Transcript Affiliate Governance - American College of Nurse

AMERICAN COLLEGE OF NURSEMIDWIVES, INC.
AFFILIATE DEVELOPMENT AND
SUPPORT BACKGROUND
INFORMATION
The primary goals of the ACNM State
Affiliates are to:
• Support individual ACNM members.
• Foster stronger ACNM member
communities.
• Increase the effectiveness of ACNM’s
advocacy for improved access to highquality midwifery care for women and
their families through state legislative,
regulatory, and health policy activities.
The development of state Affiliates will
change the way ACNM members work
together within states, between states, and
between the state and national organization.
In the early phase of implementation of the
Affiliates, state leaders should focus on
identifying and prioritizing those elements
which will:
– Facilitate successful formation of the state Affiliates.
– Enable effective communication and coordination
between state leaders and between state and national
leaders on state legislative, regulatory, and health
policy strategies.
– Minimize the administrative workload associated with
state Affiliates at both the state and national level.
• The following document provides background information
related to the steps a state/ territory/ uniformed services
need to move forward with development of Affiliates.
• The information in this document and the other
governance document samples has been reviewed by legal
counsel. It is his opinion that Affiliates should not need
legal counsel to develop and/or incorporate.
• ACNM will not provide detailed legal advice to individual
Affiliates.
4 First Steps:
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2.
3.
4.
Determine your current Status
Decide whether or not to incorporate
Determine your tax status
Identify operational requirements
STEP ONE: What is your current
status?
• Locate and review your existing
governance documents. These could
include, incorporation status, articles of
incorporation, bylaw/SROPs, insurance
documentation.
• If you do not have or cannot locate them,
you can start from the beginning.
STEP TWO: To incorporate or not?
• Affiliates can choose whether or not to become
incorporated. However, ACNM strongly recommends that
affiliates incorporate. The advantages of incorporation are
explained below. The only real disadvantage of
incorporation is the cost (approximately $100). An
unincorporated association is still a legal entity and can
enter into contracts and sue or be sued, but it exposes its
leaders to more liability risk than incorporated entities.
• Again, a lawyer is not needed for incorporation. We are
providing a link to your state website which should have fill
in blank forms and easy to follow instructions for
incorporating.
Benefits of Incorporation:
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Liability protection.
• If an Affiliate does not incorporate, the members and
leaders can be held personally liable for the debts and
other legal obligations of the Affiliate. This liability includes
more than contractual liability. For instance, if someone
drinks too much alcohol at an Affiliate function and has an
accident, the injured party could sue the Affiliate,
members, and Directors and obtain a judgment, which
would be collectible from the individuals if the Affiliate has
insufficient assets or no insurance. In an incorporated
Affiliate, the members and Directors have protection
against that personal liability.
Benefits of Incorporation:
• Incorporation avoids personal liability
exposure in business arrangements.
• Unincorporated Affiliates seeking to hold hotel
meetings are more likely than incorporated Affiliates to
be required to have their Officers sign and guarantee
the hotel contracts personally, because hotels (and
other business entities) want a definite entity to be
responsible for the bills. Such guarantees can lead to
personal liability if the unincorporated Affiliate does
not have the resources to cover expenses.
Benefits of Incorporation:
• It is not expensive to incorporate.
• For a minor filing fee (usually under $100)
affiliates can file Articles of Incorporation with
their State to incorporate and obtain the
additional protections of incorporation. Most
states require the filing of an annual report
fee with a fee that is usually less than the cost
of incorporation.
Benefits of Incorporation:
• It is not difficult to incorporate.
• Even unincorporated entities need a founding document,
called a constitution. For just about the same degree of
effort you can create Articles of Incorporation, and
establish a corporation to provide some liability protection.
• ACNM will have a link to the guidance on each State’s
website, as well as a template you can use to insert into
your Articles of Incorporation. The state website should
also include either guidelines about the law or a copy of or
link to the state law governing nonprofit information.
Benefits of Incorporation:
• Predictable governance.
• When you incorporate, your bylaws create a
predictable governance system establishing
clear procedures for such important issues as
officer/board terms, meeting notice
requirements, voting rights, officer positions,
elections and succession.
• ACNM is providing templates for Bylaws.
Benefits of Incorporation:
• Insurance.
• Liability insurance.
• Although ACNM’s Comprehensive General Liability insurance policy does
not cover Affiliates, ACNM’s insurer has said it can issue extension policies
to Affiliates. Liability insurance extended from the ACNM policy would
currently be approximately $350 per year, payable by the Affiliate. At
present, that insurer said that this Liability insurance would be available to
incorporated and probably also to unincorporated Affiliates.
