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☛ OPHC has nonprofit status revoked 8-30-14

Posted by on Aug 30, 2014 in BREAKING NEWS, COW HORSE NEWS, CUTTING NEWS, INDUSTRY NEWS, REINING NEWS, WHO, WHAT & WHERE | 6 comments

OKLAHOMA PAINT HORSE CLUB’S BY-LAWS SAY THEY’RE A NON-PROFIT

 

THE IRS SAYS THEY’RE NOT

 

By Glory Ann Kurtz
Aug. 30, 2014
They were on the list of the American Paint Horse Association’s (APHA) President’s Gold Star Club, due to their “outstanding level of service they provided for members and their communities, while promoting the American Paint Horse through club activities and sponsorships. Only five APHA Regional Clubs worldwide are recognized for “Club of Distinction” status and three as Honorable Mention. The Oklahoma Paint Horse Club (OPHC) was one of those three associations who received an Honorable Mention in 2014.

 

However, recently, I received a packet of information pertaining to the Oklahoma Paint Horse Club (OPHC), a club sanctioned by the American Paint Horse Association (APHA), an international non-profit breed association located in Fort Worth, Texas. When I opened the packet, I realized the anonymous source had precisely unveiled a very concise historical outline of alleged corruption, lawlessness and opportunistic behavior among specific members of this association.

 

One of the anonymous source’s greatest concerns was the willful and deliberate “advertising for and solicitation of” donations by the OPHC, under the guise of it being a legal nonprofit when, in fact, it had lost this coveted Internal Revenue Service (IRS) distinction.  Essentially, the anonymous source had outlined a very well orchestrated plan of deception used to “hood wink” unsuspecting donors into believing any donation of any type or kind would be tax deductible in accordance with applicable tax law.

 

The main concern of any investigative journalist is to verify this type of information in order to bring credence to the topic before dissemination in a news release. I discovered a copy of the association’s by-laws from 2004 through 2013 and suggested by-laws for 2014. The first paragraph of all of the articles of incorporation and by-laws specifically and unequivocally state the following:

 

“Section 1. Club shall be known as the OKLAHOMA PAINT HORSE CLUB, INC., and at all times be operated and conducted as a non-profit club in accordance with the laws of the State of Oklahoma, and at no time shall such club operate so as to inure to the direct or pecuniary benefit of any individual or individual member. The Oklahoma Paint Horse Club shall encompass the State of Oklahoma with the state boundaries being the Club’s boundaries.”

 

VERIFYING THE INFORMATION:

To begin my verification process, I called the Oklahoma Secretary of State who revealed that the Oklahoma Paint Horse Club was organized as a “Domestic Not For Profit Corporation” in their Articles of Incorporation on Feb. 19, 1966.

 

It was interesting to note that when I searched the Oklahoma Secretary of State’s data base, for the Oklahoma Paint Horse Club (OPHC) another organization, the Greater Oklahoma Paint Horse Club (GOPHC), came up on the same screen listed with the Oklahoma Secretary of State as a For-Profit Business Corporation created on May 26, 2006.

Click for Oklahoma Secretary of State files>>

 

However, when I furthered my verification process by checking social media listings, Facebook.com revealed the “For Profit” Greater Oklahoma Paint Horse Club has a business listing page identifying them as a “Nonprofit Organization!”

 

Click for Facebook posting by GOPHC as a nonprofit>>

 

I next contacted Guidestar.org, a public information database provided by the Internal Revenue Service (IRS), pertaining to nonprofit IRS 990 tax filings. Upon entering the name of the Oklahoma Paint Horse Club into the system’s search database, Guidestar.org did not return any IRS 990 tax filings on behalf of the Oklahoma Paint Horse Club. There also were no IRS 990 tax filings on behalf of the Greater Oklahoma Paint Horse Club, which can only lend credence to the fact that their representation as a legal nonprofit on Facebook is deceptive and erroneous in nature.

 

I next e-mailed Guidestar.org, requesting any tax filing information on the Oklahoma Paint Horse Club, as well as verification on whether or not this entity ever had a nonprofit status or if the status had been revoked. The reply from Guidestar.org was astonishing! I was informed the association’s nonprofit status was revoked in 2012 for failure to file taxes for three consecutive years in a row.

 

Click for e-mail from Guidestar.org>>

 

However, further verification directed me to another section of Guidestar.org, with the Oklahoma Paint Horse Club coming up, stating “This organization has not appeared in IRS records for a number of months and may no longer exist. This organization’s exempt status was automatically revoked by the IRS for failure to file a Form 990, 990-EZ, 990-N, or 990-PF for 3 consecutive years. Further investigation and due diligence are warranted.”   This information verified the allegations supplied by the anonymous source as factual.

