 Welcome to another episode of the nonprofit show. We're just getting going. It's Friday. We have Jack Elotto from Friend Raising Academy, one of our favorites. We love putting you in the hot seat, my friend. Great. Glad to be here. You always have a good spirit, Jack. I always feel like no pun intended. We can't set your hair on fire. No, you can't set my hair on fire. At least not on my head. Maybe you're here. Well, you're always gonna be calm and you're gonna be really filled with a lot of perspective and in the green room chatter, we've been talking about your illustrious career and fundraising for hospital foundations, some faith-based, some not. Really cool. I love all the different things that you bring to us when we're fortunate enough to get you on with us. Great. I'm glad to be here and I'm always glad to see you, Julia. Well, it is a lot of fun. For those of you watching, we are marching towards our 600 episode of the nonprofit show. And Fundraising Academy has been with us from the get-go. You and I have never met IRL in real life. No, but I feel like I know you very well. I know you're over there in Phoenix, which is probably very hot right now. And I'm here in the desert of California where it is definitely very hot. Very hot, yeah. Well, yeah, I mean, that's kind of one of those things. I think that if I lived in any other part of the country, it'd probably look a lot younger. I wouldn't have this like desiccated skin from living in the desert. Yeah. It's sort of like you have to go up to the Bay Area to get a little moisture on your face, you know? It's true. Oh my gosh, it really, really is true. And it's one of those things that I think those of us that live in the desert, man, there's a point in time that comes every year where I'm like, get me to the water. I just have to see water. And I, it's like, I just need it. And it's kind of a funny thing. Well, hey, speaking of water, let's not water down anything that we're going to talk about today because we're ready to go. How about you, my friend? I am ready to go. Okay. Welcome everyone to another episode of The Known Profits Show. You joined us on a Friday and you know what that means. That means ask and answer with our favorite folks from Fundraising Academy, Cause Selling Education. We are super excited today because we have the one and only great Jack Alotto who's going to chat with us. And before we get on to introducing you to Jack, we want to make sure we thank all of our sponsors including Fundraising Academy, along with Blue Moran, your part-time controller, nonprofit nerd, American nonprofit Academy, nonprofit thought leader and staffing boutique. These are the folks that are joining us daily to help us get this show on the air, which you can find us on Roku, YouTube, Amazon Fire TV and Vimeo, and now on a podcast format. Our executive producer Kevin Pace has masterfully taken these files and put them into podcast format in a short period of time. We already have achieved about 1500 downloads. And so as you're marching along, house cleaning, driving, whatever, you can take us with you. So join us in any of your streaming podcast platforms. Okay, Jack Alotto, we love your comments. Love your mindset. You ready to go, my friend? Yes, I am. Okay, Ali from Detroit, Michigan writes, how important is it to hire a director of philanthropy who is a CFRE? We're opening up a job for this very important position and have only had CFREs in the past. However, with the tight labor market, we're wondering if this might be a requirement that hinders our application pool. Yeah. That's a good question because talk about first and foremost, talk about your connection to CFRE. So I am a CFRE and I am very proud that I try my best to help people who are candidates for the CFRE, achieve the CFRE. I think it shows a level of commitment to learning that we're professionals and we want to learn. And one of the things that I love about CFRE is that you've received a, not a certificate, but a certification, which is quite different than anything else. It shows a level of competence. It says to all of your stakeholders, your board, your coworkers, the people who you serve in the nonprofit and most importantly to your donors that you are committed to being the best that you could be as a fundraiser. By the way, let me also say that those of you who are watching this show today, you are also showing that level of commitment. I just think it's just a great thing that you do to show everybody and to prove to yourself, one of my greatest joys, Julia, is when somebody calls me up and says to me, Jack, I passed the test. I'm now a CFRE. And for marginalized groups, this is so important to me when an African-American or a Latina or a Latino calls me up and says that because they're underrepresented in our profession and CFRE is such an important designation for them to achieve. And I really love that. The other thing is, I think that the CFRE says to all of those stakeholders is that you are in the fundraising profession for life. You're not gonna someday wake up and say, you know, I think I'm not making enough money or I don't like this enough. I'm gonna go sell real estate, you know, or some other thing, other jobs. So when you do it, it says that you are committed to staying in this for life. I wanna say one other thing, Julia. I have met some awesome great fundraisers who are not CFREs. Okay, okay. So I don't want to sound like the bias guy. Look, I have it, I urge people to get it, but it doesn't mean that you're a great fundraiser. It means that you show a level of commitment. There are so many other great fundraisers who do not have the CFRE. Okay, so to, I have one more question and then I do wanna get back to Ali's question, Ali's specific question. And that is, I don't think it's an easy thing to