4) Electronic Documents and Records.
a) Electronic documents will be retained as if they were paper documents.
b) Any electronic files, including records of donations made online, that fall into one of the document types on the above schedule will be maintained for the appropriate amount of time.
c) If a user has sufficient reason to keep an email message, the message should be printed in hard copy and kept in the appropriate file or moved to an "archive" computer file folder.
d) Backup and recovery methods will be tested on a regular basis.
5) Emergency Planning.
a) VWS records will be stored in a safe, secure, and accessible manner.
b) Documents and financial files that are essential to keeping the VWS operating in an emergency will be duplicated or backed up at least every week and maintained off site.
6) Document Destruction.
a) The VWS President is responsible for the ongoing process of identifying its records, which have met the required retention period and overseeing their destruction.
b) Destruction of financial and personnel -related documents will be accomplished only by shredding.
c) Document destruction will be suspended immediately, upon any indication of an official investigation or when a lawsuit is filed or appears imminent.
d) Destruction will be reinstated upon conclusion of the investigation.
7) Compliance.
a) Failure on the part of the Board of Directors to follow this policy can result in possible criminal sanctions against the VWS and its members/employees and possible disciplinary action against responsible individuals.
b) The Board of Directors will periodically review these procedures, with legal counsel, and/or a certified public accountant if necessary to ensure that the VWS is in compliance with new or revised regulations.
ARTICLE XV-d
VWS DISCRIMINATION AND HARASSMENT POLICY
1) Purpose.
It is the policy of the VWS to provide and maintain an environment free from all forms of unlawful discrimination and harassment.
2) The Environment of the VWS.
a) By its very nature the environment of the VWS is not a self-contained physical area.
b) The "workplace" of the VWS consists of the time span involved and the various locations where its official activities are held.
§ These activities include: membership meetings; Board of Directors meetings; art shows; fundraising functions; and any other events or programs sponsored by the VWS.
3) Discrimination.
a) Discrimination occurs when an individual is treated unfavorably because of certain qualities or characteristics.
b) Discrimination includes, but is not limited to, an unjust distinction based on race, color, sex, age, religion, national origin, ancestry, sexual orientation, and mental or physical disability.
c) The VWS will not tolerate the use of racial, religious, sexual, gender-based, age-related, ethnic, or disability related epithets, innuendos, slurs, or jokes.
4) Harassment.
a) Harassment occurs when an individual is made the subject of unwanted and unwelcome verbal, nonverbal, or physical contact.
b) Harassment includes, but is not limited to, verbal abuse, threats, physical assault and/ or battery based on race, color, sex, sexual orientation, religion, ancestry, national origin, age, or mental or physical disability.
c) Sexual harassment is any form of unwelcome and unwanted sexual attention.
§ It includes, but is not limited to, unwelcome sexual advances, requests for sexual favors, suggestive or lewd remarks, other verbal and physical conduct of a sexual nature, or the display of offensive materials such as pictures, posters, and computer graphics.
§ It may consist of a single incident, or it may be ongoing.
d) Workplace harassment is against the law, and certainly will not be tolerated by the VWS.
5) Expectations.
a) All VWS members and any employees are expected to conduct themselves in a professional manner befitting the working environment, and with respect for all others.
b) All VWS members and any employees are expected to understand that behavior which one individual considers innocent and harmless may be regarded as harassment by another person.
6) The Process.
a) All incidents and suspected violations should be reported immediately, verbally or in writing, to the President or to any Board member of the VWS, who will then turn them over to the Ethics Committee.
b) Complaints will be kept confidential to the fullest extent possible.
§ An effective investigation cannot be conducted without revealing certain information to the alleged harasser and potential witnesses.
§ Information and records about the allegation of discrimination will be shared only on a need to know basis.
c) An investigation shall be initiated as promptly as practicable after receipt of a complaint.
§ Measures may need to be taken to ensure that further discrimination does not occur.
d) Once all of the evidence is in, interviews are finalized, and credibility issues are resolved, the Committee will make a determination as to whether discrimination occurred.
e) Remedial measures, designed to stop the discrimination, correct its effects on the complainant, and ensure that it does not occur again shall be developed by the Committee.
f) Disciplinary action should be proportional to the seriousness of the offense.
g) The parties shall then be informed of the determination and the corrective action.
7) Additional Considerations.
a) Retaliation for filing a complaint or participating in an investigation is a violation of federal laws.
b) Inaction on the part of the VWS could lead to liability.
c) Legal opinion should be sought whenever thought to be necessary.
d) Legal authority should be contacted when laws have been violated.
§ Sexual harassment and violence or threats of violence in harassment cases is against the law.
ARTICLE XV-e
VWS BOARD RESOLUTIONS POLICY
1) Purpose.
This is a means of establishing and documenting policies as an agenda item at a meeting of the Board of Directors.
2) Procedure at Board Meeting:
a) As an agenda item Include the words "adopt the following policy (ies)".
b) Provide a brief description of the policy (ies) to be discussed.
c) Discuss any general principles or considerations involved in the decision-making process.
d) Any special considerations such as a Board conflict of interest, disclosure of the conflict, withdrawal, and refraining from voting shall be taken note of.
e) After the decision-making process has been concluded, the vote on the resolution can take place.
3) Recordkeeping Shall Include.
a) Date approved.
b) Any special terms involved.
c) The basis for each decision fully and contemporaneously documented.
d) Members present during the debate and those who voted.
e) Any material or data relied on by the Board, and the manner in which it was obtained.
f) Any action by a Board member having a conflict of interest.
4) Variation.
There are countless potential policies that can be brought to resolution, each of which has different circumstances to consider. For this reason the procedural part of this process can be tailored to the needs of the moment. The recordkeeping portion must retain the above six items, but additional information may be added.
ARTICLE XV-f
VWS FINANCIAL TRANSPARENCY POLICY
1) Purpose.
a) Financial transparency and accountability is a very important aspect of a charitable nonprofit organization's public life. The Board of Directors must ensure that the organization's financial resources are used to further its charitable purposes by requiring receipt and review on a regular basis of up-to-date financial statements, Forms 990 series, and audit reports. These documents, among others, are to be made available as information for examination by the interested public.
2) What the VWS Shall File with the IRS.
a) The VWS shall file each year Form 990N, Electronic Notice (e-Postcard) for Tax-exempt Organizations not Required to File Form 990 or 990-EZ, although if it wished to do so, it could elect to file the more complicated Form 990-EZ.
b) As long as its annual gross receipts are below the $25,000 threshold, the VWS is not required to file a return even if the IRS sends it a 990 packet. It is required to file the Form 990N, the e-Postcard.
c) The Form 990N is due by the 15th day of the 5th month after the close of the tax period.