 

It also gave the years from which the IRS Forms 990 had been filed with the IRS as well as links to them. The years were 2004, 2005 and 2011

 

The IRS 990 for 2011, signed by Mike Short, President, on May 15, 2012 had total revenue of $166,804 with $163,614 coming from “Show Fees.” Total expenses were $157,860, with the largest expense being “Other” for $47,455. Other expenses were arena rental, $46,399; show prizes and awards $28,649 and National Office fees $19,004. There is a loss of $19,822 for the year with assets or fund balances of $22,726.

 

Click for 2011 OPHC iRS 990>>

 

The 2004 and 2005 IRS 990s were signed by Pauline Parsons, Secretary-Treasurer of the OPHC. The 2004 IRS 990 showed total revenue of $87,345, with $71,041 coming from shows, $3,276 Youth, $5,663 Amateur and $2,700 Hospitality. Expenses totaled $85,431 and included Program Services – not individually listed – totaling $80,223, and management and general $5,208, for a profit of $1,914. Net assets or fund balance at the end of the year totaled $57,782.

 

Click for 2004 IRS 990>>

 

The 2005 IRS 990 showed total revenue of $69,336. All of the income was called “related or exempt function income,” with the only items identified being $2,955 for membership dues or assessments and interest on savings, temporary cash investments $73 and $13 for Medicare and Medicaid payments. Total expenses were $62,594, resulting in a $6,742 profit. Net assets or fund balances at the end of the year were $64,524.

 

Click for 2005 IRS 990>>

 

My source’s additional concern involved the submission of by-laws to the American Paint Horse Association by members of OPHC, stating that the Oklahoma Paint Horse Club was, in fact, a nonprofit organization. They were, in fact, providing false or fraudulent documents to the APHA. The President of the Oklahoma Paint Horse Club, Mike Short, Guthrie, Okla., had signed their by-laws and sent them to the American Paint Horse Association. The information received from Guidestar.org, pertaining to the loss of their nonprofit status, substantiated that concern.

 

According to the APHA web site, Short is a member of the APHA Executive Committee and is in line to become President of the APHA. He is also an APHA judge and as such has agreed to uphold the rules of the Association. I have been informed that in a situation of this nature, the Internal Revenue Service (IRS) would have notified the OPHC of the loss of its nonprofit status immediately following the nonprofit revocation.

 

Prior to Mr. Short signing and submitting the by-laws to the APHA; a requirement of APHA, the OPHC by-laws were submitted by their prior six-term President Kevin Hardcastle, Owasso, Okla., who is also a National Director of the APHA and the Chairman for many years of The Holiday Classic Horse Show, a very large and profitable Paint Horse show sanctioned by the APHA. He is also the person who allegedly said the “financial records were lost” when they attempted to regain their nonprofit status. According to my source, Hardcastle is also heavily involved with the basically defunct Greater Oklahoma Paint Horse Club (GOPHC).

 

There are two other APHA National Directors from the OPHC, including Brad Perkins, Thomas, Okla., and Jerry Butler, Guthrie, Okla., along with Alternate Dean Myers.

 

Click for APHA Board of Directors>>

Click for APHA Executive Committee>>

 

Also, it was reported in a 2011 APHA press release that Kevin Hardcastle became the chairman of the APHA Therapeutic Riding Program after he donated $25,000 to the APHA from the Oklahoma Paint Horse Club to start a therapeutic riding fund.

 

APHA receives $25,000 from Hardcastle>>

Click for information on Kevin Hardcastle>>

 

OPHC WEB SITE:

Following is a link to the OPHC web site prior to when I started investigating the OPHC. They changed the front page of the web site just after they discovered I was writing an article on them.

Click for OLD OPHC web site>>

Click for NEW OPHC web site>>

 

CURRENT OPHC OFFICERS & BOARD MEMBERS:

OPHC officers include Mike Short, President; Jarrod Rees, Vice President; Jo Long,Secretary; Treasurer, Tonya Gralla; Past President Kevin Hardcastle and Co-Youth Director Kathi Sappington. OPHC Board members currently include Stella Biller, El Reno, Okla; Todd Gralla, Norman, OK; Dean Myers, Crescent, Okla; Hardcastle; Tonya Gralla, Norman, Okla. and Kathi Sappington, Mustang, Okla.

 

Click for Oklahoma Paint Horse Club officers>>

 

INDIVIDUALS INVOLVED WITH MORE THAN ONE ASSOCIATION:

The above links reveal that the Oklahoma Paint Horse Club’s president, Mike Short is also a Vice President of the American Paint Horse Association (APHA). Kevin Hardcastle is also an (APHA) director, as well as being heavily involved with the running of the Greater Oklahoma Paint Horse Club – the for-profit association whose listing on facebook.com identifies this club as a nonprofit organization.

