Gifts to committee members?

BillD16 (Texas)
Posts: 980

Posted:

The head of our pool committee resigned after 6 years of dedicated service. Someone suggested getting her a gift card - amount ranging from $100 - $250 - $500.

Personally, I’m all for a “goodbye / appreciation” gift. But I’m curious:

1. Is this legal?
2. What is an appropriate amount?

I guess I have a vague concern that (say) a $500 gift card - despite it saying “gift card” right on the front - might be interpreted as ‘compensation’ because (even today) $500 is a substantial amount of money.

Two of the people on the Board have spouses who are committee heads (not the ex-pool committee head). Any inappropriateness there?

Related (maybe): I looked at our Bylaws, which are 15 years old, and the wording is not what I expected:

12.1 Non-Profit Association. The Association is not organized for profit. No Member, Director, officer or person from whom the Association may receive any property or funds shall receive or shall be lawfully entitled to receive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association be paid as salary or compensation to, or be distributed to, or inure to the benefit of any Director, officer, or Member; provided, however, always (1) that reasonable compensation may be paid to any Member, Director, or officer while acting as the agent or employee of the Association for services rendered in effecting one or more of the purposes of the Association {emphasis mine} and (3) that any Member, Director, or officer may, from time to time, be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association.

There does not appear to be a (2). But it’s (1) that I find interesting. I wonder if it’s been overridden by current legislation?

This is in Texas. I’m really just curious about any thoughts that y’all might wish to share. Personally, I’m fine with a gift card - but there appears to be a bit of ‘controversy’ on the topic. I look to y’all for your thoughts and possible best practices.

Thank you.

BillD

For instance, I found this:

https://communityassociationmanagement.com/c49-legal-compliance/c57-ask-the-experts/can-hoa-committee-members-be-compensated/

It focuses on North Carolina and doesn’t really answer the question. But it seems to indicate some controversy on the point.

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

MichaelT21 (Arkansas)
Posts: 501

Posted:

I don't think that HOA funds should be used to pay for substantial gifts, such as a $100, $250, or $500 gift card.

I do think that a $16 bouquet of flowers is problematic for someone who was a long time contributor. A handwritten thank you card is also a nice gesture as well that hardly costs anything.

JohnC46 (South Carolina)
Posts: 14,230

Posted:

The subject of gifts has been beaten to death. The answers range from never to do as you please. I say a smallish, $50 or less gift is fine.

JohnT38 (South Carolina)
Posts: 1,620

Posted:

Pass the hat and chip in your own money. Whatever you collect is what you spend.

SheliaH (Indiana)
Posts: 6,968

Posted:

What John said. Passing the hat among the board members to buy the gift card shouldn't break anyone. That said, there are some HOAs who have a line item for "goodwill activities" like small gifts to longtime board members who step down, community volunteers who knocked themselves out for a big neighborhood project like a cleanup day, etc.

You don't need to designate a fortune for a line item like this, but should have rules on when and how to use it, perhaps with a limit on the cost of the gift. If you didn't want to use HOA money, perhaps this could be the start of a fund homeowners themselves could contribute to (voluntary, please).

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

KerryL1 (California)
Posts: 14,519

Posted:

$100-$500 from HOA funds seems waaaay outta line. Our Board spends maybe $75 for retiring board members from HOA funds for a nice bouquet of flowers and card.

We've designed a very nice coffee mug with our logo on one side and the other side says the retiree's name, dates of service and "Thank you for serving your community," which the Board also gives the person.

On other occasions, the board members cheap in for, say, a birthday gift for our PM.

BillD16 (Texas)
Posts: 980

Posted:

Thanks all. Frankly, I was surprised at all of the negativity on this practice (I searched the HOATalk archives, too). But also: I get it.

I was outvoted 4-1 on the matter, but - 3 of them will be gone after Thursday and the 3 new people are friends of mine. I’m certain we’ll still disagree on things but I’m optimistic that the upcoming year will be good for my neighborhood.

BillD

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

SteveH35
Posts: 331

Posted:

Quote:

Posted By BillD16 on 06/14/2022 8:14 AM

The head of our pool committee resigned after 6 years of dedicated service. Someone suggested getting her a gift card - amount ranging from $100 - $250 - $500.

Personally, I’m all for a “goodbye / appreciation” gift. But I’m curious:

1. Is this legal?
2. What is an appropriate amount?

I guess I have a vague concern that (say) a $500 gift card - despite it saying “gift card” right on the front - might be interpreted as ‘compensation’ because (even today) $500 is a substantial amount of money.

Two of the people on the Board have spouses who are committee heads (not the ex-pool committee head). Any inappropriateness there?

Related (maybe): I looked at our Bylaws, which are 15 years old, and the wording is not what I expected:

12.1 Non-Profit Association. The Association is not organized for profit. No Member, Director, officer or person from whom the Association may receive any property or funds shall receive or shall be lawfully entitled to receive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association be paid as salary or compensation to, or be distributed to, or inure to the benefit of any Director, officer, or Member; provided, however, always (1) that reasonable compensation may be paid to any Member, Director, or officer while acting as the agent or employee of the Association for services rendered in effecting one or more of the purposes of the Association {emphasis mine} and (3) that any Member, Director, or officer may, from time to time, be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association.