§ The calendar year tax period of the VWS runs from January 1st to December 31st.
§ Therefore the 990N is due on May 15th of each year.
d) The VWS should file a Form 990-T, Exempt Organization Business Income Tax Return if it has $1000 or more of gross receipts from an unrelated trade or business during the year. Net income from income-producing activities is taxable if the activities constitute a trade or business, are regularly carried on, and are not substantially related to the organization's exempt purpose.
e) Income from certain business activities is excepted from the definition of unrelated business income: activities, including fundraisers, that are conducted by volunteer workers, or where donated merchandise is sold; activities conducted for the convenience of members, students, patients or employees; qualified conventions and trade shows; qualified sponsorship activities; and qualified bingo activities.
f) There is a penalty for failure to comply.
§ If the VWS failed to file the Form 990N for three consecutive years, revocation of tax-exempt status would occur as of the filing due date for the third return. Reinstatement may be applied for.
3) Why the VWS Shall Maintain Accurate Financial Records.
a) The VWS shall maintain accurate records to show that it is complying with tax rules and qualifies for tax-exempt status; to evaluate its charitable programs for desired results; to monitor budgetary results and assess whether it has been successful in adhering to budgetary guidelines; to have sufficient financial information to prepare accurate and timely annual financial statements; to prepare annual information and tax returns; to identify sources of receipts; and to substantiate revenues, expenses and deductions for Unrelated Business Income Tax purposes.
b) The books and records of public charities must be available for inspection by the IRS.
4) What Financial Records the VWS Shall Keep.
a) The VWS can choose any recordkeeping system, suited to its activities, that clearly shows the organization's income and expenses.
b) Its books shall include a summary of transactions such as gross receipts, purchases, expenses (other than purchases), any employment taxes, and assets.
c) It shall keep documentation that supports entries in its books, called supporting documents, which are generated by organization transactions such as contributions, purchases, sales, and payroll.
d) For the VWS, being a small organization at this point, the checkbook can be the main documenting source for entries in the books. As it becomes larger it will need more sophisticated ledgers and records.
5) What Accounting Period and Method the VWS Shall Use.
a) Accounting period.
§ An annual accounting period is called a tax year and a tax year is usually twelve consecutive months.
§ The VWS shall use the calendar tax year, a period of twelve consecutive months beginning January 1st and ending December 31st.
b) Accounting method.
§ An accounting method is a set of rules used to determine when and how income and expenses are reported.
§ The VWS shall use the cash method of accounting, in which income is reported in the tax year received, and expenses deducted in the tax year paid.
6) Guidelines for What the VWS Shall Include in its Records Management.
a) Gross receipts.
§ Gross receipts are the amounts received from all sources, including contributions.
§ Supporting documents that show the amount and sources of its gross receipts must be kept.
§ These include: donor correspondence; pledge documents; cash register tapes; bank deposit slips; receipt books; invoices; credit card charge slips; and 1099-MISC, Miscellaneous Income.
b) Purchases.
§ Purchases are items bought, including any items resold to customers/clients.
§ Supporting documents should show the amount paid, and that the amount was for purchases.
§ These include: canceled checks; cash register tapes receipts; credit card sales slips; and invoices.
c) Expenses.
§ Expenses are the costs incurred (other than purchases) to carry on the program.
§ Supporting documents should show the amount paid and the purpose of the expense.
§ These include: canceled checks; cash register tapes; contracts; account statements; credit card sales slips; invoices; and petty cash slips for small cash payments.
d) Assets and liabilities.
§ Assets are the property, such as investments, buildings, furniture, and equipment owned and used.
§ Liabilities reflect the pecuniary obligations.
§ Records must be kept to verify certain information about the assets and liabilities, and should show: when and how the asset was acquired; whether any debt was required to acquire the asset; documents that support mortgages, notes, loans, or other forms of debt; purchase price; cost of any improvements; deductions taken for any depreciation; deductions taken for casualty losses; how the asset was used; when and how the asset was disposed of; selling price; and expenses of sale.
§ These documents include: purchase and sales invoices; canceled checks; and financing documents.
§ If payment is made by check, the statement must show: the check number; amount; payee's name; and date the check amount was posted to the account by the financial institution.
7) How long VWS Financial Records Shall be Kept.
a) The records must be kept for federal tax purposes for as long as they may be needed to document evidence of compliance with the Internal Revenue Code.
b) This means the VWS must keep records that support an item of income or deduction on a return until the statute of limitations for that return runs, generally three years after the date the return is due or filed, whichever is later.
c) Record retention periods vary depending on the types of records and returns. See VWS RECORDS RETENTION AND DESTRUCTION POLICY in the Policy Section at the end of the By-laws.
8) VWS Auditing Procedures.
a) There are three key functions of an audit for a small nonprofit: generating donor confidence; ensuring compliance with accounting standards; and preventing or detecting fraud.
b) An audit is a financial report prepared according to accounting standards.
c) With substantial assets, the IRS recommends an independent audit committee select and oversee an independent auditor, and suggests that smaller charities use volunteers to review financial information.
d) The VWS Treasurer shall prepare a final financial report for the year in a standard accounting format, to be approved by the Board of Directors, and made available to the IRS if requested.
e) Internal financial control by the VWS shall consist of oversight by the Board of Directors.
§ The VWS shall operate in accordance with an annual budget approved by the Board of Directors.
§ The Board shall ensure that financial resources are used to further charitable purposes by regularly reviewing and reading up-to-date financial statements, including any 990 series,
9) How the VWS shall deal with FINANCIAL TRANSPARENCY.
a) The VWS is required to make the following documents available for public inspection and copying upon request and without charge (except for a reasonable charge for copying plus postage).
§ Form 1023, its exemption application, including all documents submitted with the Form, all documents the IRS required to be submitted in support of the application, and the letter of determination issued by the IRS.
§ Annual Information Return, the Form 990N (e-Postcard), which is automatically placed on two website areas by the IRS.
§ There is certain material that is required to be withheld from public inspection, as well as certain disclosures that are required.
b) The IRS recommends, but does not require, that audited financial statements and annual reports be available for public inspection and copying.
§ The VWS shall consider compliance in this area.
c) Documents for public inspection shall be made available on the VWS website.
ARTICLE XV-g
VWS ETHICS POLICY
1) Purpose.