 

 

Jo Long, Sapulpa, Okla., is the secretary of both the Oklahoma Paint Horse Club and the Greater Oklahoma Paint Horse Club and is also the web master for both clubs. She is also paid by the association to manage several horse shows and horse barns, including the Holiday Classic, one of the largest APHA-sanctioned shows in the country, produced by both Clubs. It is not known if these paid jobs were sent out for bids, as they should have been since Long is an officer of the not-for-profit OPHC.

 Click for Greater Oklahoma Paint Horse Club web site>>

Click for Facebook posting of GOPHC>>

 

 

It is also not known how the individuals were paid – as an employee or contract laborer – and if the appropriate tax filings were prepared and submitted pertaining to either employee deductions IRS 941 deposits or IRS 1099s, contract labor payments, and if they were filed at yearend.

 

 

TIME FOR A RISK ANALYST TO TAKE A LOOK:

After receiving the above information from an anonymous source, I met with Rick Dennis, an experienced Risk Analyst and Managing Member of the Wind River Company LLC, who is a freelance writer and author who also writes articles for my publication www.allaboutcutting.com.

 

I asked him to dissect the information into its many parts to determine whether or not the possibility of violations of the law had occurred in this matter. He informed me that the risk analyst’s job description strictly deals with the projection or identification of perceived risks to an individual, association, corporation or company.

Even though perceived risks of possible law violations are included in a final risk report, the final outcome of application is up to a criminal attorney-at-law, (i.e.), a U.S. or District Attorney and based on the rule of law and evidentiary findings.

 

JOINT EFFORTS OF OPHC/GOPHC:

 

My source explained that in 2013, the OPHC added two horse shows as a “joint effort” with the Greater Oklahoma Paint Horse Club, a stand-alone defunct organization that is FOR PROFIT. Its members are Jo Long, OPHC secretary, and Kevin Hardcastle, the past president of OPHC. All proceeds from these shows are alleged to be split in half between the Oklahoma Paint Horse Club and the Greater Oklahoma Paint Horse Club, which basically consists of the Past President and Secretary of the OPHC.

 

The question here is “Does the GOPHC  file taxes showing this income, since they are a For Profit Association?” Also anyone in the horse show business knows that most of the entry fees are received in cash and a few checks, with the writer usually not taking them off of their income tax, so there is no way of tracing where the money goes.

 

The Risk Analyst informed me that according to the above findings and anonymous source report, it appears that individuals from OPHC may have either organized or are engaged with another organization of a similar name (Greater Oklahoma Paint Horse Club) for the purpose of individual financial gain, which is contrary to the by-laws of the OPHC, which specifically states: “and at no time shall such club operate so as to inure to the direct or pecuniary benefit of any individual or individual member.”

 

A forensic audit of both clubs should prove or disprove this allegation.  Also, since the “for-profit” Greater Oklahoma Paint Horse Association (GOPHC) lists itself on its facebook.com page as a nonprofit, does this lend credence to this projected theory and just another example of unscrupulous behavior on behalf of its participants?

 

The Risk Analyst also said the factual information from the Oklahoma Secretary of State and GuideStar.org, plus the information from the anonymous source, could lead an investigative agency or tax agency to conduct a forensic audit of the Oklahoma Paint Horse Club (OPHC) and include the “for profit” Greater Oklahoma Paint Horse Club (GOPHC), since its alleged members are also actively engaged in both clubs, as well as the APHA, and are alleged to be receiving monetary gain from the splitting of horse show revenue between the two clubs: OPHC and GOPHC.

 

The Risk Analyst further stated that it’s not uncommon for a forensic auditor, in a matter such as this, and based on the already substantiated facts, to project or list possible criminal and civil violations of the law – Risks, as a focal point of exploration, during the audit – especially when documented evidence has already revealed fraud, (i.e.) OPHC representing a nonprofit status in lieu of a revoked nonprofit status while soliciting donations under fraudulent terms and conditions (if applicable) and document verification by Guidestar.org, (i.e.) criminal wrongdoing, conspiracy, Tax Fraud, tax evasion, failure of fiduciary obligation, Culpable Liability on behalf of officers, directors, IRS audit (fines and penalties), mail and wire fraudTheft by Deception

 

Essentially, these projected items are merely focal points of exploration to either prove or disprove the focal points, by the results of the forensic audit or investigation, and may be applied or withdrawn as well as the application of other civil or criminal violations as the evidence is revealed in the case.

