NERFA Response to the Online Petition
With the approaching NERFA Board of Directors elections, we want to provide the Community with information to aid in your decision making. It is only now that we can respond in detail to the online petition that has been circulating regarding current NERFA leadership. Upon receiving the petition, the Board conducted interviews and fact-checked the allegations described there. We hope this response helps to clarify the situation as of this date.
Overview: From A Community to A Sustainable Non-Profit
NERFA began as an organization created and administered by a dedicated founder and run by a group of people who donated their services out of love. While they were sometimes compensated, they tirelessly gave their time and expertise.
Generally, Board members were recruited from respected and trusted associates and Board Meetings were generally held once or twice a year. The focus was on the tasks at hand: creating a successful yearly conference, occasionally expanding to try new programs (like Young Folk), and keeping NERFA viable. NERFA was sometimes informal in its organizational approach, and there were few official structures, policies, and procedures.
The NERFA Board that inherited this beautiful endeavor in 2018 was filled with loving, long-time contributors including Michael Kornfeld, Ethan Baird, Justin Nordell, Barbara Shiller, and Jess Wrubel. During these last five years, NERFA has worked to blend the warmth of our tradition with structure, transitioning to a sustainable non-profit administered by a dedicated volunteer Board of Directors, with a paid staff.
We are often asked about this process. Namely, it required:
- The recruitment of board members with specific skills needed by the organization
- The development of formal policies/procedures demanded of nonprofits.
It is hard work, often emotionally draining, and (as with most non-profits) board turnover can be high.
Here are just some of the changes that have occurred as we as we’ve evolved::
- Transitioned to monthly meetings of the Board of Directors
- Created a committee structure for governance, financial management, fundraising, program development as well as accessibility and diversity-focused initiatives
- Examined the staffing needs of the organization and hired an Executive Director and a team of part-time employees to provide year-round online programming, in addition to our conference
- Developed standard policies and procedures essential for a non-profit organization. These include policies on conflict of interest, whistleblower protection, and record retention.
- Developed a fiscal management handbook, creating an onboarding packet for new board members, and formulating a detailed description of board roles and responsibilities
- Widened our demographics, consciously reaching out to create stronger connections across our region. For example we have created a partnership with Folk Music Ontario creating opportunities for cross organizational growth
- Increased our scholarship program to promote diversity
- Developed relationships with sponsors, gaining access to support and equipment needed by NERFA
- Successfully raised over $20,000 with our first major fundraiser since the pandemic
- Weathered the pandemic, providing a virtual conference and NERFA 365, year-round educational peer groups and professional development opportunities to bridge the time until we could be together again
- Moved the Conference to a new location, creating an opportunity for showcasing in a famed venue, and put on two conferences.
LET’S ADDRESS YOUR BIGGEST CONCERNS ONE BY ONE:
IS NERFA DELINQUENT IN MEETING TAX DEADLINES? NO.
The Board has filed our annual Return of Organization Exempt from Income Tax (Form 990-EZ) on time and shared with FAI in a timely fashion since 2020.
WHAT ARE OUR ACCOUNTING PRACTICES?
NERFA’s financial records comply with GAAP (Generally Accepted Accounting Procedures). Specifically, all expenses are accounted for with receipts, donations are recorded and acknowledged and income for the conference is credited only when the conference occurs (and is treated as a liability prior to the conference).
HOW DOES NERFA ENSURE THAT BOARD MEMBERS OR STAFF MEMBERS DO NOT BENEFIT IN ANY INAPPROPRIATE WAY FINANCIALLY?
Facing the cancellation of the Conference in 2020 (the Conference is our primary source of income) and concerned about whether an in-person conference would be possible in 2021, the Board sought solutions so that NERFA could survive the pandemic. The Board unanimously enlisted Ethan Baird to transition from a board member into the sole role of Executive Director over six months.
A board of directors is responsible for hiring and establishing compensation for the executive director that is reasonable and not excessive, but also enough to attract and retain the best possible talent to lead the organization. For most of 2021, Ethan did nearly all the work implementing NERFA 365 over long hours of creating and editing video content, creating a necessary standardized data retention infrastructure for NERFA, and a publicity campaign for new programming. For his work, Ethan was paid $1,250 per month (an amount similar to what NERFA paid our clerical worker in FY 2017-18).
