Emerald Coast Theatre Consultant

If you have served on a board of directors for a not-for-profit organization, you probably know this: The primary responsibility of the board of directors outside of their serving the community in which it resides is its relationship with the State and the Internal Revenue Service.   

The government gives any organization its greatest monetary gift when it grants the organization its designation as a Not-For-Profit.  I am not going into how to obtain that designation (See the note on AACT which has all the information on it you will ever need), but if you have read the AACT entry on Mission Statements, you will realize that the Board of Directors main responsibility is to see that the mission statement is carried out by everyone working in, with or for the organization.   Should the mission statement vary in any way, the board is obligated to report that change to the state.      

Once the IRS has received and cleared all of the paperwork, you will most likely be granted a 501 C 3 Status.  This is the greatest monetary gift your organization will ever receive unless you know a lot of people who have big bucks to spare.   

Once the state and the IRS have completed their paperwork and completed their designation, well, from that point on, the organization must be absolutely transparent to any and all people who might be interested.  

I feel that there are two people that every Not For Profit board should have as members: A CPA and an Attorney.  Simply put, the attorney can ensure that the organization is complying with the laws of the state and the IRS and the CPA is there to make sure that all financial dealings are absolutely transparent.  Let me repeat: Anything financial.  It is extremely important that a 501 C 3 organization have a clear financial spreadsheet and an open, honest and flawless record of decision making by the board monitored by the CPA and an attorney whenever possible.

Over the years, when I was either a Managing Director or an Artistic Director of a theatre, I had requests to give a special prop to an actor, a member who wanted me to buy paint for them (at a 40% discount) for their personal use, and a host of other personal requests to use the 501 C 3 designation or Not For Profit Status.  The daily manager of the organization must resist that to the fullest.  The Not For Profit status is assigned to the organization, and should be used only for the benefit of the organization as outlined in IRS regulations.  That should be implanted firmly in anyone’s mind that might be tempted to try to circumvent what is open, honest, transparent and moral. 

Let me restate:  It is the business of the Board of Directors to make sure that everyone in the organization adheres to the mission statement.