After more than half a century serving nonprofits in various capacities, including as chairman of the board of trustees and donor, Don Keelan has put together a book of columns that he hopes will keep nonprofits thriving in Vermont, especially after some high-profile setbacks.
Keelan, a retired certified public accountant and retired U.S. Marine, calls the book, “Observations on Nonprofits,” an “informal guide for board members and volunteers.”
The importance and relevance of the topic is apparent weeks after three local colleges, College of St. Joseph in Rutland, Green Mountain College in Poultney and Southern Vermont College in Bennington, hosted their final commencement ceremonies.
“I’m beginning to see, unfortunately, quite a few failures of nonprofits here in Vermont. More recently, you have four colleges that have failed. These are all nonprofits. It can’t just be the lack of students. I don’t believe that. I think it’s a lot more than that,” Keelan said.
Burlington College, which closed in 2016, was also on Keelan’s list.
“The commonality among all four of them is that they carried a huge debt load that they could not service. The question I have is, if that was the case, where was the board of trustees in evaluating that years ago? Why take on the debt if you’re not going to be able to service it? How were (the board members) even involved in the first place?” Keelan asked.
Keelan said he would be interested to find out how regularly board members of the colleges attended meetings and took an active part in decisions.
Spreading the word of the responsibility that goes with serving on the board of a nonprofit is one of the reasons Keelan put together the collection of columns he had written for local newspapers throughout about 15 years.
“I was hoping that those who serve as volunteers and specifically board members would grasp the seriousness of being a board member and that it entails more than just carrying out the mission for which they joined the board. Also, they have a fiduciary responsibility that, depending on the size of the organization, can be quite extensive,” Keelan said.
The Vermont Attorney General’s office approached him about taking an advisory and editorial role in the creation of a booklet available to board members to learn about their duties to nonprofits in the state.
The booklet has been available since 2015, but Keelan said his “unscientific” opinion is that awareness of fiduciary responsibilities among board members has not improved.
“Particularly when I see the failures of these colleges and I’ve seen other institutions, such as the Manchester and the Mountains Chamber (of Commerce) failing a couple of years ago, when I see the debacle over at the Compass School in Westminster and I’m sure there’s others. … It’s a huge industry that’s really not being watched by any of the regulatory agencies, other than the IRS when you file a 990 tax form,” he said.
In 2015, Common Good Vermont, which describes its mission as increasing leadership, accountability and sustainability for Vermont nonprofits, published a report that said Vermont is home to more than 6,000 nonprofits that employ one in seven Vermont workers, “making the nonprofit sector the largest industry in the state after the government.”
Keelan said there are stricter controls in neighboring New York, but said a similar system is not what he would recommend for Vermont.
“What I would like to see is more of a voluntary compliance — where there’s a nonprofit organization of volunteers that review every year the tax returns, the 990 and the annual statements of nonprofits. They would send comments back to the nonprofits on their financials or other financial matters like operational matters,” he said.
For instance, Keelan said, nonprofit board members may not know that if their nonprofit has bylaws that say they must have seven members but they only have four board members, they’re legally not a nonprofit.
“They’re a club. Also under IRS law, if you fall below three (board members) you’re in trouble. There’s a number (of nonprofits) around where that’s exactly what’s happening,” he said.
The advisory board could guide boards into compliance in a collaborative way.
Keelan said he’s concerned about the number of Vermonters who are capable and willing to serve on boards and whether nonprofits may be forced to merge to survive.
While Keelan said he understood some nonprofits may be reluctant to give up autonomy, the fates of four Vermont colleges continue to serve as a reminder of what’s at stake.
“Cash, to any organization is like blood is to the body. If you don’t have it, you’re not gonna exist. Financial controls are to an organization what infections controls are to a hospital. If a hospital fails to follow its protocols on infection control, it’s gonna collapse,” he said.
The book is available at Northshire Bookstore in Manchester or online at www.dbkeelan.com.
Visit bit.ly/0607Nonprofits to read a booklet about serving on nonprofit boards.