Instapundit has some links about the initiation of an audit into the nonprofit The Nature Conservancy. I just came back from a weekend staff meeting for a nonprofit I helped found, and still do a little work for It's a 501(c)3 membership organization, whose primary activity is running an East Asian pop culture convention. One of the issues discussed was the current feeling among nonprofits that the hammer's coming down on the quick and the dead.
I sat in on a "Contracts 101" seminar given by our lawyer, where the primary message delivered was "they are cracking down, we need to make sure everything is explicitly organized and above-board". Our lawyer's solution was to cover all functions by contract. He was worried about the dual structure of the corporation and the convention. That is, the corporation consists of Active Members, who are not necessarily staffers, and the convention is run by staffers, who are not necessarily Active Members. In practice, most staffers are Active Members, and I don't know of a case where an Active Member *isn't* a staffer. Amusingly enough, I wasn't listed as an Active Member for the general budget meeting - I should be, but someone hadn't updated the list properly. I didn't care enough about it to try to fix the problem, and blew off the general meeting to play dominoes and Boggle, instead. Ain't burnout grand?
The problem here is that every single staffer is a volunteer. Nobody gets direct compensation for being staff; there are some categories of "perks", but the only instance I can think of, of actual fee-for-service, was a programming job which was specifically covered by written contract. The perks are not out of line, either: we're talking about a sleeping space for the convention, the option to wave Active Membership dues in lieu of travel costs to planning meetings, the occasional mass pizza order for events like "time to stuff handout packets before registration starts", and this weekend's meeting, known formally and affectionately as "ComCon", for "Committee Convention", sort of a mini-event for staffers and Active Members. ComCon and the at-con hotel rooms together are less than ten percent of the budget; ComCon is less than half a percent. It's pretty clean from a practical standpoint, as nonprofits go.
I'm not convinced that forcing several hundred volunteer staffers into explicit contract situations is going to do all that much to idemnify us from a hypothetical auditorial harrowing, and it's my feeling that we have enough trouble attracting sufficient volunteers to run what's becoming an increasingly oversize beast of an event. ComCon is about as far as I'm willing to see the nonprofit & con go in terms of making the volunteer staffers happy. Anything that's likely to make staff less happy and more bureaucracy-burned is also likely to cause a higher level of staff discontent, and thus pressure to do more stuff to make staff and potential staff happy. Stuff that diverts resources from core purposes to staff privileges or benefits. In other words, I fear that more formality will make us a lesser non-profit - one that has a worse mission-to-other-crap budget ratio than we currently enjoy.