As a matter of fundamental principle, the nonprofit, tax-exempt charitable organization should aspire to the highest ethical standards because it is the proper thing to do. Public trust is the foundation of its very existence. Donors and volunteers support charitable organizations because they trust them to carry out their missions, to be good stewards of their resources, and to uphold rigorous standards of conduct. This trust must be earned each day and in every possible way. The burden is on board members, executive leaders, staff, and volunteers to demonstrate their ongoing commitment to the core values of integrity, honesty, fairness, openness, respect, and responsibility. Adherence to the law is the minimum standard of expected behavior. Charities must do more than simply obey the law, they must embrace the spirit of the law, often going beyond legal requirements and making certain that what they do is matched by what the public understands about what they do. Transparency, openness, and responsiveness to public concerns must be integral to their behavior.
2) Statement of Values.
a) This code of ethics is built on a foundation of widely shared values, including:
i) Commitment to the public good;
ii) Accountability to the public;
iii) Commitment beyond the law;
iv) Respect for the worth and dignity of individuals;
v) Inclusiveness and social justice;
vi) Respect for pluralism and diversity;
vii) Transparency, integrity and honesty;
viii) Responsible stewardship of resources; and
ix) Commitment to excellence and to maintaining the public trust.
3) The Code of Ethics of the VWS.
a) Personal and Professional Integrity.
§ All board members, staff, and volunteers shall act with honesty, integrity and openness in all their dealings as representatives of the VWS.
§ The VWS shall promote a working environment that values respect, fairness and integrity.
b) The VWS has a clearly stated mission and purpose, approved by the board of directors, in pursuit of the public good.
§ All of its programs shall support that mission, and all who work for, or on behalf of the VWS shall understand and shall be loyal to that mission and purpose.
§ The mission shall be responsive to the constituency and to the communities served by the VWS and be of value to society at large.
§ The VWS mission and its application shall be reviewed on a regular basis by the Board of Directors to ascertain that it is functioning in the most optimal manner.
c) Governance.
§ The VWS has an active governing body that shall be responsible for setting the mission and strategic direction of the VWS and shall have oversight of the finances, operations, and policies.
§ The governing body of the VWS (the officers and directors) shall:
(1) Ensure that the Board of Directors has the requisite skills and experience to carry out their duties and that all members understand and fulfill their governance duties acting for the benefit of the VWS and its public purpose;
§ Ensure that each member of the Board of Directors exercises due diligence in order to fulfill her or his duty of care in reviewing transactions, acting in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interest of the VWS;
§ Ensure that each member of the Board of Directors has a duty of loyalty that avoids any conflicts of interest, and that there is a conflict of interest policy present that avoids conflicts of interest or the appearance thereof, or appropriately manages them through disclosure, recusal or other means;
§ Be responsible, if the VWS has employees in the future, for the hiring, firing, and regular review of their performance, as well as ensuring that compensation is reasonable and appropriate;
§ Ensure that the officers and the committee chairpersons provide the governing body with timely and comprehensive information so that the governing body can effectively carry out its duties;
§ Ensure that the VWS conducts all transactions and dealings with integrity and honesty;
§ Ensure that the VWS promotes working relationships between Board members, staff, volunteers, and program beneficiaries that are based on mutual respect, fairness and openness;
§ Ensure, if the VWS has employees in the future, that it is fair and inclusive in its hiring and promotion policies and practices for any Board, staff, and volunteer positions;
§ Ensure that policies of the VWS are in writing, clearly articulated and officially adopted;
§ Ensure that the resources of the VWS are responsibly and prudently managed; and
§ Ensure that the VWS has the capacity to carry out its programs effectively.
d) Legal Compliance.
§ The VWS shall be knowledgeable of and comply with all federal, state, and local laws and regulations that are pertinent to its operations.
§ Legal guidance shall be readily sought and utilized whenever potential or actual legal issues develop.
e) Responsible Stewardship.
§ The VWS shall manage its funds responsibly and prudently with the following considerations:
§ It spends a reasonable percentage of its annual budget on programs in pursuance of its mission;
§ It spends, as necessary, an adequate amount on administrative expenses to ensure effective accounting systems, internal controls, competent staff, and other expenditures critical to professional management;
§ If in the future the VWS compensates staff and any others who may receive compensation, it shall be done reasonably and appropriately;
§ The VWS, in soliciting funds, shall have reasonable fundraising costs, recognizing the variety of factors that affect such fundraising costs;
§ The VWS shall not accumulate operating funds excessively;
§ The VWS shall ensure that all spending practices and policies are fair, reasonable, and appropriate to fulfill its mission; and
§ All financial reports are factually accurate and complete in all material respects.
f) Transparency and Accountability.
See the VWS Transparency and Accountability Policy located in the Policy Section at the end of the By-laws.
g) Program Evaluation.
§ The VWS shall regularly review program effectiveness and develop mechanisms to incorporate lessons learned from its activities into future programs.
§ The VWS shall be responsive to changes in its field of activity and responsive to the needs of its constituencies.
h) Inclusiveness and Diversity.
§ The VWS shall strive to promote inclusiveness and have its staff, Board members, and volunteers reflect diversity in order to enrich the effectiveness of its programs.
§ The VWS shall take meaningful steps to promote inclusiveness in its hiring, retention, promotion, board recruitment and constituencies served.
i) Fundraising.
§ Organizations that raise funds from the public must be truthful and accurate in their solicitation materials, respect privacy concerns of individual donors, expend funds consistent with donor intent, and disclose important and relevant information to potential donors.
§ In raising funds from the public, the VWS shall respect the rights of donors (The Donor Bill of Rights):
a. To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
b. To be informed of the identity of those serving on the organization's governing Board, and to expect the Board to exercise prudent judgment in its stewardship responsibilities.
c. To have access to the organization's most recent financial statements.
d. To be assured their gifts will be used for the purposes for which they were given.
e. To receive appropriate acknowledgement and recognition.
f. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
g. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
h. To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
i. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
j. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.
j) In raising funds from the public, the VWS shall embrace key precepts adopted from the Code of Ethical Principles and Standards of Professional Practice endorsed by the National Association of Fundraising Executives. The VWS shall:
§ Ensure that fundraising activities reflect a commitment to ethical activities and embrace these concepts as an overriding principle of fundraising activities.
§ b. Respect the privacy and freedom of choice of interest of all affected through fundraising activities and will keep donor information confidential. Donors will be asked if they want their gifts acknowledged in a newsletter or other literature or on the website. Major donors will have gifts listed in 990 which is filed with the IRS and is available on the website.
§ Disclose all relationships which might constitute, or appear to constitute, a conflict of interest.
§ Not disclose privileged information to any unauthorized party and will keep all information confidential.
§ Ensure all solicitation materials accurately and correctly reflect its mission and its intended use of solicited funds.