 

The Risk Analyst also stated that the following legal definitions and rule of law could also be explored in this matter, based on the information received and evidentiary findings: breach of fiduciary duty, fraud and violation of state corporation law – operating an illegal corporation. This is especially important when their by-laws and articles of incorporation state “they will operate in accordance with the laws of the State of Oklahoma.”  Also, falsely representing a club to have an intact legal nonprofit status when in fact this status has been revoked due to violating tax laws, but not made public by the officers of the club, and a failure to file appropriate taxes is not operating within the law.

 

The Risk Analyst further stated the projected risks, exploration process and evidentiary findings could, in a hypothetical context of reference (only), could possibly “At the least indicate a conflict of interest, and at the worst the evidence could indicate tax evasion, money laundering, fraud and a conspiracy to commit fraud, as well as the civil violation of Failure of Fiduciary Duty.  The revealed evidence and the rule of law will be the deciding factor in a case such as this.

 

 

SUGGESTION: NONPROFIT VERIFICATION PROCESS

 

The Risk Analyst went on to state that it would be in the best interest of a nonprofit to have its affiliates or sanctioned clubs execute a “verification process” of required and submitted documents which would indicate any and/or all submitted documents are true and correct as well as indicating this organization is operating within the full letter of Federal and State law. The notarized verification process would insulate or protect the nonprofit against claims of liability as well as any inference of collusion (a secret cooperation in order to cheat or deceive) between a nonprofit and an affiliate.

 

SPONSORS & DONATORS:

As mentioned previously, the source was concerned that the Oklahoma Paint Horse Club advertises for sponsors and donations, all the while indicating they are a non-profit and receive some very large donations. The anonymous source was also concerned about the injurious position this deception had caused donors who believed they were, in fact, donating to a nonprofit association, when indeed they weren’t, and had taken this deduction on their individual, company, or corporate tax returns and possibly requiring amended tax returns, payment of back taxes, as well as fines and penalties imposed by a taxing agency.  In a scenario such as this, will the officers of the Oklahoma Paint Horse Club be subjected to “culpable liability” claims?

 

The packet revealed that one couple has donated a horse annually to OPHC to be auctioned off and the club retains all proceeds. The couple is disturbed as they have written the donations off on their income taxes since they have a copy of the OPHC bylaws stating the club was a nonprofit. There are other donators from Texas and Florida, including a large horse publication that generously donated annually to OPHC, that are possibly written off as business expenses on their tax returns. Other names of sponsors and donators would be forthcoming.

 

Also, one particiular horse publication Equine Chronicle, Ocala, Fla., was a large donator to the Club; however, after a phone call to the publication, owner Tom Grabe did not seem surprised when I told him that the OPHC had had their nonprofit status revoked and he immediately informed me that he did donate to the Club, but he didn’t donate to the Club because they were a nonprofit, but because he was a sponsor and he was provided advertising for the money he gave them. However, it seemed strange that after looking through the entire web site of the Oklahoma Paint Horse Club, there was not one mention of the Equine Chronicle. In fact, there were no ads for advertisers or sponsors on the entire web site. Also the IRS 990s that they did file had no section dedicated to income from advertisers or sponsors.

Click for OPHC web site>>

 

IN RETROSPECT …

In retrospect, this article clearly illustrates the results of the absence of transparency in a lot of nonprofit or even for-profit horse organizations – no matter how large they are or how long they have been in existence. The lack of transparency, as evidenced by the above two clubs, restrain the number of members who want to become involved and work toward making the association grow and even restrain directors from serving, due to the chance of culpable liability if management is not playing “above board.”

Glory Ann Kurtz – AllAboutCutting.com
940-433-5232, 719-748-5229 or 940-393-1865 (cell)
glory.kurtz@gmail.com

 

 

 

 

 

 

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☛ Rick Ivey leaves NCHA 8-29-14

Posted by on Aug 29, 2014 in BREAKING NEWS, COW HORSE NEWS, CUTTING NEWS, INDUSTRY NEWS, WHO, WHAT & WHERE | 5 comments

RICK IVEY LEAVES NCHA

 

By Glory Ann Kurtz
Aug. 29, 2014

In a Facebook posting today, Aug. 29, Rick Ivey, the Treasurer of the National Cutting Horse Association (NCHA), said, “After 12 years of hard work, my career at the NCHA is over.

 

“Thank you to all the wonderful people there and best of luck on the continued success of the organization.”

 

Asked what his plan was, he said, “I don’t have a plan in place yet. This is all a little new to me. It will work out in the end. God’s plan is better than anything I could do.”

 

When one person remarked about the turmoil at the NCHA, he said, “Turmoil probably isn’t the right word. It was time for the association to renew. I am part of the old structure. It will work out for everyone.”