In 2021, with the pandemic continuing, the Board contemplated producing a virtual conference, but found that the costs of hiring an outside company to create the infrastructure required were wildly prohibitive. At that time especially, these skills were at a premium. A single-day virtual conference, complete with presentations and virtual breakout rooms on average priced out close to $25,000.
The Board asked Ethan to propose a plan for NERFA to create a four-day virtual conference “in-house”, including the costs of purchasing software and hiring additional staff. Ethan proposed that his company, Tribal Mischief, which was already working with the FAR-West region on their conference, could produce an event at a fraction of the cost that an outside company would charge. In addition, Ethan offered to provide NERFA with some protection against loss by accepting a percentage of the income from the Conference rather than NERFA paying Tribal Mischief in full in advance. This meant if NERFA did not meet expectations for registration, Tribal Mischief would assume a sizable portion of the financial burden.
DID TRIBAL MISCHIEF RECEIVE A “WINDFALL” FROM NERFA? NO.
The total payment to Tribal Mischief for creating and producing the entire 2021 online conference was $17,866. The last $4,666 was only paid out after the successful implementation of the Conference. To put this in context, FAI’s director informed us that they paid significantly more for their virtual conference.
DID JUSTIN NORDELL, THE NERFA PRESIDENT RECEIVE COMPENSATION FROM NERFA? NO.
Justin has never received financial compensation from NERFA.
DID NERFA FAIL TO REPORT COMPENSATION ON ITS FORM 990-EZ? NO.
Income received by board members or key employees is entered in Part IV of Form 990-EZ. Payments to Tribal Mischief (Ethan is its key employee) and Ethan’s compensation as Executive Director were reported on the 2021 Short Year Form 990-EZ (covering July 1, 2021-Dec. 31, 2021).
In our 2022 990-EZ, we indicate that Ethan earned $60,600, which included all material costs of software used by NERFA, his salary as executive director, as well as what Tribal Mischief received for three part-time employees and outside technical contracting services.
DID THE BOARD ENTER INTO AND/OR CONTINUE THE TRIBAL MISCHIEF CONTRACT WITHOUT ADEQUATE REVIEW? NO.
Following the successful online conference in 2021, the Finance Committee examined all options for staffing NERFA in the coming year, including whether to contract with Tribal Mischief again.
NERFA’s staffing needs were identified as marketing services, content creation, media management services, technology and infrastructure integration. Each of these positions demanded skills from qualified specialists, who would be willing to work as part-time staff. The market rate for such work was far more than NERFA could afford.
As reported in the Treasurer’s report to the Community in 2022 (click here to read: 2022 Report to the Community) the Executive Director was paid $15,000 that year, Tribal Mischief was paid $3,300/month, supporting three part-time employees. Our total staffing expenses for 2022, including our Executive Director, conference staffing, and miscellaneous contractors, was $69,865. That amount is about what an organization like NERFA would typically have to pay one single professional. The combined amount for four staffers was less than a single Executive Director’s salary for FAI.
The Board felt that the contract with Tribal Mischief to meet our staffing and technical needs was unquestionably beneficial to NERFA.
Should the board have engaged in a broader bidding process? Perhaps. Though this contract and its benefits were discussed in detail in the 2022 Annual Meeting, the board dissolved its relationship with Tribal Mischief in 2023, taking into consideration community concerns. The decision has cost NERFA dearly in ways the community can’t see, as the work of those three unreplaced part-time employees was largely done by the Executive Director in addition to his regular duties. We are unquestionably understaffed, and it shows.
DID NERFA THREATEN ANYONE WITH LEGAL ACTION? YES.
A member of the NERFA Community reached out to the Board with accusations of financial improprieties. The Treasurer provided that individual with appropriate documentation of NERFA’s fiduciary reporting. The accusations were reported to FAI. Upon review, both NERFA and FAI independently determined that NERFA’s expenses for the services were not only substantially less than customary but also reported appropriately. When the accusations did not stop, upon the advice of counsel, the Board sent a letter informing that we would take legal action if the behavior continued.
ARE GRIEVANCES AGAINST BOARD OR MEMBERS OR STAFF IGNORED? NO.
NERFA has a procedure in place for addressing rumored or formal claims of abuse, intimidation or harassment within the community. Since the pandemic, the board has followed those procedures alongside a few community members that volunteered for a burgeoning “SAFE” Committee. In the past, sometimes claimants have refused this option. NERFA will often still conduct its own internal review to satisfy the board and maintain a record. Our plan in 2024 is to formalize the “SAFE” committee to fulfill this role in the future.