achieve to get your CFRE. So when you are, when you can put that designation with your name, it seems to me, especially for a director of philanthropy, it's a higher level labor. Yeah, you know, the CFRE is a relationship building fundraising strategy. And by the way, the cost selling cycle is a relationship building fundraising strategy. And there's so much overlap between those two models of fundraising. What I love about CFRE is that it takes you through six domains. It starts at the very beginning of the cycle, which is prospect research. And I'll tell you the number one question I get and the number one question you get is how do I find more donors? So we start right at the beginning and it takes you through securing the gift, relationship building, volunteer management, involvement. That's working with your board as well as volunteers who are fundraisers. And I always like to say this about fundraising. If it weren't for volunteers, we would fail. Yeah. Because volunteers really advance our mission in so many different ways. We have management, leadership and management is the fifth domain. And finally, one of the most important domains that we talk about in CFRE is ethics and accountability. And it's so important about ethics and accountability because we would not have trust from our donors and our stakeholders if we were not ethical and transparent and have accountability. I love it. I love the model. And I love going through it with people. It takes between 60 and 80 hours to study. And as you know, Julia, or maybe you don't know this, but just this past week, I wrote an article on creating a study plan which is now on the CFRE website. And I urge people to go and read that article. Wow. So I'm thrilled that you could bring this information to the table. And I hadn't expected that, but I'm super appreciative. It makes it seem like for this question that's coming to us from Ali from Detroit, you're gonna say stick to the CFRE designation. Yeah. Especially for the director of philanthropy. Is that right? Especially for the director of philanthropy. Yeah. And you know why? Another reason, there are so many young people coming into our profession. Just today, just this morning, I got an email from someone who was in a previous study group of mine. And she says, you know, I'm mentoring some younger staff in my department. And I'm wondering what you think, can they get in your study group? Can you help them? Because as she's mentoring these young women or young men who are coming into her department, she recognizes after having been through the process. Like I said, it's not the only thing that you need is the CFRE, but she sees it as an important step in developing them as fundraisers. And I love that. Well, you know, Ali, I hope that this helps you because while it might seem like it is, you know, putting your opportunity in the small end of the pool, man, maybe in the long run listening to Jack, it is the right thing to do. And especially to Jack's point, if you're looking at that director level, this is a bigger picture issue. So I appreciate you reaching out Ali and let's see what happens and check back with us. Okay, Darren from Palo Alto, California writes, have you heard of board bylaws requiring board chairs to remove themselves from all other board activity during their term? Meaning they would have to resign board seats in order to serve our nonprofit. We have a governance committee who's floating this idea and I think it's problematic. Please advise. It's problematic and I'll tell you why I think it's problematic. First of all, I would like to ask them why? Why does serving on another board bother you? What's the why behind that? Here's the other thing, Juliet, you've served on boards, I've served on boards. Ask yourself, why do people join boards? They join boards because they believe in your cause. They want to help you advance your mission and they do it out of love. Love for the people you serve, love for your mission, love for the values and vision of your organization. Why would you tell anyone that they could only exclusively love your organization? Do you really want to tell them to give up this other organization after those motivations I've just described to you? I think it is problematic. I would want to know why they think they need that exclusivity. You know, Jack, over the years we've done at the American Nonprofit Academy a lot of board training or a lot of board boot camps and where we would have board members, you know, from all over the region come in and do a full day training. And the only time I've ever heard about this was from a medical board and it was a dental association, like a statewide dental association. And they required it of their board chair and their board chair electors. I think those two people, and if I'm not mistaken, they felt like it helped protect them from HIPAA issues. To me, you know, I think part of board work and board leadership is building consensus and building community. And it seems to me like they took those two top leaders and extricated them from the greater community. So I don't know, but looking at this question, I am thinking that that really has been the only other time I've heard of it. And I don't know, have you heard of this? I've never heard of it, but you know, that problem of HIPAA violations, it's have them sign a confidentiality agreement. Well, it should be policy anyway. Yeah, I mean, I've signed them for, you know, low income organizations, you know, you don't want to go around talking about the clients who are served by a low income organization or in a hospital, you know, worked in healthcare philanthropy. Certainly, you know, we knew what HIPAA was, we went to HIPAA trainings. So, and we signed confidentiality agreements. So I mean, if that's what you're worried