 

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☛ NRHA to keep current drug policy 8-19-14

Posted by on Aug 19, 2014 in BREAKING NEWS, COW HORSE NEWS, CUTTING NEWS, HEALTH AND WEALTH, INDUSTRY NEWS, REINING NEWS, WHO, WHAT & WHERE | 2 comments

NRHA VOTES TO CONTINUE RESEARCH PHASE OF CURRENT DRUG POLICY

 

 

PETITION STARTED ASKING NRHA TO KEEP STRICTER DRUG POLICY

 

By Glory Ann Kurtz
Aug. 19, 2014
Following the submission of a proposal by the NRHA Million-Dollar trainers to amend the current drug policy (Animal Welfare & Medications Policy) of the National Reining Horse Association, the Board of Directors voted on Saturday, Aug. 17, to keep the current rule and “continue the research phase through 2015 and create a task force to review NRHA medications rules and policies.

Click for NRHA Current Drug Rule>>

Click for Trainers Proposed Drug Rule>>

 

 

While this was a victory for those against using drugs when showing horses in competition, it is not enough for those violently opposed to the use of drugs in show horses – period. A petition has been started asking the NRHA Board of Directors to keep their stricter drug policy and not appoint a task force to review the present rule scheduled to go into effect in 2015.

 

Currently the Petition, with a large international input from NRHA members and reining horse lovers, can be accessed through Ipetition and anyone (you need not be an NRHA member) can respond by putting in your name, email and/or comments. As of today, with a goal of 500 signatures, the petition has 820 signatures and close to 200 interesting comments. The petition can also be signed from Facebook and Twitter.

Click for IPetition>>

 GETTING IT RIGHT!

In the article on the proposed NRHA drug rules, it was noted that Million-dollar rider Andrea Fappani was an Italian and did not sign the drug proposal from the Million Dollar riders. Fappani is the youngest NRHA million-dollar rider, and now has earned over $3 million NRHA rider who was the first one to win the NRHA Open Futurity and also place second in 2011, riding Lil Joe Cash to the championship and Spook Off Sparks for Reserve. He also won the AQHA World championship in Junior Reining at the 2012 AQHA World Show riding Lil Joe Cash. He won his first Futurity in 2001 riding a Paint horse RR Star, while working as an assistant for Todd Bergen. Fappani was born in Italy; however, currently is training out of Rancho Oso Rio in Scottsdale, Ariz. His web site is: www.fappaniperformance.com/.

 

Currently he is a member of the United States Team at the 2014 Alltech FEI World Equestrian Games in Normandy, France. that will begin on Aug. 23 and conclude on Sept. 7, where the organizing committee is expecting 500,000 visitors from around the world. A record 76 countries are sending teams competing in reining, jumping, dressage, eventing, driving, endurance, vaulting and para-dressage. Horse-ball and polo will be demonstration events. Other Team USA members are Shawn Flarida, Springfield, Ohio; Mandy McCutcheon, Aubrey, Texas, and  Jordan Larson, Whitesboro, Texas. Alternates are Troy Heikes, Scottsdale and tom McCutcheon, Aubrey.

 

 

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☛ Who owns a Nonprofit? 8-15-14

Posted by on Aug 15, 2014 in COW HORSE NEWS, FEATURE ARTICLES, FROM THE EDITOR, INDUSTRY NEWS, LAWSUITS & INDICTMENTS, MAJOR EVENTS, RATE YOUR JUDGE, RICK'S CORNER | 58 comments

WHO OWNS A NONPROFIT?

 

By Rick Dennis
Aug. 15, 2014
“Who owns a nonprofit” is a frequently asked question by readers of www.allaboutcutting.com.  Actually, this is an excellent question and driven primarily by the many articles circulating throughout various horse-industry publications concerning nonprofit reorganization, drugs, and horses – mine included, e.g., “Where Is The Horse Industry Headed?” “Horse Doping Segments 1 -4” and “The Mechanical Horse – A Horse Under The Influence of Drugs,” along with Wind River Company LLC educational and training articles.

 

So exactly who owns a nonprofit? Actually, the answer is quite simple – No One! The Culliane Law Group simply states: A major misconception about nonprofit organizations concerns ownership of a nonprofit. No one person or group of people can own a nonprofit organization.

 

A perfect example of such a misguided conception is illustrated in Ginger Schmersal’s e-mail to the board of directors of the National Reining Horse Association concerning a proposed rule change to the drug-testing policy of this nonprofit. In her e-mail, she specifically states, “Craig asked that I share this article with you; it will be published later this month, so we ask that you please keep it confidential amongst yourselves until it goes to print. Craig and I hope that you as a board, vote for what is best for the horses. It is time we do what is right for them and NOT CONTINUE OUR SMOKE AND MIRRORS POLICY. We have to STOP WORRYING about public opinion and stand up and OWN our organization.”