§ To the best of its ability, ensure all contributions are used in accordance with the donors' intentions.
§ Accurately report the use and management of funds, as well as information regarding the organization's revenues and sources. The VWS shall receive explicit consent by donors or their representatives before altering the conditions of their gifts.
§ Comply with all applicable local, state, federal, civil and criminal regulations and statutes in its fundraising activities.
§ Make available to a donor requesting both program and financial information with regard to fundraising activity, information including, but not limited to, fee-for-service programs and related and unrelated business ventures.
§ Maintain segregated accounts for restricted funds.
4) The VWS Ethics Committee.
a) Ethics Committee, Composition and Functions.
Most ethics issues arise as a result of inappropriate activities on the part of a member(s) of the Board of Directors such as conflicts of interest, inurement, and excessive benefits among others. Other issues will arise as breaches of ethics or allegations of misconduct in fundraising activities, from whistle blowing, discrimination, and harassment among others.
§ For this reason it is considered appropriate, providing a sense of impartiality, and independent scrutiny, to have the VWS Ethics Committee separated from the Board of Directors.
§ The Committee shall stand alone, but be directly responsible for keeping the Board of Directors informed of all business conducted.
§ The Committee shall be chaired by a senior (preferably) non-Director from the membership, responsible for the VWS ethics program.
§ The Committee shall consist of three or five voting members, with the option for nonvoting visiting or temporary members when special expertise is needed regarding ethical or operational issues.
§ A majority vote shall be sufficient for binding action.
§ The Committee shall meet on an as-needed basis, following breaches of the ethics policy or allegations of misconduct, providing contemporaneous minutes for the Board of Directors.
§ The Committee shall meet at least once annually, providing contemporaneous meeting minutes to go to the Board of Directors, and shall contribute a review of issues, activities and performance as an annual report.
§ Complaints shall be addressed directly to the chairperson of the Ethics Committee, preferably in writing, and signed by the complainant, although anonymous complaints will be considered equally.
§ After receipt of the complaint, the chairperson shall call a meeting of the Committee for the purpose of considering all available material, interview those involved, and arrive at a decision that can be passed on to the Board of Directors. The process may involve one or more meetings.
§ The Board of Directors shall give the Committee authority to seek any information it requires in order to carry out its work effectively.
§ Decisions of the Committee may include, but not be limited to: no action needed; a letter of reprimand; removal from the Board of Directors; expulsion from the VWS; and referral to an appropriate law enforcement agency. Legal counsel may be sought whenever it appears to be necessary.
§ It is important that the Committee be sensitive to Board level policy and strategy decisions.
b) Ethics Committee Standards of Behavior for VWS Shows/Exhibitions.
The following standards were developed in response to inappropriate behavior related to shows.
c) Gallery rules pertaining to frames, mats, delivery and pickup times, subject matter, sales commissions, and other specific requests are not to be disputed.
d) Gallery owner and juror decisions as to paintings chosen to be in a show must be accepted without complaint or adverse comment.
e) Telephone calls and other communications to jurors, gallery owners, or VWS officers and directors to complain will not be tolerated.
f) Necessary contact regarding specifics of a show must be made only with the assigned show coordinator for that show.
g) Failure to respect the artwork of others, within and without the VWS, in the form of disparaging comments or attitudes is prohibited.
h) VWS rules must be adhered to. Any member feeling that a rule needs revision, or that there is an exception in her/his case, may bring a request to the Ethics Committee for consideration, if it cannot first be resolved by the President of the VWS.
i) Incidents not specifically covered in the above standards that are detrimental to the VWS or to a member, may be brought to the Ethics Committee for resolution as an ethics issue.
j) The mechanism for filing a complaint shall be in writing and signed by the complainant, although it may be done anonymously, and presented to the chairperson of the Ethics Committee for resolution.
ARTICLE XV-h
VWS TRANSPARENCY AND ACCOUNTABILITY POLICY.
1) Purpose.
Although the Internal Revenue Code does not require that charities have governance, management, and disclosure policies, the Internal Revenue Service (IRS) will review an organization's application for exemption and annual information returns to determine whether it has implemented such policies, feeling that these policies generally improve tax compliance.
2) General Principles.
a) The IRS is of the opinion that the absence of appropriate policies and procedures may lead to opportunities for excess benefit transactions, inurement, operation for non-exempt purposes, or other activities inconsistent with exempt status.
b) The IRS encourages every charity to make its Form 1023 exemption application, letter of determination, Form 990, Form 990T, Form 990-EZ, governing documents, conflict of interest policy, financial statements, and annual reports, complete and accurate, available for public inspection on its public website and made available on request.
c) The IRS good governance recommendations have teeth, requiring that nonprofit charities when filing the new IRS Form 990 disclose their governance practices.
d) Charities that file a Form 990 showing weak governance practices will be more likely to face audits, and if audited, should expect stricter scrutiny.
e) Good governance policies that the IRS will want to see include: Conflicts of Interest Policy; Whistleblower Policy; Document Retention and Destruction Policy; Joint Venture Policy; Ethics Policy; Gift Acceptance Policy; Investment Policy; and Expense Reimbursement Policy.
f) Good governance procedures that the IRS will want to see include: Governing Board Independence; Executive Compensation; Minutes of Meetings; and Financial Transparency.
3) VWS Transparency and Accountability.
a) While making full and accurate information, to include its mission, its activities, its finances, and its governance publicly available, the VWS shall provide transparency and accountability to its members, the public, and the media.
b) All financial, organizational, and program reports shall be complete and accurate in all material respects.
c) All solicitation materials shall accurately represent VWS policies and practices, and shall reflect the dignity of program beneficiaries.
d) Information to be made public shall be placed on the VWS website, kept current, and monitored for its appropriateness.
e) The VWS shall be responsive in a timely manner to reasonable requests for information.
f) By the nature and the structure of the VWS, it has been concluded that at this time, there is no need to include: Joint Venture Policy; Investment Policy; or Expense Reimbursement Policy.
4) Accessibility of Information to the Public Sector.
a) Documents required by the IRS to be made available to the public, and those recommended to be available, shall be found on the VWS website, and copies shall be provided upon reasonable request, although they will be available as copies printed directly from the website.
b) Documents that are required to be available:
§ Form 1023 with its supporting documents and letter of determination; and
§ The Form 990 series, of which the VWS will electronically file Form 990N (e-Postcard).
c) Documents that are recommended to be available:
§ Audited financial statements, and annual reports; and
§ Conflict of interest policy, whistleblower policy and document retention and destruction policy.