IS NERFA’S 501(c)(3) NONPROFIT STATUS IN JEOPARDY? NO.
First, NERFA does not have independent Nonprofit Tax-Exempt Status (commonly referred to as 501(c)(3) status), but rather obtains its status under a group exemption through FAI. FAI has the exclusive power to revoke our status; however, they continue to support our efforts and have assured us that our status as a Nonprofit Tax-Exempt Organization under FAI’s group exemption remains in good standing.
During the last few years, the Board has explored the possibility of applying for Nonprofit Tax-Exempt Status independent of FAI, completing much of the work required to apply. We’ve also been reviewing our relationship with FAI.
IS THE BOARD ALL JUST “BUDDY” APPOINTMENTS? NO.
It is typical and necessary when relying heavily on volunteers and dedicated friends to seek people you know and trust to serve with you, especially as you transition from a founder-driven board to a paid staff and volunteer-driven board. Also, the Board must develop an infrastructure not dependent on the sacrifice of just a few individuals.
In the last few years, when a board vacancy has arisen, the Board explored the needs of the organization at the time. Does the Board need another good networker? A great fundraiser? Someone with communications expertise? More artists? More equitable representation? The Board has then sought out candidates based on those needs and individuals willing and able to fulfill them. During the last five years, most of the nominees for directors were unknown to most of the Board members before nomination and no one has petitioned themselves onto the board since 2016.
DID THE BOARD SEND OUT TIMELY NOTICE OF THIS YEAR’S ELECTIONS? NO.
The Board inadvertently sent out the notice late. After learning this error occurred, the election process was extended to ensure adequate time for this year’s self-nominations.
IS NERFA SENDING OUT EMAILS ABOUT THE ELECTION TO ALL MEMBERS OF THE NERFA COMMUNITY? NO.
Election emails are specifically sent out only to members of FAI who have identified NERFA as their region, entitling them to a vote. NERFA communicates with the NERFA Community using the list provided by FAI.
There are separate email lists specific to conference attendees and a general NERFA community list that individuals opt into regardless of membership or conference attendance.
WAS THE NERFA STAFF LESS RESPONSIVE IN 2023? YES.
This is unquestionably true as we are faced with the challenge of reduced staff. Despite this, NERFA’s accomplishments in 2023 were considerable, and the Board is extremely proud of them. The Board is working on fundraising initiatives to meet expectations and continue to create opportunities for the Community.
CONFERENCE-RELATED CONCERNS:
WHY DID THE BOARD DECIDE TO HAVE THE FORMAL SHOWCASES AT A VENUE RATHER THAN IN THE HOTEL?
In 2022, the Board theorized that the incentive of performing on The Stone Pony stage and seeing our colleagues perform on that stage would draw people back to an in-person conference following the pandemic. The Board also wanted to elevate folk music, place it on a larger stage, and create a visible promotional and resume-building opportunity for our artists.
The Board was also concerned about the cost of producing the showcases in the hotel. Historically, NERFA has paid over $20,000 for sound production at our conferences and provided accommodations to the sound staff. By contracting with The Stone Pony for our formals, NERFA saved more than $6,000 on the total cost of sound for the conference.
WHAT HAPPENED WITH THE STONE PONY IN 2023?
In 2022, the Stone Pony informed the Board that it does not do formal contracts, and so our agreement with the venue was confirmed through a series of emails. After the 2022 Conference, the Board informed The Stone Pony that NERFA wanted to return for the 2023 Conference dates. However, in January 2023, The Stone Pony informed the Board that we could return only at a much higher price, which the Board was able to negotiate down to a reduced amount. After waiting for confirmation for several months, The Stone Pony advised that Saturday would no longer be available as The Stone Pony had gotten a higher offer. They offered to rent the venue on Thursday and Friday nights, reducing the Thursday price. The Board agreed to the revised terms and asked that The Stone Pony send a contract. The contract arrived in July and the signed contract was returned to The Stone Pony, but the Stone Pony never returned a fully executed contract or otherwise contacted the Board. After pursuing The Stone Pony to return the signed contract for months, in early October The Stone Pony once again changed the deal to Thursday and Friday afternoons. The Board immediately began exploring alternatives.