 

Click for Ginger Schmersal’s e-mail to NRHA directors>>

 

Ownership is the major difference between a for-profit business and a nonprofit organization. For-profit businesses can be privately owned and can distribute earnings to employees or shareholders. But nonprofit organizations do not have private owners and they do not issue stock or pay dividends. And while nonprofit organizations can earn a surplus, that income must be reinvested in the nonprofit organization — possibly to benefit or expand programs according to the charitable mission. But that income cannot be distributed to persons.

 

If there is no owner, who manages and controls a nonprofit?
Once incorporated, the newly created nonprofit organization is a separate legal entity from its incorporators, directors, officers and employees. The nonprofit corporation owns assets of the business and is entitled to receive the revenue from its operation.

 

Many nonprofits are managed by boards; others may be managed by voting members. When a nonprofit first begins operating, the board members, along with the founder(s), may perform many of the tasks of the organization. As the nonprofit grows, the board may begin hiring staff members to develop and lead programs as the board and/or voting members continue to oversee the organization.

 

But none of these individuals or groups has any ownership rights in the organization. And while they don’t own the nonprofit, they do have significant legal and ethical duties that cannot be delegated to others.

 

Click for nonprofit law basics>>

 

Another interesting question emanating from the ownership of a nonprofit involved the liability of its members, officers, employees, and directors, e.g., “As a director or officer of a nonprofit, do I have any personal liability?”

 

The American Bar Association answers as follows: Nonprofit organizations are big business. Because of this and because of their unparalleled growth, nonprofits are receiving attention like they never have before, both from Congress and, because of this, from the Internal Revenue Service. Another more disturbing reason is the spate of highly publicized scandals involving individuals profiting at a charity’s expense.

 

Under these circumstances, anyone who participates in the oversight of a nonprofit organization would be well advised to pay close attention to its operations. One standard I would recommend be used to evaluate every activity of the nonprofit is: “How will this look on the front page of the local newspaper?”

 

What a Director Does/Does Not Do.
Directors are responsible for planning and directing the management of the nonprofit’s business and affairs. Directors have no individual power as a director to bind the corporation. Instead, directors take action as a body and those decisions are documented by Board resolutions. Directors who are also officers may be authorized by Board resolution to act on the corporation’s behalf in their capacity as officers, but the Board acts as a unit.

 

Nevertheless, each director is individually accountable to the corporation’s members and, in the case of directors of charitable organizations, to the state and federal regulatory authorities (primarily the IRS, the state taxing authority and, in many states, the Attorney General) who seek to protect the public’s interests in the charity.

 

Because it is so essential to the organization’s tax exempt status that it abide by its stated purposes, one of the principal duties of a director is to be aware of the nature and extent of the nonprofit’s exempt purposes and to assure that those purposes are properly pursued. The purpose of every act and decision of the director should be to advance the nonprofit’s purpose. If the personal aims of the individual are not the same as the aims of the organization, then the individual should not serve as a director.

 

Role of Corporate Officers and Agents.
Officers and agents of a nonprofit organization normally implement the decisions and policies established by the Board of Directors. Typically, the Chief Executive Officer of a charity (often designated as its “Executive Director”) and sometimes the Chief Financial Officer (typically called the “Treasurer”) answer directly to the Board. Most other employees, agents and contractors answer to the Executive Director or other senior management duly authorized by the Board.

 

Although a director of a nonprofit corporation, as a director, they should not be involved in the day-to-day operations and activities of corporate management any more than a director of a business corporation, this rule is often ignored in practice. For many nonprofit organizations, particularly small entities operating with limited financial resources, the directors may be the only active participants within the organization.

 

It is also typical for the directors and the officers to be one and the same individuals, particularly in smaller nonprofits. Nevertheless, it is important, from a liability standpoint, for the individuals serving in dual director/management positions to carefully document in the corporate record the capacity in which they are acting.

 

The liability exposures of nonprofit board members
The board of directors of a nonprofit organization can be exposed to a variety of lawsuits, ranging from allegations of wrongful acts to financial mismanagement to errors in judgment and negligence. Claims against directors and officers tend to be costly and disruptive to an organization. Perhaps even worse, if found guilty of misconduct, board members could be personally liable, placing their individual assets at stake. For this reason, directors and officers liability insurance (D&O) is an essential part of any board risk management program, providing financial resources for defense costs and any possible settlement.

 

The primary objective of a nonprofit board of directors is to provide oversight and direction to the organization so that it can successfully fulfill its mission. Although nonprofit boards are typically not subject to the same level of scrutiny as those in the for-profit sector, they nonetheless owe fiduciary duties to the nonprofit organization and its grantees and donors.

 

Any perceived breach of these fiduciary responsibilities can lead to legal action. A D&O claim can be brought against a nonprofit and its directors and officers for countless reasons and practices.