5) Maintaining a Balance with Transparency and Accountability.
a) While complying with these recommendations from the IRS, the Board of Directors shall balance the goal of transparency and accountability with the duty of confidentiality that it owes to the VWS and its clients and ensure that sensitive information is not revealed, inadvertently or otherwise, that could conflict with the overall best interests of the VWS, its members, its clients and the public.
b) Posting financial statements may not always be prudent.
c) Sensitive portions of Board meetings may be held in closed session, and that portion omitted from the public place.
ARTICLE XV-i
VWS MATERIAL DIVERSION OF ASSETS POLICY
1) Purpose.
The IRS has expressed concern with increasing evidence of abuse, such as embezzlement and financial impropriety, within the tax-exempt sector, and by the failure of the sector to fully appreciate the extent to which such abuse has emerged in recent years. Because of this concern for potential abuse, the IRS is interested in organizational efforts to prevent, and if necessary, respond to any instances of abuse.
2) IRS Form 990.
a) The IRS added this question to its new Form 990 (Return of Organization Exempt From Income Tax), Part VI, Section A, Line 5. "Did the organization become aware during the year of a material diversion of the organization's assets?"
b) This question is intended to collect information from organizations that become aware of such a diversion and to allow them to describe the related circumstances and any corrective actions adopted in response to the diversion.
c) The need for this public explanation of the material diversion of a nonprofit's assets could well cause boards to handle such situations more aggressively.
3) Diversion of Assets.
a) This includes any unauthorized conversion or use of the organization's assets other than for authorized purposes, including, but not limited to an embezzlement or theft.
b) A diversion of assets may in some cases constitute inurement of the organization's net earnings. It may also be an excess benefit transaction taxable under Section 4958 and reportable in Schedule L of Forms 990 and 990-EZ.
c) The materiality threshold is set sufficiently high to exclude some common types of cash misappropriations and non-extraordinary expense account abuse, however.
4) The VWS and Material Diversion.
a) The Board of Directors of the VWS shall be ever vigilant and through constant oversight of its assets, mainly in the form of funds, be sensitive of any material diversion.
b) A material diversion participated in by VWS officers, directors, employees, members, volunteers, independent contractors, or any other person, even if not associated with the VWS other than by the diversion, when discovered, must be reported to the VWS Ethics Committee immediately.
c) Question 5, Section A, of Part VI of Form 990, or Form 990-EZ, will be answered each year with the filing of the form.
§ For the present the VWS will be filing Form 990N (e-Postcard).
d) If the answer to the question is "Yes" then an explanation shall follow in Schedule O, to include:
§ The nature of the diversion;
§ The monetary amounts or the property involved;
§ Corrective actions taken to address the matter; and
§ The pertinent circumstances.
e) The person or persons who diverted the assets should not be identified by name in Schedule O.
ARTICLE XV-j
VWS FUNDRAISING POLICY
1) Purpose.
The essence of fundraising requires that it be accomplished in a candid way that ensures honesty, truthfulness, and accuracy. It requires that fundraising solicitations meet federal and state law requirements and that the solicitation materials are accurate, truthful and sincere.
Meticulous record keeping is essential. Ethical standards and a Donor's Bill of Rights are important. There is a duty of care to oversee funds that are entrusted to the VWS in such a way that no funds are diverted from the organization's tax-exempt purpose of being an educational resource in the world of art.
2) Solicitations.
a) Fundraising Methods Shall Be Limited To:
b) Appeals for Financial Support.
§ These will be accomplished primarily through personal and telephone solicitation.
§ In the future solicitation may be done utilizing the US Mail, email, and website, as well as foundation grant solicitation and government grant solicitation.
c) Money Raising Events, to include, but not be restricted to the following.
§ Art auctions and silent auctions;
§ A semi-annual book sale and exchange, to include CD's, DVD's and videos;
§ Art workshops; and
§ Art fairs, "paint outs", and similar community events.
3) Sponsorship.
The VWS may solicit/accept sponsorships from for-profit or nonprofit organizations in order to advance the mission of the VWS, enhance program effectiveness, or extend member services consistent with its mission and values.
a) Mutual consideration roughly equal to the market value of the sponsorship usually will be expected from the VWS by the sponsor.
b) Sponsorships may be solicited by the VWS for events, programs, projects, or operations.
c) All sponsorships shall be approved by the board of directors of the VWS.
4) Fund Raising Methods the VWS Shall NOT Utilize:
a) Vehicle, boat, airplane or similar donations;
b) Real property donations (with possible exception);
c) Accepting donations on the VWS website;
d) Receiving donations from another organization's website;
e) Hiring others to do fundraising on behalf of the VWS; and
f) Engaging in fundraising for other organizations.
5) Solicitation Materials and Other Communications Addressed to VWS Donors and the General Public.
a) Shall clearly identify the VWS, and be accurate and truthful, as this is often a donor's only contact with the VWS.
b) Shall be clear and accurate to help potential contributors contact the VWS and obtain information.
c) The VWS shall provide the donor with information that she/he has a need and a right to know:
§ The name of anyone soliciting contributions;
§ The name and location of the organization that will receive the contribution;
§ A clear description of the activities;
§ The intended use of the funds to be raised;
§ A contact for obtaining additional information; and
§ Whether the individual requesting the contribution is acting as a volunteer, employee of the organization, or hired solicitor.
d) The VWS shall keep descriptions of its program activities and its financial condition current and accurate. Any references to past activities or events of the VWS should be dated appropriately.
e) The VWS shall clearly indicate in its solicitations, when it occurs, that it has been recognized as eligible to receive tax-deductible contributions and how donors may obtain proof of that status.
f) The VWS shall post a copy of its IRS letter of determination on its website.
g) If the VWS promises any goods or services to the donor in exchange for contributions, the materials shall clearly indicate the portion of the contribution (that is, the value of any goods or services provided) that is not tax deductible.
6) Donations (Gifts).
a) Donations must be used for purposes consistent with the donor's intent, whether as described in the relevant solicitation materials or as specifically directed by the donor.
§ The VWS shall honor the donor's right to expect that the funds will be used as promised.
§ Solicitations of the VWS shall indicate whether the funds they generate will be used to further the general programs and operations of the VWS or to support specific programs or types of programs.
§ A donor may indicate to the VWS in a letter, a written note on the solicitation, or a personal conversation with the solicitor or official of the VWS how she/he expects the donation to be used.
§ The VWS may not receive sufficient donations to proceed with a given project or it may receive more donations than it needs to carry out that project. In such a case the VWS, if unable or unwilling to use the donation as stated in its appeal or in the donor's communication, has an obligation to contact the donor and request permission to apply the donation to another purpose or offer to return the donation.
