Building Stronger Communities Building Stronger Choruses Chorus Management

Building Stronger Communities, Building Stronger Choruses Chorus Management Bootcamp

Chorus Management Bootcamp Agenda q Organization Basics - getting the paperwork right from the start q Board of Directors – can’t live with them; can’t live without them q Personnel – managing staff and volunteers effectively q Finance – we must have money, we still have checks! q Marketing – doing more with less q Licensing – copying music is stealing!

Chorus Management Bootcamp 1. 2. 3. 4. Articles of Incorporation Bylaws Federal Tax Identification Number IRS Tax Exempt Status Organization Basics

Chorus Management Bootcamp Most choruses choose to incorporate as nonprofits in the state in which they are located. The paperwork to incorporate is very simple and can be located on your state’s web site. If you have a lawyer or accountant in your chorus they can easily prepare the paperwork. This is also a good time to make sure you understand the obligations of a nonprofit in your state. Most states have an agency charged with oversight of charitable organizations many of which have registration and annual reporting requirements.

Chorus Management Bootcamp Bylaws are the ruling documents of an organization. Bylaws are critical, because they tell the board how to conduct its business. Bylaws should set forth the basic structure and abilities of the board, define the officer roles, set meeting requirements, etc. There are examples of chorus bylaws on the GALA Choruses web site at http: //www. galachoruses. org/resources/sample_documents. html. Once your bylaws have been drafted and approved it is a good idea to review them every few years and make certain they still reflect the way the organization is operating. Read more: http: //non-profitgovernance. suite 101. com/article. cfm/how_to_write_bylaws_for_nonprofits

Chorus Management Bootcamp Your next step is to apply for an Employer Identification Number. Even if you do not anticipate having any employees, you will most likely want to apply for an EIN.

Chorus Management Bootcamp Your next big step is completing the application for tax exempt status under the Internal Revenue Code – commonly referred to as your 501(c)(3) determination letter. Achieving tax exempt status is the key to both your income being non taxable and for your donors to be able to deduct their contributions. While the form itself can be daunting the IRS has several tools to help you through the paperwork including Publication 4220 pictured here. Once you have familiarized yourself with the process you can tackle Form 1023. There is also a helpful web site at www. Form 1023 Help. com that provides plain language assistance in completing the form.

Chorus Management Bootcamp 1. Duties of a Board 2. Governance Models 3. Individual Board Member Responsibilities Building Your Board of Directors

Chorus Management Bootcamp Duty of Obedience The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.

Chorus Management Bootcamp Duty of Loyalty The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization

Chorus Management Bootcamp Duty of Obedience The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.

Chorus Management Bootcamp What is a governance model? Framework for relationships Between Board and Staff Between Board and Community Between Board members • Provides boundaries and focus for scope of work of board and staff • Provides a process for board and staff to address organizational issues

Chorus Management Bootcamp Governance Board • Usually includes non-singers • Still has fundraising duties • Not hands-on day-to-day Working Board • Usually comprised of mostly singers • Involved with details of chorus mgmt. • Typical starting place for new groups

Chorus Management Bootcamp

Chorus Management Bootcamp

Chorus Management Bootcamp 1. Job Descriptions 2. Evaluations 3. Contracts Personnel

Chorus Management Bootcamp Current job descriptions should be maintained for all staff positions whether they are filled by paid staff or volunteers. Having current job descriptions which are reviewed with the individual performing that job function makes sure that all parties have a clear understanding of the job’s requirements and reporting relationship. Example job descriptions for a wide variety of positions are included on the GALA web site including: • Artistic Directors • Accompanists • Executive Directors • Producer

Chorus Management Bootcamp Evaluations of job performance on at least an annual basis are critical in providing constructive feedback and assisting in professional development. There are many styles of performance evaluations. At a minimum, input should be sought from Board members, and, where appropriate, singers. The evaluation should be closely tied to the job description and to any specific goals set for the year. The evaluation should be conducted by the supervisor for the position. Examples of performance evaluations are available on the GALA web site.

Chorus Management Bootcamp Many choruses choose to use contracts to document their employment agreement with their paid staff. Contracts can be very helpful in clarifying responsibilities of both parties, compensation, term of employment, etc. An example of contract for an artistic director is included on the GALA web site.

Chorus Management Bootcamp 1. 2. 3. 4. 5. Accounting Budgeting Insurance Employees vs. Independent Contractors Reporting Finance

Chorus Management Bootcamp There are many good accounting software packages available for maintaining the books of your chorus. Quickbooks is one of the best and the basic package can be purchased for less than $200. Quickbooks is very intuitive. A non-financial person can be taught the basics quickly by someone in your chorus with accounting skills.

Chorus Management Bootcamp The key to a good Quickbooks application is to start with a good chart of accounts. The following is a very simple chart of accounts for a chorus balance sheet.

Chorus Management Bootcamp It is important to understand the difference between permanently restricted, temporarily restricted and unrestricted net assets. Temporarily Restricted Net Assets - The part of the net assets of a not-for-profit organization resulting from contributions and other inflows of assets whose use by the organization is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the organization pursuant to those stipulations Permanently Restricted Net Assets - The part of the net assets of a not-for-profit organization resulting from contributions and other inflows of assets whose use by the organization is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of the organization Unrestricted Net Assets - The part of net assets of a not-for-profit organization that is neither permanently restricted nor temporally restricted by donor-imposed stipulations.

