Board orientation manual
The Free Geek Board Orientation Manual
Welcome to Free Geek!
Congratulations! If you are reading this, you have likely just been elected to the Free Geek Board of Directors. Being a Board member (Director) is both challenging and rewarding, so we appreciate your interest in our organization. As you should know by now (but in case you don’t), Free Geek is a 501(c)(3) charitable organization. We serve our community by promoting access to technology through recycling and education. Specifically, our mission statement is: to recycle technology and provide access to computers, the internet, education, and job skills in exchange for community service. As a Board Member, you are responsible for helping Free Geek fulfill its mission in a way that reflects the values of our organization.
At Free Geek, we place a heavy emphasis on giving all individuals the respect and dignity they deserve. We run our organization in a way that attempts to embody this ideal, and utilize collaboration and consensus as means to achieve our mission. With this in mind Free Geek welcomes you to the Board! We are glad to have you as part of our team, and look forward improving the community together.
Introduction
The Board of Directors is perhaps the most important element of any nonprofit organization. Frequently, the success or failure of an organization depends on the skill and dedication of its Board members. As a Director, you will be responsible for providing governance, oversight, operational support to Free Geek. You may also be given the great responsibility of representing the organization. Nonprofits are frequently judged on the character of their boards, and Free Geek is no exception. Accordingly, as a Director you must do your utmost to fulfill the mission of Free Geek with diligence and integrity.
Although being a Director is a very important position, many of us do not have experience serving as one. That is why this manual was created. This document highlights the critical elements of being a Director at Free Geek, including:
- Your legal and fiduciary duties
- Your obligations to Free Geek
- How the organization operates
- How the Board of Directors Functions
- The values and culture of the organization
Additionally, as you may have noticed, key terms and concepts will be highlighted in bold throughout this manual. You should familiarize yourself with these concepts, as they will be important to work as a Board member. Most of the terms will be self-explanatory, but a list of critical terms will be provided in the appendix of this guide.
While the work performed by the Board is critically important to the organization, this does not preclude the Board from having fun! Being a Director is an extremely satisfying experience, and provides you with the opportunity to participate actively in an organization that plays an important role in our community. There will always be challenges in governing an organization, but being a Director will provide you with the satisfaction of knowing you have made a difference in the lives of many.
What It Means to Be a 501(c)(3) Nonprofit
As was previously stated, Free Geek is a 501(c)(3) organization. This means that Free Geek operates as a charity in the purest sense of the term. No one “owns” the organization; rather the organization exists solely for promoting the public good. Accordingly, certain restrictions apply to the ways in which we can operate. One major restriction is that all of Free Geek’s revenues must be re-invested in the organization. While employees can be paid, their compensation cannot be exorbitant. Similarly, unlike the Directors of private for-profit corporations, Board Members at Free Geek cannot be paid.
Another restriction that comes with being a 501(c)(3) organization comes in the form of political advocacy or lobbying. Free Geek is allowed to engage in limited forms of political advocacy, but cannot advocate for a particular candidate or party. Rather, lobbying should be limited strictly to issues relevant to our mission. As an example, Free Geek could (and does) lobby directly for or against changes to Oregon’s e-Cycle Legislation, but not a candidate who is seeking to change it. So, if you are thinking about engaging in a political campaign, be very careful. Make sure that you have clearly dissociated yourself from the organization, and that you are not speaking on its behalf.
In summary, Free Geek’s 501(c)(3) designation means that we exist to serve the community through education and recycling. Any changes to this purpose must be carefully considered, as they can have a tremendous impact on the organization’s ability to function. Loss of 501(c)(3) status can be devastating to a charity, so be careful!
Our Programs
Free Geek has a wide variety of programs aimed at a wide variety of people. However, our programs are closely connected to the mission of the organization, and largely revolve around education and reuse.
The most popular program (with the greatest number of volunteers) is the Adoption program. The idea behind the program is quite simple: volunteer at Free Geek for 24 hours, and get a free refurbished computer, all the accessories, and the training to use them. Within the Adoption program there are many areas for volunteers to work. Generally speaking, there is no “skill” required in the adoption program, in that little or no training is required to participate. Most of the work done by Adoption Volunteers facilitates the recycling of unsalvageable electronic waste.