§ The VWS, through its board of directors, shall carefully review the terms of any contract or grant agreement before accepting a donation.
§ If the VWS is unable or unwilling to comply with any of the terms requested by a donor, it shall negotiate any necessary changes prior to concluding the transaction.
§ In the case of substantial donations, the VWS shall develop an agreement that specifies any rights it may have to modify the terms of the donation if circumstances warrant.
b) Cash Donations (Gifts).
§ Cash donations are accepted by the VWS.
§ A donor may specify which VWS program will receive the donation.
§ IRS Regulations on the Substantiation of Cash Donations that the VWS will adhere to:
(1) The IRS requires that donors donating $250 or more in cash or by check acquire written substantiation of their charitable donations from the recipient organization. The IRS may disallow the deduction of a donor of an unsubstantiated donation.
(2) The IRS generally considers separate payments from the same donor as separate donations and will not combine them to determine whether the $250 threshold has been reached.
(3) For a donation of $250 or more, the IRS does not consider a canceled check to be adequate substantiation.
(4) The IRS places the responsibility for obtaining substantiation on the donor, but in order to maintain good will on the part of donors, and to avoid time-consuming research by the VWS to verify donations, the VWS will provide a written donation acknowledgement to the donor as soon as the donation is received.
(5) A written donation acknowledgment by the VWS Shall:
o Indicate the amount of the donation, and
o Either indicate the fair market value of any goods or services provided to the donor, or state that no goods or services have been provided.
o To indicate the fair market value of any goods or services provided, a good faith estimate of the normal cost of such goods or services will be made by the VWS.
c) Non-cash Donations (Gifts).
§ Non-cash donations are accepted with discretion by the VWS, if they directly benefit one of the VWS programs. An example would be a donation of art supplies from an individual or an art supply store, which could be passed on to a program.
§ Written donation acknowledgement is to be provided for non-cash donations just as for cash donations:
(1) The donor, in this case, must provide written documentation of the value of the donated item(s) in order that a written receipt may be given by the VWS.
(2) If the donor received any tangible goods or services in return, the value of the goods or services is to be specified by the VWS in writing. The donor's qualified deduction is then the amount donated less the value of the goods or services received.
d) Disclosure of Goods and Services.
§ When the VWS provides goods or services to a donor in exchange for a charitable donation in excess of $75 in cash or by check, it will as required by the IRS, give the donor a written disclosure statement that :
§ Provides a good faith estimate of the value (normal cost) of the goods or services provided; and
(1) Informs the donor of the amount of the donation that is tax- deductible (the donation minus the value of the goods or services).
§ This disclosure statement shall be made by the VWS when the donation is solicited or when it is received and shall be provided in a manner that is reasonably likely to come to the attention of the donor, as in a separate document, rather than in small print that is part of a larger document.
§ The IRS places the obligation on the recipient organization (the VWS) to provide the disclosure, regardless of whether the donor requests it.
§ A disclosure of the value of goods and services is not required of the VWS if:
(2) The donor receives only token goods or services, such as a pen or a coffee mug; or
(3) The transaction involves the purchase of goods or services at a typical fair market value. An example of this is the sale of a T-shirt for the purposes of fundraising, at a market cost including a normal profit margin.
7) Acknowledgements and Information.
a) A charitable organization must provide donors with specific acknowledgements of charitable donations, in accordance with IRS requirements, as well as information to facilitate the donor's compliance with tax law requirements. See also Cash Donations and Non-cash Donations above.
§ Realizing that written acknowledgments help in building donor confidence in and support for the activities they help to fund, the VWS shall provide written acknowledgements in a timely manner, as soon as a donation is received.
§ The VWS shall provide receipts for cash donations if requested.
§ If the VWS has provided goods or services to the donor in exchange for, or recognition of, the donation, the acknowledgement must include a good faith estimate of the fair market value of those goods or services, that is, the amount the donor would have to pay to purchase those goods and services independently. It should be noted that the cost of an item to the VWS does not determine the fair market value, although cost may be an important factor.
§ The VWS does not need to include information on fair market value in a donor acknowledgement if that value is not more than 2% of the contribution or $89, whichever is less.
8) Policy on Gifts (Donations).
a) A charitable organization should adopt clear policies, based on its specific exempt purpose, to determine whether accepting a specific donation would compromise its ethics, financial circumstances, program focus or other interests. Some charitable donations may have the potential to create significant problems for the VWS or a donor that the VWS shall be aware of:
§ Knowingly or not, a donor may ask the VWS disburse funds for illegal or unethical purposes;
§ Some types of corporate sponsorships or interests may result in unrelated business income for VWS; and
§ A donor may face adverse tax consequences if the VWS is unable to use an accepted donation of property (real or personal) in fulfilling its mission and must instead sell or otherwise dispose of the property soon after the donation is received. The VWS will not deal with real property, except in special circumstances.
9) Disposition of Funds Raised by the VWS.
a) Proceeds obtained from fund raising programs are the life-blood of the VWS while carrying out its mission. There is a fiduciary duty on the part of the Board of Directors to maintain strict control over these funds such that no funds are diverted from the charitable goals of the VWS.
§ All funds collected from fundraising activities will be deposited in a bank checking and/or savings account(s) separate from all other VWS accounts.
§ Accounting records for fundraising income and expenditures will be kept separate from any other VWS accounting records.
§ Funds raised will be allotted and distributed to the appropriate charitable programs in a timely and orderly manner, with the expectation that the bank account(s) will not accumulate excessive amounts.
§ The VWS shall not maintain a separate account for a contributor under which the contributor has the right to advise as to the use or distribution of funds.
10) Training and Supervision of Solicitors/Fundraisers.
a) A charitable organization should provide appropriate training and supervision of the people soliciting funds on its behalf to ensure that they understand their responsibilities and applicable federal, state and local laws, and do not employ techniques that are coercive, intimidating, or intended to harass potential donors.
§ The VWS shall provide appropriate training and supervision of its solicitors.
(1) The VWS may be legally responsible when those who solicit on their behalf engage in illegal or fraudulent practices, and therefore ensuring that fundraising is conducted in a lawful and honest manner is essential.
(2) An excellent reason for careful training and supervision is the fact that the solicitor is often a potential donor's first, and sometimes only, direct contact with the VWS.
(3) The VWS shall ensure that its solicitors/fundraisers are trained to:
o Be respectful of a donor's concerns;
o Not use coercive or abusive language or strategies to secure contributions;
o Not misuse personal information about potential donors;
o Not pursue personal relationships which are subject to misinterpretation by potential donors; and
o Not mislead potential donors in other ways.