• Liability insurance will be required. Affiliates may be able to find a better
price and should consult with the local Chamber of Commerce or Small
Business Administrations in their state for suggestions about insurance
carriers.
Benefits of Incorporation:
• Director and Officer Insurance (D & O).
•
A director and/or officer of any corporation has a special personal responsibility
for decisions made (or not made) on behalf of the association. In today’s complex
environment, the association and its directors and/or officers can personally be
sued for alleged antitrust violations, discrimination, financial mismanagement and
any number of perceived acts, errors and omissions in their capacity as an
association leader.
•
ACNM can supply information about the College’s D & O insurance carrier.
Incorporated Affiliates will have access to D&O insurance with the ACNM insurer,
but unincorporated Affiliates will not. It may be difficult for unincorporated
Affiliates to find D & O insurance.
•
D & O insurance is optional, but recommended.
•
Unincorporated Affiliates and Affiliates seeking a better price and should consult
with the local Chamber of Commerce or Small Business Administrations in their
state for suggestions about insurance carriers
STEP THREE: Tax Status
• Tax IDs: Tax IDs (otherwise known as the Employer
Identification Number (EIN)), are required of every
business entity. Also, they protect you because the IRS
could mistake an ACNM Affiliate as being responsible
for the tax reporting or tax transgressions of another
entity, unless the Affiliate has a Tax ID.
• Tax IDs are free and easy to obtain. They do not
require a statement or proof of official tax status
below. It does require filling out a one page document
(SS-4). An Affiliate does not need to be incorporated to
get a tax ID.
501-(c)(6) Status
ACNM strongly recommends 501-(c)(6) status
• This allows for significant spending for
lobbying.
• Applying for tax status is in addition to
applying for a tax ID.
501-(c)(6) Status
• Dues, donations and other monies received by
the Affiliate may not be classified as charitable
or non-taxable contributions under this tax
status. Therefore, donors may not claim a tax
deduction for donations made to a 501(c)(6)
organization.
501-(c)(6) Status
• 501-(c)(6) tax status does not permit
campaign contributions. An Affiliate would
need a state Political Action Committee (PAC)
in order to make campaign contributions
legally
501-(c)(6) Status
• Each Affiliate can file for 501(c)(6) status. It is
more complicated than incorporating and
there is also a filing fee of up to $750.
• If you already have this status, great.
• If not….
501-(c)(6) Status
• ACNM is pursuing a “group ruling” that will allow
incorporated Affiliates to use the ACNM 501(c)(6) tax status.
• Affiliates seeking to use this group ruling must agree to the
same tax year and to terms such as the same scope of
activities as ACNM.
• Affiliates must agree to file all required tax documents
according to state and IRS rules, including filing a Form 990 if
the Affiliate income is over $25,000.
• ACNM incorporated Affiliates can be added to the ACNM
501(c)(6) tax status
State Taxes
• Affiliates need to check with their state regarding
state taxes.
• Associations that are exempt from federal income
tax are ordinarily exempt from state taxes. A
separate application for exemption must be filed
in some jurisdictions. Check with your state
revenue department
• You can find your state revenue department
online and in the blue pages of the phone book.
STEP FOUR: Operational
Requirements
• As authorized in the bylaws, whether an
Affiliate is incorporated or unincorporated,
the ACNM will require Affiliates to:
Operational Requirements
• Have Articles of Incorporation and Bylaws (for
incorporated Affiliates) or a Constitution
(comprising the same provisions as Articles
and Bylaws, for unincorporated Affiliates) that
do not conflict with ACNM national bylaws.
Operational Requirements
• Avoid any activities or actions that could
violate their tax exempt status and avoid
activities that could cause ACNM to be legally
or financially obligated (unless they obtain
written authorization to do so by the ACNM
Board).
Operational Requirements
• Obtain Comprehensive General Liability
insurance.
• The ACNM insurer can currently make this
insurance available to all Affiliates, including
unincorporated Affiliates. In order to minimize
risk of legal exposure, Affiliate leaders may also
want to purchase D and O Insurance, which
unincorporated affiliates may find difficult to
obtain.
Operational Requirements
Activities must be consistent with the applicable documents and
policies of the ACNM including but not limited to:
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Conflict of interest.
Whistleblower Policy.
Record retention.
Confidentiality.
Ownership of Intellectual Property.
Ethics Policy.
Sexual Harassment.
IRS Prohibited Actions.
Lobbying
• ACNM will provide templates for these policies.