The second major program Free Geek offers is the Build program (referred to simply as “Build”). Whereas the Adoption program primarily caters to individuals who would simply like a free computer, the Build program is considerably more involved. In this program, we teach volunteers how to build computers, from start to finish. It is a multi-stage program, with each stage increasing in difficulty. Once the volunteer has built a certain number of computers, they can build one more computer to take home.
If a volunteer wishes to continue volunteering after they have completed the build program, they have several “post-build” options. Laptop Build allows volunteers to work on Laptops, which are typically more difficult to refurbish than desktops. Mac Build is similar to Laptop build, in that it is a technically more complex variant of the Build program. Finally, there is Advanced Testing, where volunteers analyze various components that are used to refurbish our machines.
In addition to Free Geek’s various recycling and refurbishing programs, we offer a wide variety of internships and educational programs. The organization maintains a steady pool of interns, who assist in almost every area of operation. As well, we regularly offer classes to both volunteers and the general public. Classes change frequently, but range from introductory computing courses to Free/Open Source Software programming classes.
We multiply the good that refurbished technology can do in the community by supporting other community and nonprofit organizations through our hardware grants program. Through this program, many local organizations have been able to put more of their budgets toward their missions instead of technology, and provide services to their target populations that they might not otherwise have been able to.
Free Geek also operates a thrift store. Here, we sell some of the computers we refurbish, and other equipment that is not needed for the adoption programs. The proceeds from the thrift store fund our other areas of operation, and usually provide the majority of Free Geek’s funding.
Free Geek also operates other programs, which may be temporary or exploratory. Contact a staff member if you have further questions about any of our programs.
Legal Responsibilities
NOTE: This section is NOT intended to supplement or replace the advice of an attorney. If you have a question or concern about the legality of a decision or policy, consult a lawyer.
As a Free Geek Board Member, you share ultimate legal responsibility for the organization. The Board of Directors has the final say in all legal matters facing Free Geek. Accordingly, it is your duty to ensure that the organization is run in accordance with local, state, and federal law.
One of the primary legal concerns facing a nonprofit organization is keeping in compliance with various tax laws. In particular, the Board must take care to file Form 990 with the IRS on an annual basis. Although Free Geek does not pay taxes, it must file the 990 in order to demonstrate that it should retain its Tax-exempt 501(c)(3) status. Although Form 990 need not be signed by the Board, the Board is responsible for reviewing the form and ensuring that an authorized staff member sign the return. And, just as the Board must oversee the completion of Form 990, it must also ensure that Form CT-12 is filed with Oregon Department of Justice. While CT-12 is essentially the state version of Form 990, this does not lessen its significance. Failure to file either return on time can result in significant penalties.
Another significant legal issue facing Board members involves personal and organizational liability in the event of a problem or incident. If an incident were to occur in which liability needed to be assigned, there are laws governing how this would take place. Generally speaking, Directors at Free Geek cannot be held personally liable for the actions taken by the organization, unless those actions were determined to be the result of gross negligence on the part of the Board. If Free Geek was the target of a lawsuit, the organization could be forced to pay damages, but not the Directors themselves. However, it is important to note that there are some exceptions to this rule.
The first exception comes if a Director has agreed to assume liability on behalf of an organization. This is generally a bad idea, so do not do this without first consulting an attorney. Pay particular attention to any leases, loans, or other promissory documents signed by the organization; some documents contain clauses which make Directors personally liable for the organization’s debts.
Another exception arises if a Director was found to have a conflict of interest, and act against the best interests of Free Geek. In other words, if you feel you may encounter a potential conflict of interest, you should immediately recuse yourself from the decision-making process, and alert your fellow Board Members. We try to make sure that this does not surprise us by keeping a declaration of each board member's conflict of interest statement on file, but situations change, so keep this in mind as new business comes up.
Finally, perhaps most important exception to the liability rule is if the Board (or one of its members) has failed to act with due care in governing the organization. The concept of due care can be difficult to pin down, but the following steps should prevent most problems:
- Ensure all government forms and documents are completed accurately and promptly.
- Ensure all taxes are paid (just because an organization is tax-exempt does not exclude it from paying certain taxes such as payroll, social security, etc.)
- Keep accurate minutes detailing Board meetings, and the decisions that are reached.
- Ensure that policies are in place to handle situations that could give rise to a lawsuit (such as sexual harassment, discrimination, dangerous working conditions, etc.)