about, and that really seems the only thing, unless you have so much competition and you're afraid that they're gonna be on the board of a competing organization, and then, you know, but your bylaws can specify things like you can't share donors, you can't bring donors to the other organization that you're on the board of. I mean, there's lots of things you could, you could fix it in other ways without, I don't think, I don't know about you Julia, but I don't think I would join a board if someone said, hey, if you could join our board, you can't join any other board. You know, yeah, it's kind of a country club effect. And I agree with you on that. I think it's really interesting. Darren, I hope this helped you today. My friend, I'm thinking that it is problematic and this is not a good way to go. And I've also got to say, Jack, you know, it's not super easy to attract good board members. So if nothing else, if you're just looking at, you know, supply and demand and how you're gonna be able to really cultivate and steward a strong board, not a good choice, not a good choice. Absolutely. So, okay, let's go to our next question. This is a real doozy. I don't think anyone's ever asked us this before. Josh from Oklahoma City writes, are there any nonprofits out there who are paying their board members a stipend for their board service? No. So I, you know, there are no federal laws prohibiting paying stipends or payments or even a salary. You could reimburse them for expense. So there are no federal laws. You're not violating any laws by doing this. But I think your bylaws, back to the bylaws which are the governing, it's the governing document. They have to define stipends and payments or even hiring them. So make sure your bylaws are consistent with what you're doing. Some organizations have staff on the board. I worked for Catholic Charities and the CEO was the secretary of the board but it was defined in the bylaws, bylaws, bylaws and more bylaws, I like to say. But I wanna tell you something just on a feeling level for me, Julia. Board members should be volunteers. If you give them a stipend, they are not a volunteer anymore. Are they, or I should ask the question, do you think they're still volunteers? If I worked in a library and I had volunteers and they were paid stipends, they would become my staff. Yeah, true, that's what it does. Yeah, so that's number one. And the volunteer nature of our boards is beautiful and it's strong and it sends an important message to the people, the stakeholders. If you're paying your board members a stipend, you have to disclose it. That's what transparency is. You would have to disclose it. If I was a donor and I saw that Mr. Smith, who's on the board of XYZ nonprofit is getting $2,000 a year as a stipend, which is not a lot of money, I would really carefully think about whether I wanna make a gift to that organization. Right, yeah. So look at it from the donor's perspective or the public's perspective. One of the things we say about ethics and the importance of ethics is that it's the appearance. Even if it appears bad, you shouldn't. Yeah, the only thing I've ever, the only time I've ever heard about this is from a very, very large foundation and they, of course, they pay for their travel and everything of their trustees to come in, but they give each one of their trustees a certain amount of money that those trustees can individually give to something in the nonprofit sector, which is a gift and it's not, so it's not part of their grant process and it's really more just like an action of benevolence. And I don't know what that money is. I don't know if it's like $5,000 or $10,000 a year. I mean, it's probably somewhere in that range. Right. But it's not a stipend, but it's a controllable gift, if you will. I'm not... I love that idea, I love. Here's the thing, we're back to asking the why question. Why do you wanna give a stipend? Is it because you can't attract good board members? Well, then you have bigger problems. Okay, much bigger problems than the fact that you can't attract good board members. I mean, I like asking the question, why? Why do you wanna pay a stipend? Why is it so important to you to pay a stipend? Yeah, no, I agree with you. And I just don't see this as a part of the ethos and the culture of philanthropic leadership. I really don't. Now, that's not to say that you don't support the participation, meaning you offer travel expenses, you feed your folks, you pay their travel in time if they're going out of state or going to conferences, stuff like that. Oh, yeah. I think you gotta honor that. But yeah, to your point, and also, man, I feel like it's a can of worms. Oh, yeah. And the appearance of impropriety, it's a problem. And it's not illegal. There are lots of things that are legal, but still we don't do them. We're not gonna do them. Well, Josh, I hope this helps you. I mean, we've kind of like, you know, beat you up on this one, but I just would say not a good choice. And yeah, ultimately not something that you're gonna be glad you did, I mean, by any stretch of imagination. So let's move on to, oh, now this is really interesting, Jack. This is I think the first time we've ever had this. An entire board has sent us this question from Providence, Rhode Island. We are working on creating a new HR process for our next CEO. Specifically, we feel that an employment contract spells out job requirements is needed. Are more nonprofits doing this, where would we begin? Employment contracts, huge topic. Yeah, you know, and all four of these questions, I always ask, why? Why do you want a contract? What is the problem you're trying to fix? You're changing the process according to this question. Why do you need to change the process? Now, I think that contracts are good. There's advantages and there are