A long time association professional, Ron Mattocks, has just launched a blog to accompany his new book, the Zone Of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength.
The book just came out today, so I have not read it yet. However, here is how Ron describes the issues he is addressing.
“The term ‘Zone of Insolvency’ was first used by the courts in 1992. It describes a period of financial distress where insolvency is at least a foreseeable possibility by reasonable business people. The court said that a board governing a corporation in the Zone of Insolvency has expanded legal responsibilities and liabilities. I chose to focus on nonprofit corporations in the Zone of Insolvency because a greater percentage of nonprofits operate in perpetual financial distress than what we see on the for-profit side. New nonprofits have incorporated at twice the rate of for-profits every year for the past twenty years. But on the back end, fewer nonprofits file for dissolution. As a result, we have this escalating glut of nonprofit organization living perpetually in the Zone of Insolvency.”
The book just came out today, so I have not read it yet. However, here is how Ron describes the issues he is addressing.
“The term ‘Zone of Insolvency’ was first used by the courts in 1992. It describes a period of financial distress where insolvency is at least a foreseeable possibility by reasonable business people. The court said that a board governing a corporation in the Zone of Insolvency has expanded legal responsibilities and liabilities. I chose to focus on nonprofit corporations in the Zone of Insolvency because a greater percentage of nonprofits operate in perpetual financial distress than what we see on the for-profit side. New nonprofits have incorporated at twice the rate of for-profits every year for the past twenty years. But on the back end, fewer nonprofits file for dissolution. As a result, we have this escalating glut of nonprofit organization living perpetually in the Zone of Insolvency.”
His blog covers items ranging from financially stressed organizations to the liabilities of board members to non-profits and theft. As we seem to be facing increased turbulence in the economy, this may be something you want to learn more about related to your organization.
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