Ultimately, the best way to protect the Board (as well as Free Geek) from liability is to use your common sense. If a decision or policy seems unusual or “just doesn’t smell right,” contact an attorney or your fellow Board Members. As long the organization is run in a prudent manner and in good faith, the Board will usually be protected from personal liability for the organization's problems.
Fiduciary Responsibilities
While ensuring compliance with state and federal law is perhaps the most important job of a Director, monitoring the organization’s financial health could be considered equally as critical. As a Board Member, you will be responsible for making sure that Free Geek remains solvent. An organization that has disorganized finances will not be able to carry out the mission to the best of its ability. Accordingly, the Board must remain informed of Free Geek’s financial situation at all times. Importantly, the government automatically assumes that the Board is knowledgeable about the organization’s financial condition, so it is your job as a director to stay informed! Perhaps the best way to stay informed is to carefully review all financial documents published by the organization. As a Director, you cannot be denied access to financial documents for any reason, so don’t be afraid to ask for them.
At Free Geek, perhaps the most important piece of financial information you will come in contact with the annual budget. As a Director, you will not only be responsible for reviewing the budget, by actively voting to enact it (or by voting against it if you feel there is cause). The budget is essentially a document that outlines the organization’s priorities in financial terms. If a program is important, then it is important to provide it with a comparatively high level of funding; if not, then perhaps the money can be better spent somewhere else. It is important to understand that the budget is a forward-looking document. This means that the budget presents a plan for the next fiscal year, and is not a picture of past transactions.
The budget is not the only important financial document you should be familiar with. While the budget looks to the future, the Balance Sheet will reflect the organization’s current financial health. While it may look confusing, the Balance Sheet simply shows how much wealth (money and property) the organization has, and how much money the organization owes.
Within the Balance Sheet there will be a more detailed breakdown of assets and liabilities, but the part that is perhaps the most important to focus on is the proverbial “bottom line.” If the total assets and liabilities is a positive number, that means the organization has more money than debt. Keep in mind, this is a simplistic explanation meant to help those unfamiliar with nonprofit accounting, so consult an accountant or fellow Board Member if you have further questions.
It is important to note that just because expenses exceed income does not necessarily spell disaster. Just like every organization, Free Geek will have strong quarters and weak quarters. Similarly, large investments or expenditures can skew a Balance sheet. As a Board Member, your attention should be focused on trends and patterns within financial documents. A one-time quarterly loss may not be much of a problem; but if Free Geek is consistently losing money, then the Board must act to ensure that the organization regains its financial footing and plan for more sustainable spending and funding in the future.
Organizational Responsibilities
Just as you have an obligation to obey the law and monitor Free Geek’s financial health, Board Members also have the responsibility to abide by Free Geek’s rules and policies. One piece of policy should you already be familiar with is the New Director Agreement, which is essentially the "job description" of all board members. As Director, you should have read and signed this document. While this manual will not go into the specifics of the agreement, as a Director you will be expected to participate in the civic life of Free Geek, uphold the values of the organization (particularly relating to the consensus process), and remain active in the governance process by attending board functions to the best of your ability.
How the Board Functions
Free Geek takes tremendous pride in the way we operate. Unlike many organizations, which may reach decisions based on majority vote or executive fiat, Free Geek seeks to govern using formal consensus. In this process, the Board will discuss a proposal; after identifying potential areas of disagreement, the Board will discuss what changes would need to be made in order for everyone to support an agreement. Once an agreement can be reached the board moves forward and adopts the proposal.
One of the concerns people raise regarding consensus relates to the potential ability of an individual Director to stall the process by refusing to consent to a proposal. The concern is that a lone director could stubbornly refuse to consent to a decision, regardless of whether or not their position has any actual merit. Our version of Formal Consensus deals with this issue by asserting that an individual who is withholding consent must present a rational, well articulated objection to the proposal in question. If an individual is simply being stubborn or uncooperative, then they have abandoned the principle of dealing in good faith that is crucial to the consensus process. At this point the Director in question should be asked to reconsider their position; and if they refuse to do so, then should be asked if they are willing to stand aside on the decision.
Having now established how Free Geek engages in decision making, it is important to discuss some other operational elements of the Board. The board’s membership is comprised of two main types of Director. Volunteer representatives are elected by Free Geek’s volunteers, while other Directors are elected by the board itself. Board-elected directors represent interests that are related to our mission (such as the environment), possess technical skills needed by the organization (such as legal or financial expertise), or represent client populations who may not be represented among the core volunteers (such as adoption volunteers or equipment donors).