§ The VWS shall ensure that all who solicit/fundraise will have the following information provided to them:
(1) The VWS's name, address and contact information;
(2) Clear materials and instructions on what information to provide to prospective donors;
(3) How the prospective donor can learn more about the VWS;
(4) The purposes for which the donations will be used;
(5) Whether all or part of the donation may be tax deductible;
(6) That they should refrain from giving specific legal, financial and tax advice to the prospective donor;
(7) That when such questions arise the prospective donor should be encouraged to consult their own legal counsel or other professional advisors before finalizing a contribution; and
(8) Who the donor can contact for further information.
11) Compensation for Fundraising.
a) A charitable organization should not compensate internal or external fundraisers based on a commission or a percentage of the amount raised.
b) The VWS shall use internal fundraisers, from membership volunteers, and there will be no compensation provided.
c) If it becomes necessary for the VWS to compensate for fundraising activities, the following concepts shall apply:
§ Compensation shall reflect the skill, effort, and time expended by the individual or firm on behalf of the VWS;
§ Compensation based on a percentage of the amount of money raised shall not be utilized as it may encourage fundraisers to put their own interests ahead of the VWS or the donor and may lead to techniques that jeopardize the values and reputation of the VWS and lead to loss of donor trust; and
§ If a bonus is provided to an employee for exceptional work in fundraising, this shall be clearly based on the quality of work performed, not on the percentage of the funds raised.
12) Privacy in Fundraising.
a) A charitable organization should respect the privacy of individual donors and except where disclosure is required by law, should not sell or otherwise make available the names and contact information of its donors without providing them an opportunity at least once a year to opt out of the use of their names.
§ In preserving the trust and support of donors, the VWS requires that donor information be handled with respect and confidentiality to the maximum extent permitted by law.
§ The VWS shall disclose to donors whether and how their names may be used, and provide all donors at the time a contribution is made, an easy way to indicate that they do not wish their names or contact information to be shared outside of the VWS.
§ The VWS shall also provide a means for donors and others who receive such materials to request that their names be deleted from similar mailings, faxes, or electronic communications in the future.
§ Upon request the VWS shall remove a donor's name from any lists.
§ The VWS shall ensure that at least once a year donors are provided with information about how they may request that their names and contact information not be shared outside the VWS.
§ If the VWS uses its website to gather personal information from donors and other visitors, the website shall have a privacy policy, easily accessible, that informs visitors to the site what information, if any, is being collected about them, how the information will be used, how to inform the VWS if the visitor does not wish personal information shared outside the VWS, and what security measures the VWS has in place to protect personal information.
b) VWS Privacy Policy for Fundraising.
§ The VWS:
(1) Does not sell donor information;
(2) Does not provide without the donor's consent, their information to organizations or individuals outside of the VWS;
(3) Holds strictly confidential all information concerning donors or prospects, including names, addresses, names of beneficiaries, nature and value of estates, amounts or provisions or gifts, and other similar information;
(4) May use selective information for purposes of referral, testimonial, example, recognition or publicity only if a donor or prospect grants permission;
(5) Educates its employees/ volunteers on the importance of protecting the privacy and security of confidential personal and VWS information;
(6) Shall use its best efforts to comply with the expressed wishes of any donor who does not want her/his name used in any promotional material, wishes her/his name removed from solicitation lists, or wishes to have her/his gift(s) or service(s) be anonymous; and
(7) Shall collect, use and share information about donors and prospects within the VWS only, on a need-to-know basis and for the sole purpose of carrying out the mission of the VWS.
13) The Donor Bill of Rights.
The Donor Bill of Rights was created by the Association of Fundraising Professionals (AFP), the Association for Healthcare Philanthropy (AHP), the Council for Advancement and Support of Education (CASE), and the Giving Institute: Leading Consultants to Non-Profits. It has been endorsed by numerous organizations.
a) To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
b) To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
c) To have access to the organization's most recent financial statements.
d) To be assured their gifts will be used for the purposes for which they were given.
e) To receive appropriate acknowledgement and recognition.
f) To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
g) To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
h) To be informed whether those seeking donation are volunteers, employees of the organization or hired solicitors.
i) To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
j) To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.
14) Ethical Standards.
The VWS embraces the Code of Ethical Principles and Standards of Professional Practice endorsed by the National Association of Fundraising Executives. Key concepts adopted by the VWS include the following.
a) VWS fundraising activities reflect a commitment to ethical activities and embrace these concepts as an overriding principle of fundraising activities.
b) VWS respects the privacy and freedom of choice of interest of all affected through fundraising activities and will keep donor information confidential. Donors will be asked if they want their gifts acknowledged in a newsletter or other literature or on the website. Major donors will have gifts listed in Form 990 which is filed with the IRS and is available on the website.
c) VWS will disclose all relationships which might constitute or appear to constitute a conflict of interest.
d) VWS will not disclose privileged information to any unauthorized party and will keep all information confidential.
e) VWS will ensure that all solicitation materials accurately and correctly reflect its mission and its intended use of solicited funds.
f) VWS shall, to the best of its ability, ensure all contributions are used in accordance with the donors' intentions.
g) VWS will accurately report the use and management of funds, as well as information regarding its revenues and sources. VWS will receive explicit consent by donors or their representatives before altering the conditions of their gifts.
h) VWS will comply with all applicable local, state, federal, civil, and criminal regulations and statutes in its fundraising activities.
i) VWS will make available to a donor requesting both program and financial information with regard to fundraising activity, information including, but not limited to, fee for service programs and related and unrelated business ventures.
j) VWS will maintain segregated accounts for restricted funds.
ARTICLE XV-k
VWS COMPENSATION POLICY, INCLUDING EXECUTIVE COMPENSATION
1) Purpose.
The IRS desire is that charitable tax-exempt organizations follow the Intermediate Sanction Rules when establishing compensation for directors, officers, and key employees. At present the VWS provides no compensation for officers or directors, and has no employees, but that may change with the advent of an executive director and paid employees at some time in the future.
a) General.
§ The term compensation as used here shall include reasonable compensation for services provided by officers, directors, employees, and the VWS membership.
§ Reasonable compensation is that amount that would ordinarily be paid for like services, by like organizations under like circumstances as of the date the compensation arrangement is made.
§ Reimbursement for direct expenses by officers, directors, employees, volunteers and the VWS membership shall be paid when suitable receipts and/or substantiation are provided. This is not compensation.
§ No compensation will be allowed which exceeds the value of the services rendered in conducting the day to day operations of the VWS, or for direct reimbursement, to individuals, independent contractors, or organizations.
b) The VWS at present.