Chorus Management Bootcamp This is an example of income accounts that may be appropriate. Structuring your accounts to align with grant reporting requirements can save significant time in completing those grant reports and budget requirements.

Chorus Management Bootcamp The same is true for the account listing for expense accounts. Not only does a good chart of accounts support grant writing but it also makes financial reports to the Board a snap.

Chorus Management Bootcamp Every chorus should have an annual operating budget that describes in dollars how the chorus is going to achieve its current year goals.

The supporting budget for an individual concert might look something like this. The budget can be input into Quickbooks so that budget vs. actual reports can be generated automatically.

Chorus Management Bootcamp Insurance There are several types of insurance your chorus needs to consider carrying. If the chorus has any employees you will need to carry workers compensation insurance following the requirements of your specific state. All choruses should carry commercial general liability insurance to cover them for liability for injuries at chorus-sponsored events, damage to rented facilities, etc. You should expect the annual premium for this type of coverage to run ~ $500. As your chorus Board develops and you bring in non-singers you will want to consider Directors and Officers Liability insurance. As you try to recruit experienced business people to join your Board you will find that they require this type of insurance be in place. The annual premium for this type of coverage will run around $800.

Chorus Management Bootcamp Different types of workers require different types of treatment under the Internal Revenue Code (the Code). So, to understand your 501(c)(3)’s tax obligations to its workers, you have to figure out what types of workers your organization has—employees, independent contractors (IC), or volunteers. The key to classifying these workers is to understand the significant characteristics that distinguish them from each other. First let’s talk about the characteristics of an employee. For Federal tax purposes, a worker is an “employee” if the employer has the right to direct and control the way the worker performs his or her job. Put another way, an employer has the right to tell an employee not only what needs to be done, but also how it needs to be done.

Chorus Management Bootcamp Profile of an Independent Contractor (IC) ICs are self-employed and carry on an independent trade or business. They have a high degree of autonomy—or independence. A 501(c)(3) using the services of an IC has some right to direct or instruct this type of worker, but less than in the case of an employee. You could say the employer has the right to tell an IC what needs to be done, but not how to do it. The answer: Always look to the relationship between the organization and the worker, paying special attention to two key factors: your 501(c)(3)’s right to direct and control the worker, which would point to employee status; and the worker’s autonomy, or independence, which would point to IC status. What’s the impact if you are wrong? You owe back taxes on the compensation paid to individuals you treated as independent contractors who should have been paid as employees.

Chorus Management Bootcamp

Chorus Management Bootcamp Email marketing makes it possible to stay in contact with your audience at a very low cost. There are several excellent sessions during conference on low cost marketing opportunities. Saturday 3: 30 to 5: 30 Sunday 9: 00 to 11: 15 E-Marketing for Budgets under $50, 000 New Marketing Techniques for 2009 Marketing

Chorus Management Bootcamp The owner of a copyrighted work has the exclusive right to reproduce, distribute, publicly perform, display and adapt the copyrighted work. This includes the right to authorize or refuse to authorize others to exercise those rights. For choruses this means purchasing copies of sheet music rather than making copies, paying ASCAP and or BMI or performance rights, obtaining the rights to record a song when a CD is produced and obtaining synch rights when music is included in a video. Licensing

Chorus Management Bootcamp You may notice, there is a difference between the composer, arrangers, publisher, distributor, dealer, and copyright holder. The composer writes the music (e. g. John Williams). The arranger alters the music a bit (Paul Lavender). The publisher prints the sheet music (Hal Leonard). The distributor (Hal Leonard) gets the music to public directly or through a music dealer (e. g. JW Pepper). The copyright holder can be any one of these people. That’s why the copyright holder is listed on the front page of printed music.

Chorus Management Bootcamp

Chorus Management Bootcamp For works under copyright, you may not reproduce the printed product in any form without the express written permission of the copyright holder. Sheet music is to be purchased from music houses such as JW Pepper, Shawnee Press, etc. Your chorus’ music library is a valuable asset of the chorus. Under no circumstances should your chorus be using copied music.

Chorus Management Bootcamp It is also necessary to pay a license fee for the right to perform copywritten music. You must obtain a license from ASCAP or BMI. It is possible to purchase per-work licenses but most organizations find it more convenient to pay a modest blanket fee. These fees are distributed by ASCAP and BMI to the composers and publishers. Your chorus should set up an account with ASCAP and or BMI and submit regular quarterly reports.

Chorus Management Bootcamp Without written permission from the copyright holder, it is never allowable to make an arrangement of any music from one genre to another- ever.

Chorus Management Bootcamp

Chorus Management Bootcamp If your chorus decides to produce a recording, you must obtain mechanical rights for each song to be included on the recording. A mechanical right is the right to record and distribute a song. Mechanical rights or a mechanical license must be obtained in order to lawfully make and distribute records, CD's and tapes. Recording rights for most music publishers can be obtained from The Harry Fox Agency 205 East 42 nd Street New York, New York 10017 212 -370 -5330 http: //www. nmpa. org/hfa. html

Chorus Management Bootcamp If your chorus chooses to produce a video which includes music a synch license is required. A Synchronization License allows the user to reproduce a musical composition "in connection with" or "in timed relation with" a visual image, e. g. , motion picture, video, advertising commercial. The widespread posting of chorus performance videos on You. Tube has caused significant concerns about possible copyright violations. We would not advise a chorus to post video of music performances without having a synch license.