refused to cover them.
  • Another non-profit director was operating several different programs from different funding sources. He was not presenting the Board with an appropriate financial statement at each Board meeting that clearly showed the various funding sources, what had been expended to date, and what was remaining to expend for the year. The ED himself apparently did not know how much money was being spent and where. As a result, this non-profit ran out of funds less than halfway through the year and had to close. In addition, the ED was spending funds from one funding source on the other program, which was not an allowable expenditure. The Board claimed they had no idea the organization was out of money as the ED did not tell them. That is not an excuse that will hold up with the IRS and the federal funder. These Board Members may now be liable for thousands of dollars that were spent on the one program that was not allowable.
  • A non-profit had their ED leave, and decided they did not have enough money to hire a new ED that year. So the Board President became the non-profit ED and stayed as the Board President. This is NOT good policy. As a result, this person stole about $35,000 from the organization. He was charged and spent some time in prison. The Board Members could have been held personally liable for the amount he stole.
  • A non-profit contracted with a state agency for some of their funds. The ED did not keep receipts for expenditures, and as a result they now owe the state agency $38,000 for funds they received but could not document how the funds were expended. As a further consequence, this organization can no longer contract with the state agency, and over the last 3 years has lost over $114,000 because they can no longer contract for funds. The Board Members can be held personally liable by the state for the repayment of the $38,000.

As stated previously, becoming a formal non-profit is a decision that should not be taken lightly. If you choose to do this, you need to ensure you have knowledgeable, dependable Board Members and provide them and staff with ongoing training on fiscal and programmatic accountability.