Mom and Pop Gone Bad
One of the issues I see in Haitian NGOs is potential conflict of interest related to board voting on staff compensation. Many NGOs in Haiti are what I call "mom and pop" NGOs - organizations created by a couple and operated by them and their friends or fellow church members. Boards are usually family members and friends and also may staff the organization. Very few of these NGOs are making enough to pay a wage truly commensurate with the skill and labor involved in successfully running an NGO in a country like Haiti. This comment is not about them.
it is about the "mom and pop" organizations that have grown larger and still have family members on the board and also on staff. The pay is now more commensurate with the skills but the compensation is going to mostly family members. This is a glaring conflict of interest. I know of one organization where 65% of the executive compensation is going to 4 members of one family - all members of the board. In addition the family is getting an additional 23% of base compensation from other related organizations. It appears that the organization exists to support this family. One might make a case where intermingling on this level is appropriate but it should be justified and stated clearly on the website and financial materials. Simply recording it in the legally required 990 that the average donor will not read is not transparent financial accounting. It is following the letter of the law - not the spirit.
Diving Deeper:
Nonprofit Organization Laws and Regulations – FAQs - conflict of interest among board members
Nonprofit Organization Laws and Regulations: FAQs | BoardSourc
Paid staff cannot work for free
Paid employees of a non-profit organization cannot volunteer to provide the same type of services to their non-profit organization that they are employed to provide" This means that a good intentioned staff member cannot work for free for any amount of time. This applies to profit and non profit organizations. It is designed to protect workers. This regulation should be maintained across all staff working in the U.S. and in Haiti. Haitian employees should not be exploited anymore than workers in the U.S..
Diving Deeper
Fact Sheet #14A: Non-Profit Organizations and the Fair Labor Standards Act (FLSA)
https://www.dol.gov/agencies/whd/fact-sheets/14a-flsa-non-profits
Interns are different than volunteers who are different from paid staff
Haitian NGOs are frequently run in an informal manner ere everyone pitches in and little attention is paid to titles or job descriptions. Having a clear understanding of what the IRS and the Labor Department consider Interns, volunteers and paid staff though will help prevent trouble down the road. Paid staff have certain legal rights and if a volunteer drifts over to paid staff status the NGO may find itself required to pay benefits to a volunteer. This could happen for example if an NGO gives a gratuity to a volunteer - it may be construed as a change from volunteer status to paid in the eyes of the IRS or Labor Dept.
A big no-no is having a volunteer doing a paid staff's job.
"The classification of a position as a volunteer role versus a paid employee role in a nonprofit should be based on a number of factors, and never solely on whether funds are available to pay the worker. Generally, volunteer roles are those that:
do not require the worker to follow a consistent, full-time schedule;
are required on an “as needed” basis throughout the year, versus a fixed number of hours on a regular basis;
vary depending on the programs and services of the nonprofit (e.g., special events, seasonal work, etc.); and
are dissimilar in scope, requirements and expectations from paid positions in the organization."
Another issue can be how to use interns. The IRS and Dept of Labor have a specific definition for interns and an expectation of the tasks that an intern would do. The spirit of the law is that these tasks will provide a boost to a young person's career or employment prospects. This means that using an unpaid intern to do something like simple data entry may be in violation of the law. Note today that the trend today is to move away from unpaid internships- especially the use of of students. it is considered exploitive and furthers a system of discrimination of Black and Brown students and those from lower incomes. Those without families to support them financially while they intern are left at a disadvantage - losing at a career enhancing opportunity simple by virtue of their family status.
Diving Deeper
Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act
https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-internships
Employee or Volunteer: What's the Difference?
https://nonprofitrisk.org/resources/articles/employee-or-volunteer-whats-the-difference/
Please forward to colleagues in the Haitian NGO sector.
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Contact Win Flint at winifred.flint@gmail.com