Click for liability exposures in nonprofits>>

Who can sue a non-profit board>>

 

Therefore, It is imperative that a nonprofit Board of Directors understands the risks involved as volunteers for the organization, their responsibilities as board members and how to protect themselves from personal liability.

 

Bylaws
Each nonprofit corporation is guided by a set of bylaws.  Bylaws are the written rules for conduct of a corporation, association, partnership or any organization. They should not be confused with the Articles of Incorporation, which only state the basic outline of the company, including stock structure. Bylaws generally provide for meetings, elections of a board of directors and officers, filling vacancies, notices, types and duties of officers, committees, assessments and other routine conduct. Bylaws are, in effect a contract among members, and must be formally adopted and/or amended.

 

Control of a nonprofit
Since no individual or group of individuals can own a nonprofit, the only way to control a nonprofit is for more than one person to be in a position of authority to influence a voting majority in their favor. Historically, reviews of various equine nonprofit’s powers-that-be revealed the same individuals remaining in power over extended time periods – including years, and in some instances decades, with particular nonprofit’s.

 

Resolution
The only way to resolve this power grab and control is to either vote the individuals out of office or institute legitimate term limits, for a specific designated time period, without the benefit of being re-elected once this designated time period has expired. Another way to limit control is to designate representatives of the most powerful and influential committees from across the spectrum of a nonprofit, without catering to one particular group or stereotype and limiting one individual from each division.

 

The constant rotation of personnel will prevent those in power from becoming enthralled with the ideology that their tenure of service to the nonprofit entitles them to ownership of a nonprofit when in fact it’s just an illusion on their part and nothing more!

 

“Until Next Time, Keep ‘Em Between The Bridles”!

 

Copyright 2014, all rights reserved.

 

 

Richard E. “Rick” Dennis

Managing Member

Office/Mobile: (985) 630-3500

Email: windrivercompanyllc@gmail.com

Web Site: http://www.windrivercompanyllc.com

Wind River Security, Consultation & Risk Analysis

Wind River Drug, Alcohol & DNA Testing

Wind River Ranch – Reined Cow Horse Breeding, Training, Exhibition & Sales

 

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☛ Schmersal responds to NRHA drug topic 8-12-14

Posted by on Aug 12, 2014 in BREAKING NEWS, COW HORSE NEWS, CUTTING NEWS, FROM THE EDITOR, HEALTH AND WEALTH, INDUSTRY NEWS, LAWSUITS & INDICTMENTS, REINING NEWS, WHO, WHAT & WHERE | 5 comments

ON THE  HOT TOPIC OF DRUGS

FROM THE EDITOR

By Glory Ann Kurtz
Aug. 12, 2014

On the “Hot Topic of Drugs,” Craig Schmersal, one of the NRHA’s “Million-dollar riders” wrote an article that is published in the Aug. 15 issue of Quarter Horse News in the Craig’s Spin section of the publication, that is just arriving at the homes of their subscribers.

 

Schmersal gives his opinion, realizing that he is “exposing himself and his family to criticism. However, he claims there is no drug rule that will stop the type of individual, who drugs an unsound horse and blocks them to the point that they cannot feel their limbs, feet or otherwise, from doing what it takes to win.” He says the horse is his “teammate” and he does not want to cripple or damage one of them for life. He claims his biggest concern is based on knowledge of what actually happens in situations where we have drug rules. “The medications given to the horses that are not prescribed and approved for horses are killing them,” he said.

 

He claims that the professionals want to pass a drug rule that allows them to medicate their horses with approved medications prescribed and administered by a veterinarian. “By doing so, we put the burden of what is best for our horses into the hands of a doctor who is trained to decide,” said Schmersal. “It is no different than one of us going to the doctor and being given a prescription, whether it is a pain medication, antibiotic or even anti-depression medications. I am a professional horse trainer and am not trained to know what the best medications are for my horses. I want the burden of that on my veterinarian. I know you are thinking that some vets will prescribe anything. And yes, I agree, but you cannot govern ethics.”

 

Asked about the rules in foreign countries where no drugs are allowed, he said, “Anyone who tells you they have it figured out over there is flat wrong, in my opinion.”

 

He also warned that if they were to pass a drug rule, they could not efficiently enforce it, nor defend it in court. “This has been proven in prior lawsuits,” said Schmersal. “Most tests done in the horse industry, with the exception of the racing industry, are not done using split testing; therefore, if a sample is contaminated in the lab and produces a false positive, there is no frozen sample to draw from to confirm a positive test. This is reason enough to not impose an unenforceable drug rule.

 

He wraps up the article saying “It has nothing to do with wanting to win at all costs; it has everything to do with preserving our horse.”