Another operational element of the Board is its meeting schedule. The board typically meets once a month, although a meeting could be called in the interim (assuming the meeting is held in the accordance with our bylaws). As a Board member, you should strive to attend all of these meetings; a lack of participation not only creates stagnation in the governance process, but can lead to problems down the road if important issues continually fail to be addressed. The Board needs a certain number of Directors present in order to reach a quorum, so it is essential to notify your fellow Board Members if you cannot attend a meeting (a meeting without quorum can discuss issues but not make binding decisions for the organization).
There are several standing committees of the board, and all members are expected to participate in one, according to their interests and skills. These committees act as working groups and cannot make decisions for the board, but often make recommendations.
Communications
Free Geek uses technological communications heavily! As a board member, you will find that email communication is very important, and should make a point to be prompt and clear in your email. The board has an email list, which is open only to current directors and collective-level staff. The archives of this list are a valuable resource; they are only available to list members. [The email list structure is about to change; you will be notified.]
There is another email list you will want to monitor; this is the organization's minutes list, which receives minutes from all groups within the organization, from the board and its committees to the various staff committees. This is not a discussion list, so traffic is relatively low, but lots of good information goes through it. This list is publicly archived, in accordance with our value of transparency.
For documents that are being collaboratively written or edited, the wiki is our medium of choice. It's also a jumbleshop of organizational history.
Bylaws
As is the case with every nonprofit, Free Geek is governed by a set of bylaws. The bylaws serve as the “constitution” of an organization, and state what can and cannot be done. Bylaws can be changed by the Board at any time, assuming proper notice has been given and that the changes comply with the law. Proposed bylaw changes should be considered carefully, as they can have a tremendous impact on how the organization functions. Any changes made to the bylaws should typically be reviewed by someone with legal expertise prior to their enactment.
Our current bylaws can be found on the wiki at http://wiki.freegeek.org/index.php/Bylaws.
Conclusion
This manual is intended to help new Board Members familiarize themselves with their new position. Being a Director can be extremely fulfilling, but requires hard work and dedication. While this document seeks to make the Director’s job easier, it is no substitute for the qualified opinion of lawyers, accountants, fundraisers, and other professionals. So, if you have further questions, you should seek assistance from someone who works in the appropriate field.
Should you have further, but slightly less critical questions concerning your role and responsibilities as a Director, another useful resource is the Nonprofit Association of Oregon. This organization provides assistance to nonprofits of every shape and size, and can provide valuable insight regarding issues facing Free Geek.
Thank you for joining Free Geek!
List of Terms & Definitions
- 501(c)(3)
- This is an IRS designation reserved for certain types of charitable organizations. In effect, it exempts Free Geek from certain taxes (such as corporate income tax), and allows individuals to receive tax deductions when making charitable contributions to the organization. For further clarification, speak with an accountant or tax attorney.
- Board of Directors
- The board of directors is the legally designated body in charge of running a nonprofit (broadly construed).
- Board member/Director
- A member of the Board of Directors.
- Bylaws
- A codified set of rules that has been officially adopted by the Board. The bylaws govern the organization, and determine what it can and cannot do. Bylaws can be changed by the Board, but always must comply with actual (local, state, and federal) laws.
- e-Cycle Legislation
- This is a law passed in Oregon which governs the recycling of electronic waste. Companies that produce certain electronic appliances pay the state fees to cover the costs of disposing the devices they create. Free Geek is part of the e-Cycle program, and must therefore accept certain donated devices free of charge. For the full language of the law, refer to ORS 459A.300-.365.
- Free/Open Source Software (F/OSS)
- Open-source software is software which has had its source code made publicly available. This allows any developer to alter the source code, and submit modifications to the copyright holder (or use the modified program for their own private enjoyment). F/OSS is typically free of charge, and does not seek to profit from the creation of the
software. Examples of widely used F/OSS are Linux, Firefox, and Open Office.
- Mission Statement
- The statement (usually a sentence) that describes the purpose of the organization. The mission statement is incorporated in the organization’s bylaws.
- Quorum
- The minimum number of Directors required to reach a decision. If too many board members fail to attend a meeting, then decisions cannot be reached because they would be unrepresentative of the Board as a whole.