disadvantages, okay? The advantages are that it specifies the benefits of the salaries, the salary, the grounds for termination, the duration of the employment. And some of the advantages for a nonprofit, it's difficult to find a CEO. It's costly, so you wanna lock them into some employment term, you know? So that's, I see that. For some reason, you might end the contract, you might say you have to give us three months notice before you leave, which, you know, you don't want the organization to be leaderless for a long period of time, that's not good. And you may wanna specify confidentiality or taking our donors list to another nonprofit that you would go to next. So one of the final things I like about our, I think that is an advantage. It enables greater control of the employee. And I'm back to asking, why do you wanna have greater control? So that's an advantage for the employer. So what are some of the disadvantages? It's a binding agreement. You can't breach a contract. And if you do breach a contract, you're gonna go before a judge and what's gonna happen, you're gonna be opening your checkbook to deal with it. And what, you know, when I did this search, Google search, who in the nonprofit, typically it's high level employees. It's not, you're not getting employment contracts with, you know, receptionist or, you know, your grant writer or things like that. The other thing that I think is really important, job descriptions, job descriptions are a form of nonprofit employment agreement. And scum to those things, yeah. Some of those things like confidentiality, you could put in there in your job description. You could cover some of those same points. I don't know whether you should do a contract or not. I mean, it's up to the organization to decide. But it sounds like in this organization, Julia, maybe you get the same impression. They're changing their process. Yeah, it seems like it's a reaction to maybe a problem. And I think what you said is perfect. Why? And so when I first read this, I thought that was, you know, that they're having an issue. But first and foremost, you need to sit down with an employment attorney. Yeah. Labor attorney, because it is, to your point, it's a binding, you know, agreement that has costs in preparing it, costs in executing it and costs in stewarding it if it goes south. But I like what you said, and I hadn't really thought of it that way about that the job description is in essence going to help you put up some guardrails and lay out the process. And maybe that's really the better choice here. Yeah. Yeah. You know, in my Google search, I found this judge said that you can't breach a contract. And in quotes she wrote, it's a covenant of good faith and fair dealing. And if a judge says that you dealt with an employee unfairly, then be prepared to pay for it. Right, right. Wow. Well, I think it's a really interesting question. And I love that a whole board sent us a question. That's awesome. Again, I don't think that's happened before. And so good answer, Jack, and hopefully that will help them. Hey, you know, for our time is up, I wanna make sure that we circle back to the CFRE piece. I really, what a great time for us to get this question given your connection to the process. And in the green room chatter, you were mentioning to me that, and I think you amplified this just a little bit, and I wanna drill down. You do CFRE training. You're a trainer with Fundraising Academy, but you also do this piece of it. You remind me, you have a CFRE training coming up? Yeah, so I host, I try to coach CFRE candidates through a study group. So our next study group starts July 9th. There are seven Saturdays, and we go through those six domains. And so anybody who's interested, it's free. There's no charge for it. It's one of my passions to work with individuals, young fundraisers to achieve that designation. And it gives me great joy to do that. People ask me all the time, Julia, why does Julia do this work? Why does Jack do this work? Why are we have a study group? Why do you have the nonprofit show? Here's my answer. You and I and Jared and Tony, Belle and Pearl and a lot of other people, we do this work because when they are better at fundraising, all boats rise. We are all better. I agree. We are all better off. If Susie is working in a hospital and she's raising more money for indigent care, then I feel like I've been part of that in helping raise that money. In the same way that the nonprofit show would help this board who's looking at a contract to be better at it, all boats rise. And you know what? I love that about the United States and Canada and other places that people come and study groups. This study group coming up, I have people from the United Kingdom and Canada and someone from South Africa. That's a great joy. Well, check out Jackalotto. You can connect with him on LinkedIn or connect with him through fundraisingacademy.org or reach out to me or us at the nonprofit show. We certainly want to help any of those connections. You know, I appreciate you and I appreciate that we would have questions that kind of pull this together because it's super interesting to me the timing of this Jack. I really appreciate what you've shared with us today. Again, I want to make sure that we thank all of our sponsors. Again, Fundraising Academy is our premier sponsor for Ask and Answer every week. But we also have Blue Moran, your part-time controller, American Nonprofit Academy, the Nonprofit Nerd, Staffing Boutique and Nonprofit Thought Leader joining us as we march towards our 600 episode, which is a mind blower. But I hope it is. It's like, woo! Oh my gosh, you know, as we end every episode, we want to make sure that we thank our wonderful co-host today, Jack Alotto, and to remind everybody to stay well so you can do well.