It took intensive work to shift gears and arrange for sound engineers at the hotel. Ultimately, we were able to put on exceptional formal showcases.
WAS THE NOTIFICATION OF THESE CHANGES MISHANDLED? YES, AND NO.
Priority was given to rescheduling any showcase artist that might be affected. The first wave of notices went to showcasing artists to manage potential scheduling conflicts. That notice alluded to difficulties with the Stone Pony but failed to make clear that we were moving the showcases to the Hotel. Notification to those directly affected (general attendees) was next and finally, less formally, to the community at large.
WHY HAS “MY NERFA” CHANGED, AND WHAT CAN I EXPECT IN THE FUTURE?
Semi-formal (Tri/Quad) Showcases
We’ve received substantial feedback from past semi-formal showcase performers expressing disappointment with the inconsistent sound quality and varying audience sizes. Recognizing that eliminating these showcases has reduced performance opportunities, our staff is proactively developing new initiatives. These include EPK video recordings, curators’ showcases, and FMO regional showcases aimed at addressing this change.
Community Meals
As the pandemic was still a concern, we followed the CDC’s recommendation against communal buffets and decided not to have community meals at our Conference in 2022. Though hotel pricing at the Berkeley was similar to the Stamford hotel, we received feedback from many conference attendees that the cost of the meals was prohibitively high and that the food choices were inadequate. We were concerned about creating a culture where participation in mealtime interaction was based on economic means, thus creating a caste system for networking opportunities. Most importantly, we wanted to make certain that the members of our community who had experienced severe economic hardships during the pandemic could afford to return.
That being said, the Board has heard you and is happy to announce that there will be optional community meals at NERFA 2024. We are working out a compromise, and creating other universally available networking opportunities.
ARE THERE RECENT DEVELOPMENTS AND GOOD NEWS? YES.
FAI and NERFA. To improve our partnerships, FAI, NERFA, and the other regional organizations met on December 6-7, 2023. During the past few years, Ethan, as Executive Director, and Justin, as President, have been working to ensure the future partnership of the regional and FAI, the umbrella organization, are more beneficial to each other. The December meeting proved wildly successful. Opportunities have opened up for greater sharing of resources, mutual promotion and stronger relationships among staff. Impressed by recent conferences, current FAI leadership is interested in co-branding some of that great video content NERFA has been producing at our conferences and sharing resources to enable NERFA to produce more content (and through that more opportunities for members). In addition, we were able to change the policy that prohibited us from messaging our members and we are exploring standard bylaws changes to establish term limits for board members.
Our vision is to make NERFA more inclusive. We want to see more young people at our conference, more people of color, more people from historically marginalized groups, and a greater diversity of music that reflects the constantly evolving definition of what constitutes FOLK. We continue to expand the scholarship program to this end and welcome ideas. We will actively seek more diverse participation in volunteer capacities, including on committees and on the Board.
NERFA needs to develop additional income streams. We have depended too long on our conference to cover all of our annual expenses. While it once worked, that is not a model that will see us into the future. This past year, we lost several folk festivals, including the New Bedford Folk Festival, Philly Folk Festival, and Clearwater Festival. Venues, house concerts, and coffeehouses have ceased operations throughout our community. Everyone, including NERFA, needs to think differently to survive and thrive in our changing industry.
IN CLOSING
We hope that this detailed response reflects our respect for those who feel left out, confused or unheard, and opens a window into the complexities and difficulties of shepherding this type of organization. The Board has faced multiple challenges, including, of course, the pandemic. We have not always been right, but we have always been honorably intentioned. This is why it seems that the arguments surrounding this have become so emotionally charged. The Board takes our Community’s concerns and grievances very seriously and has spent considerable time and effort checking and verifying the details of issues raised. The process inspired the Board’s collective revisiting of “Why did we make that choice?”, “Would we STILL support that policy?”, and “Is this STILL the right course?” It was worth looking back over for all of us.
If this response did not address your specific concerns, please know that NERFA will continue to run regular Community meetings. Please attend them, bringing your questions and concerns.
Please check to be sure you are in good standing and able to vote in our region (it can be done by logging in to your FAI account, e-mailing their membership coordinator Tisha Naipaul at [email protected], or making a phone call).
The 2024 conference will be our 30th anniversary. Thank you for being here throughout the journey.
Your NERFA Team
