Guest post by Judy Barrett Miller, Public Policy Consultant, YMCA of the USA

"What's Catching Fire at the State Level," caught my attention at Independent Sector's 2012 Public Policy Action Institute in San Francisco. Interesting perspectives were shared through the lens of what state legislatures are looking at, the regulators view of what's taking place and what needs further scrutiny, and the trends and impact seen from a national nonprofit organization. 
 
The National Council of State Legislatures' Tim Story, sees 2013 as a time when many state legislature's will return to some fiscal stability and have the capacity to restore their "rainy day funds." At the same time, many others will still be mired in debt of historic proportions and the nonprofit sector will be expected to provide more, and without dwindling state and federal government support. He remains hopeful that the "hyper partisanship" seen over the past several years may potentially lesson with fewer divided states, allowing for a more streamlined process to accomplish the work at hand.
 
California State Attorney General's Office, Belinda Johns of their Charitable Trust Division, said it is the role of their office and counterparts throughout the country, to look for effective ways to protect charitable assets and the members of the public as contributors, and at the heart of that effort should be well educated and trained boards of directors who must clearly understand their fiduciary responsibility. Issues such as executive compensation, need to come into check by boards that understand they must justify compensation by due diligence, using tools such as comparative compensation studies and in the end, define and defend "what is reasonable" for the size of the organization and the duties of the executive.
 
Angela Williams, senior ice president and chief counsel at YMCA of the USA, added that Y-USA has embraced Independent Sector's 33 Principles of Good Governance and Ethical Practice and those are part of a robust training and leadership program provided to Y's throughout the country. While all three speakers agreed that the nonprofit sector as a whole suffers from the small percentage bad actors, Angela said the key is for the sector to do an effective job of educating the public and policy makers combined with documenting our impact through telling our community benefit story, especially important in light of the trend of municipalities and states considering taxing the sector or imposing payments in lieu of taxes PILOTs, at a time when nonprofits are being asked to do more with less.