How understanding history can help nonprofits address persisting inequities

By YW Boston

MNNYWBostonSharedSectorAugust2020-min

As nonprofits, we dedicate ourselves to a mission larger than ourselves, our immediate geography, and our moment in time. In order to meet our organization’s goals, internally and externally, it is necessary for us to gain an understanding of how inequitable systems have created and perpetuated violence in our communities. Inequitable systems that have propagated violence against people of color, and Black people in particular, continue to influence all realms of American life, including education, healthcare, housing, and beyond. By naming inequities as violence, we can better commit to creating truly nonviolent organizations.

YW Boston recently facilitated the workshop titled “Understanding Inequitable Systems as Violence” and in it we provide historical context to help foster a better understanding of U.S. history and how inequitable systems came to be. We also provide strategies and pathways for organizations looking to make a positive change:

What is collective violence and how does it manifest itself in the world around us?

Violence is defined by the World Health Organization as “The intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment or deprivation.” Collective violence specifically refers to violence enacted upon members of a group against another group or set of individuals.

Collective violence can be broken down into three categories; social, economic, and political. While social violence can be seen in mass incarceration rates and funding for both school districts and housing, political violence can be seen in redistricting, voter ID laws, and disenfranchisement. Economic violence can be best understood when looking at the most recent financial crisis where predatory lending, subprime mortgages, and unemployment was disproportionately affecting people of color. It is important for nonprofits to consider how these inequities manifest themselves today and the ways in which they interact with our work.

What can nonprofits do to take action?

We often hear how important it is to “take action” but it can be difficult to know exactly what to do. Non-violence is not just about which actions to avoid, but also about what we are going to do about the violence and injustice present in our society.

For an organization to become more diverse and equitable, and to create an inclusive culture, change has to encompass all areas within the organization. For organizations to create lasting change, we suggest a focus on the following seven pillars:

  • Buy-in from leadership
  • Regular working groups with various perspectives
  • Diversity within decision-making structures
  • Shifting toward unbiased hiring, retention, and promotion systems
  • Examining all practices and systems within the organization for inequities
  • Defining and finding intention around the culture of the organization
  • Allocating resources to support the change you are trying to achieve

Learn more about the history of systemic racism and about strategies for organizational change by accessing a recording of YW Boston’s workshop.

Photo credit: Sushil Nash

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About YW Boston

As the first YWCA in the nation, YW Boston has been at the forefront of advancing equity for over 150 years. Through our DE&I services—InclusionBoston and LeadBoston—as well as our advocacy work and youth programming, we help individuals and organizations change policies, practices, attitudes, and behaviors with a goal of creating more inclusive environments where women, people of color, and especially women of color can succeed.

As part of that work, we are helping organizations prioritize Diversity, Equity & Inclusion and become socially connected while staying physically distant. During this time, YW Boston is providing organizations with digital workshops and resources to help them better understand the challenges faced by their employees. For more information, please contact Sheera Bornstein at sbornstein@ywboston.org.

Final Massachusetts Paid Family and Medical Leave Regulations Released

By Jessica Sullivan, Insource Services, Inc.Nonprofit 411 Insource - August SN-min

Several months ago, most employers began preparing for Massachusetts quickly approaching Paid Family and Medical Leave (PFML). Recently, the DFML released the final regulations. The changes were not substantive but provided clarification, as listed below. Click here for the full redline version of the regulations.

A refresher: PFML, a state-offered benefit for qualified MA employees, provides up to 26 weeks of job-protected, paid leave for medical and/or family reasons. The cost is shared between the employer and employee or employers may opt to cover the entire cost. A quick summary of the provisions is included below. Note that many of these were modified in the recently released final regulations.

  • Job protection extends to employees who choose to use a richer employer sponsored paid leave policy (sick bank, temporary disability, company leave policy) rather than filing for benefits under PFML. The employer is responsible for notifying the state/private plan and the employee also receives PFML job protection. Employers paying the PFML state tax are also eligible for reimbursement in the amount equal to what the state would pay for the same leave.
  • Treatment can include telehealth visits with a health care professional.
  • Leave can be taken in increments of 15 minutes but will not be payable until either 8 hours has accumulated or 30 days have passed from date of first use.
  • Employers with a private plan can require proof of wages from a newly hired employee (or current employee who has not worked the requisite quarters) to determine eligibility.
  • When employers transfer to or from the state tax to a private plan or between private plans, claims in process will remain with the plan through which the claim was originally approved.
  • Employees eligible for coverage while employed should apply for benefits with the former employer if covered under a private plan and if not more than 26 weeks has passed since employment ended.
  • Leave for substance abuse applies only to treatment through a licensed program. A family member of an individual in treatment may also be eligible for PFML leave.
    • If employers with an established policy regarding substance abuse in the workplace that is communicated to all employees and have proof of a violation of this policy, the employer can terminate the employee while on leave or within the 6 months after returning.

An employer providing a company paid leave benefit for a reason that would otherwise qualify under PFML is eligible to be reimbursed for the amount the state would have paid the employee for the same leave. This is applicable to employers who pay the PFML tax. What should you be doing now?