 

Click for link to Craig Schmersal’s article>>

 

HISTORY:
On July 31, I posted an article titled “16 NRHA “Million Dollar Trainers” proposed changes to NRHA Drug Policy. The group proposed a replacement to Section 7 Equine Medications. The Therapeutic Substance Provisions I the General Rules and Regulations of the NRHA Rule Book that was recently put into effect. The trainer were not disputing the method of collecting samples, but are disputing what a forbidden substance is. Three of the Million-dollar trainers who were from European countries refused to join in on the proposed rule change.

 

The Million Dollar trainers include Tim McQuay, Shawn Flarida, Duane Latimer, Todd Bergen, Dell Hendricks, Craig Schmersal, Tom McCutcheon, Brent Wright, Craig Johnson, Randy Paul, todd Sommes, Jordan Larson, Rocky Dare, Mike McEntire and Brian Bell. The Million-dollar trainers who opted out hail from European countries where horse drugs are not allowed and include Andrea Fappani, an Italian, as well as Bernard Fonck and Rudi Kronsteiner from Germany.

 

Letter (a) of Section 7 says: No horse competing in an event approved by the NRHA is to be shown in any class (see also section 1 (a), last sentence) if it has been administered in any manner or otherwise contains in its tissue, body fluids or excreta a forbidden substance which they want to leave as is.

 

The group of trainers is asking to change section (i) to read “For the purpose of this rule, a forbidden substance should be considered any substance that is not FDA approved for equine use and prescribed by a licensed veterinarian.”

 

What is left out in the old section (i) states a forbidden substance is: Any stimulant, depressant, tranquilizer, local anesthetic, psychotropic (mood and/or behavior altering) substance or drug which might affect the performance of a horse (stimulants and/or depressants are defined as substances which stimulate or depress the cardiovascular, respiratory or central nervous systems), or any metabolite and/or analogue of any such substance or drug except as expressly permitted by this rule.

 

Following is a link to the current NRHA Rule Book General Rules Section. The drug policy starts on Page 48 with the proposed rule change being at the bottom of page 54.

Click for NRHA trainers proposed drug rules>>

Click for NRHA General Rules>>

The only Million-dollar member that answered my request for a response was Todd Sommers, that I published last week on this site.
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☛ AQHA asking for members’ input! 8-10-14

Posted by on Aug 10, 2014 in BREAKING NEWS, COW HORSE NEWS, CUTTING NEWS, FROM THE EDITOR, INDUSTRY NEWS, REINING NEWS, RODEO & BULLRIDING NEWS, WHO, WHAT & WHERE | 4 comments

AQHA ASKING FOR MEMBERSHIP INPUT!

 

HERE’S HOPING THE IDEA IS CONTAGIOUS!

 

 

FROM THE EDITOR

 

By Glory Ann Kurtz
Aug. 10, 2014

I don’t know whose idea it was, but it was a good one! I’m talking about a new forum website, http://aqha.ideascale.com, asking you to “share your ideas to help make the American Quarter Horse Association (AQHA) a better organization for its members.”  I never got a copy of the e-mail about this website myself, even though I am a member and get their e-mails; however, I found it on another website. I have checked with several other members and none of them have received this address; however, let’s pass the word around and take advantage of it.

 

With the criticism of the association, as well as mass exodus of members, plus their reorganization press release, stating the retirement of Executive Vice President Don Treadway and the elimination of 14 more employees, maybe they, or the company they hired to help their image, have gotten the message and are considering listening to what the members have to say. I only wish the other equine non-profits would follow suit and listen to the members. I hope the AQHA has gotten the message that “the members are the most important part of the association and are who make it an excellent, good, marginal or bad association!”

 

While the web site is new, there haven’t been many suggestions or comments on the site as of yet, and I would encourage all of you who have an interest or a stake in the AQHA to speak now or forever hold your peace.  And guess, what, you don’t have to tell them your name or membership number. Simply post your e-mail address and confirm it.

 

As of this morning, there have been 17 ideas posted from 46 users and 95 votes. They have been discussing judging score sheets, showing, AQHA registration and forms, ranch horse pleasure, horse division, showing, allowing a certified Genetic Test Lab’s results in addition to UC Davis, drug testing in middle of the show rather than last day, online membership renewals for Amateurs and Novice, novice rules – adding a super senior level, reduced fees for senior citizens, putting score sheets online, the AQHA Handbook and the show calendar with suggestions to add affiliates to the AQHA web site. But there are many more things wrong with the association that need to be addressed – so now is your chance!

 

Why not join in and add your suggestions that you have been talking about to your fellow members? Why not try it today? Go to: http://aqha.ideascale.com.

 

 

 

 

 

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