§ For service on the VWS board of directors, to include officers and directors, there shall be no compensation, consistent with the IRS statement that charities normally should not pay directors for board service.
§ Reimbursement of direct expenses incurred while serving on the board of directors shall be provided by the VWS when accompanied by suitable receipts and/or substantiation.
c) The VWS of the future.
§ Significant Growth.
(1) In the event that significant growth of the VWS occurs, and it becomes apparent that a paid executive director and/or other key employee(s) would be beneficial, then reasonable Executive Compensation becomes important. Salary or wages, deferred compensation, retirement benefits, fringe benefits, and bonuses must be considered
(2) Being prudent, the VWS shall take steps to establish reasonable compensation amounts before entering into any compensation agreement with an officer, director, or other insider.
2) IRS positions to be aware of:
a) A charity may not pay more than reasonable compensation for services rendered;
b) The compensation of officers, directors, key employees and others in a position to exercise substantial influence over the affairs of the charity should be determined by persons who are knowledgeable in compensation matters and who have no financial interest in the determination; and
c) The process used to determine this compensation must include review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision.
d) These positions collectively are a part of what is known as the Intermediate Sanctions Rules.
3) The Intermediate Sanctions Rules.
a) These rules/regulations impose penalties on what the IRS considers excess-benefit transactions.
b) The IRS will review the structure of the salary or compensation plan to determine whether the payment reflects fair market value or competitive market price.
c) The IRS encourages a charity to rely on the Rebuttable Presumption of Reasonableness test when determining compensation of its executives:
§ Compensation payments are presumed to be reasonable if the compensation arrangement is approved in advance by an authorized body composed entirely of individuals who do not have a conflict of interest with respect to the arrangement.
§ The authorized body obtained and relied on appropriate data as to comparability prior to making its determination.
§ The authorized body adequately documented the basis for its determination concurrently with making the determination.
d) The IRS will generally use a "facts and circumstances" approach if an organization does not satisfy the Rebuttal Presumption of Reasonableness test because it is impossible or impractical to fully implement each step of that process.
e) The Rebuttable Presumption of Reasonableness steps shall be followed by the VWS whenever establishing compensation for its directors, officers, key employees, and employees and others in a position to exercise substantial influence over the affairs of the VWS:
§ Knowledgeable.
1) The compensation shall be determined by persons who are knowledgeable in compensation matters and who have no financial interest in the determination.
ARTICLE XV-l
VWS WHISTLEBLOWER POLICY
1) Purpose.
This VWS Whistleblower Policy is intended to encourage board members, staff (paid and volunteer) and the membership to report suspected or actual occurrence(s) of illegal, unethical or inappropriate events, behaviors, or practices without retribution.
2) General.
The VWS expects its directors, officers, employees, volunteers, and membership to observe high standards of business and personal ethics in the conduct of their duties and responsibilities, while practicing honesty and integrity in fulfilling those responsibilities and complying with all applicable laws and regulations.
3) Reporting Responsibility.
It is the responsibility of all directors, officers, employees, volunteers, and members of the VWS to report wrongful conduct in accordance with this Whistleblower Policy. Under this policy, it is a disciplinary issue for any of the above persons to know of wrongful misconduct and stay silent.
4) Wrongful Conduct.
a) Wrongful conduct is defined herein to include: serious violation of VWS organizational policy; violation of applicable state and federal law; or the use of VWS funds, property, resources, or authority for personal gain, or other non VWS related purpose except as provided under VWS policy.
b) This definition of wrongful conduct is not intended to be an exclusive listing of the illegal or improper activity encompassed by the Whistleblower policy. Rather the Whistleblower Policy is intended to serve as a means of reporting all serious improprieties that potentially impact the integrity and effective operation of the VWS.
c) The individual who reports the wrongful conduct is, in this By-law section, called the whistleblower.
5) No Retaliation.
a) No director, officer, employee, volunteer, or member of the VWS who in good faith reports a violation or a suspected violation of this policy shall suffer harassment, retaliation, or adverse employment/membership consequence.
b) Any director, officer, employee, volunteer, or member who retaliates against anyone who has reported wrongful conduct in good faith is subject to discipline up to and including removal from office, removal from the Board of Directors, removal from being committee chair, termination of employment, or expulsion from the VWS.
c) This policy is intended to encourage and enable individuals within the VWS to raise serious concerns prior to seeking resolution outside of the organization.
6) Reporting Violations.
a) Wrongful conduct may be reported by any officer, director, employee, volunteer, or member. The event(s) can be reported with her/his identity or anonymously.
b) Reporting of suspected or actual wrongful conduct is to be made to the President of the VWS in writing. If the President of the VWS is implicated in the wrongful conduct, or if the reporting individual is not comfortable speaking with or not satisfied with the response of the President, the issue may be reported to any member of the Board of Directors.
c) The President, and any Board of Directors member to whom suspected or actual wrongful conduct is reported are required to immediately advise the full Board of Directors of such wrongful conduct.
d) Crimes against person and property, such as assault, rape, burglary, etc., should immediately be reported to local law enforcement personnel.
7) Acting in Good Faith.
a) Anyone filing a complaint of wrongful conduct must be acting in good faith and have reasonable grounds for believing the information disclosed indicates wrongful conduct.
b) Anyone who makes a report that is not done in good faith is subject to discipline including being terminated from holding office, being a director, being a committee chair, being an employee, dismissal from the VWS, or other legal means to protect the reputation of the VWS, its officers, directors, employees, volunteers, and its membership.
c) Any allegations that prove not to be substantiated and which prove to have been made maliciously or knowingly to be false will be viewed as a serious disciplinary offense.
8) Confidentiality.
a) Reports of wrongful conduct or suspected wrongful conduct may be submitted on a confidential basis by the complainant or may be submitted anonymously.
b) Reports of wrongful conduct or suspected wrongful conduct will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation within the VWS, or the need for investigation by law enforcement, in which case members of the VWS will be subject to subpoena.
9) Handling of Reported Wrongful Conduct.
a) A representative of the Board of Directors will notify the sender of the report and acknowledge receipt of the reported wrongful conduct or suspected wrongful conduct within five business days, unless the report was submitted anonymously.
b) All reports will be promptly investigated, a decision made, and appropriate corrective action will be taken if warranted by the investigation.
c) A representative of the board of directors will notify the sender of the report of the decision or resolution of the Board of Directors in writing, as soon as the decision or resolution has been determined.
d) If the investigation of a report, that was done in good faith and investigated by internal personnel, is not to the satisfaction of the person reporting the event(s), that is the whistleblower, then she or he has the right to report the event(s) to the appropriate legal or investigative agency.
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