At this time, most employers are considering the practical application of PFML: how existing leave policies will intersect with PFML and what changes, if any, should be made to unify benefits and leaves. And, we are all waiting for the DFML to release their protocols for applying, turn around time for payment and the process they will use to work with employers. For now, here are a few reminders:

  • Display the poster: PFML Mandatory Workplace Poster and add Mandatory Employee Written Notices to new hire information (they must be shared within 30 days of hire).
  • Review or consider instituting a workplace substance abuse policy.
  • If you plan to require a fitness for duty from employees returning from leave, it’s a good time to start reviewing and updating your job descriptions. Employers need to provide a list of essential functions within 10 days of an approved leave to qualify the employer to ask for a fitness for duty at the end of a leave.
  • Review and begin to update employee handbooks to coordinate the benefits and requirements across your leave policies.

If you would like to review your leave policies with us or need further assistance, we would be happy to help at Insource Services.

 

Nonprofit 411: Tips on Alleviating Employees’ COVID-Related Hardships

Nonprofit 411 JohnsonOConnor-min (1)
By Joseph M. Giso, CPA MST

 

The Internal Revenue Service declared the COVID-19 outbreak to be a “qualified disaster,” thereby generating more favorable tax benefits for both employers and employees.

 

QUALIFIED DISASTER RELIEF PAYMENTS

The declaration of a “qualified disaster” excludes from a taxpayer’s gross income certain payments to reimburse or pay for expenses related to a qualified disaster (i.e., “qualified disaster relief payments,” or QDRPs). In an employee-employer relationship, compensation is usually considered taxable for the employee and a deductible business expense for the employer.

 

ASSISTANCE THROUGH EXISTING CHARITABLE ORGANIZATIONS

All existing charitable organizations can operate an employee assistance program (EAP) provided they abide by certain provisions and documentation, as described below.

 

Charitable Class

The IRS defines a “charitable class” as “the group of individuals that may properly receive assistance from a tax-exempt charitable organization. A charitable class must be large enough or sufficiently indefinite that the community as a whole, rather than a preselected group of people, benefits when a charity provides assistance.”

 

The IRS adds, “If the group of eligible beneficiaries is limited to a smaller group, such as the employees of a particular employer, the group of persons eligible for assistance must be indefinite. … The proposed relief program must be open-ended and include employees affected by the current disaster and those who may be affected by a future disaster [emphasis added].”

 

Needy or Distressed Test

Eligible beneficiaries must be selected based on an objective determination of need, and the charitable organization must maintain adequate records demonstrating the recipients’ need for the disaster assistance provided.

 

Documentation

As the IRS explains, the documentation should detail:

  • The nature of the assistance provided
  • The costs of providing the assistance
  • Why the aid was given
  • Members of the selection committee approving the assistance
  • Objective criteria for disbursing assistance
  • How the recipients were selected
  • Each recipient’s name and address
  • The amount disbursed to each recipient
  • Any relationship between a recipient and officers, directors or key employees of, or substantial contributors to, the charitable organization

Selection Process

An independent selection committee must choose the recipients, or adequate substitute procedures must be in place to ensure that any benefit to the employer is incidental. The selection committee is considered independent if a majority of its members are not in a position to exercise substantial influence over employer affairs.

 

ASSISTANCE THROUGH EXISTING DONOR ADVISED FUNDS

Certain community foundations and other public charities maintain separate funds or accounts to receive contributions from individual donors. These donors then receive advisory privileges over investment or distribution of the donated funds. These organizations are known as donor advised funds (DAFs).

 

A donor advised fund or account established by an employer to assist in “qualified disasters” can make grants to employees and their family members based on the criteria established for public charities and under the following circumstances:

  • The fund serves the single identified purpose of providing relief from one or more qualified disasters.
  • No payment is made from the fund to or for the benefit of any director, officer or trustee of the sponsoring community foundation or public charity or any members of the fund’s selection committee.

 

ASSISTANCE THROUGH EXISTING UNRELATED EMPLOYEE ASSISTANCE CHARITABLE ORGANIZATIONS

An employee assistance fund (EAF) can be established as a public charity.  An EAF charity is an independent public charity with an exempt mission or purpose to provide emergency, need-based financial assistance to an employer’s workforce. It can maintain its public support requirement under the Internal Revenue Code because it receives donations from a variety of companies and their employees who sign up for their services. Unlike a DAF, an EAF charity can provide assistance to eligible individuals in response to any type of disaster or emergency employee hardship.

 

Using an EAF charity partner provides several benefits to the organization, including:

  • Allows the organization to offer a comprehensive program covering a wide range of financial hardship situations to the company and the employee.
  • Eliminates the administrative burden required to implement and manage an EAF.
  • Allows an objective third party to review applications and approve grants, providing anonymity to the applicant and protecting employees’ private information. This minimizes risk to both employees and the organization.

 

SUMMARY

QDRPs are a very complicated area of tax law. But with the right vehicle and program, an organization can provide much needed relief to employees in times of hardship.

Joseph Giso CPA, MST

Partner

Joe has more than 30 years of experience working with nonprofit organizations in the human services, healthcare, education, and cultural sectors. Joe provides tax consulting services that are dedicated to improving the accountability and efficiency of tax-exempt organizations, including counseling on compliance with federal, state, and local agencies. Additionally, he has expertise in the area of organizational tax and reporting compliance. Joe is a member of the AICPA & MSCPA.