There does not appear to be a (2). But it’s (1) that I find interesting. I wonder if it’s been overridden by current legislation?

This is in Texas. I’m really just curious about any thoughts that y’all might wish to share. Personally, I’m fine with a gift card - but there appears to be a bit of ‘controversy’ on the topic. I look to y’all for your thoughts and possible best practices.

Thank you.

BillD

For instance, I found this:

https://communityassociationmanagement.com/c49-legal-compliance/c57-ask-the-experts/can-hoa-committee-members-be-compensated/

It focuses on North Carolina and doesn’t really answer the question. But it seems to indicate some controversy on the point.

Bill,

Beyond the fairly easy to understand TX statutory reference you provided, your Bylaws might have something to say about compensation. Ours say that volunteer directors cannot be compensated for their roles as directors. An extension of that would be not to compensate committee members for their roles as committee members.

Are you setting an example that volunteers at your CIC receive gifts? Is there a specific criteria, or are you going to change the gift amount based on years of service and whether or not the Board "likes" the volunteer? There are plenty of ways to celebrate your volunteers that do not involve providing any form of gifts or compensation to any one person specifically. While I'm sure the faceless, nameless moderator will later remove this reference, feel free to take some ideas from this page: https://www.(LINK-NOT-ALLOWED-PER-POSTING-RULES)/resources/volunteering

Regards,
Steve

MichaelT21 (Arkansas)
Posts: 501

Posted:

Quote:

Posted By SteveH35 on 06/14/2022 12:53 PM

Posted By BillD16 on 06/14/2022 8:14 AM

The head of our pool committee resigned after 6 years of dedicated service. Someone suggested getting her a gift card - amount ranging from $100 - $250 - $500.

Personally, I’m all for a “goodbye / appreciation” gift. But I’m curious:

1. Is this legal?
2. What is an appropriate amount?

I guess I have a vague concern that (say) a $500 gift card - despite it saying “gift card” right on the front - might be interpreted as ‘compensation’ because (even today) $500 is a substantial amount of money.

Two of the people on the Board have spouses who are committee heads (not the ex-pool committee head). Any inappropriateness there?

Related (maybe): I looked at our Bylaws, which are 15 years old, and the wording is not what I expected:

12.1 Non-Profit Association. The Association is not organized for profit. No Member, Director, officer or person from whom the Association may receive any property or funds shall receive or shall be lawfully entitled to receive any pecuniary profit from the operation thereof, and in no event shall any part of the funds or assets of the Association be paid as salary or compensation to, or be distributed to, or inure to the benefit of any Director, officer, or Member; provided, however, always (1) that reasonable compensation may be paid to any Member, Director, or officer while acting as the agent or employee of the Association for services rendered in effecting one or more of the purposes of the Association {emphasis mine} and (3) that any Member, Director, or officer may, from time to time, be reimbursed for his actual and reasonable expenses incurred in connection with the administration of the affairs of the Association.

There does not appear to be a (2). But it’s (1) that I find interesting. I wonder if it’s been overridden by current legislation?

This is in Texas. I’m really just curious about any thoughts that y’all might wish to share. Personally, I’m fine with a gift card - but there appears to be a bit of ‘controversy’ on the topic. I look to y’all for your thoughts and possible best practices.

Thank you.

BillD

For instance, I found this:

https://communityassociationmanagement.com/c49-legal-compliance/c57-ask-the-experts/can-hoa-committee-members-be-compensated/

It focuses on North Carolina and doesn’t really answer the question. But it seems to indicate some controversy on the point.

Bill,

Beyond the fairly easy to understand TX statutory reference you provided, your Bylaws might have something to say about compensation. Ours say that volunteer directors cannot be compensated for their roles as directors. An extension of that would be not to compensate committee members for their roles as committee members.

Are you setting an example that volunteers at your CIC receive gifts? Is there a specific criteria, or are you going to change the gift amount based on years of service and whether or not the Board "likes" the volunteer? There are plenty of ways to celebrate your volunteers that do not involve providing any form of gifts or compensation to any one person specifically. While I'm sure the faceless, nameless moderator will later remove this reference, feel free to take some ideas from this page: https://www.(LINK-NOT-ALLOWED-PER-POSTING-RULES)/resources/volunteering

Regards,
Steve

As a technicality, the idea that committee members cannot be compensated as an extension of the rule that board members cannot be paid is an example of a made up rule. In the absence of the state law, CC&Rs or by-laws stating that committee members cannot be paid, they certainly can be paid.

It may not be typical to pay committee members for their service and homeowners may frown upon it, but it is not prohibited by statute, CC&R, or by-law of most associations. Our CC&Rs specifically allow us to pay ACC members for their time spent on ACC activities. We don't, but it's allowed per the CC&Rs.

MichaelT21 (Arkansas)
Posts: 501

Posted:

I personally do not care for made up rules. We had a former director, who was an attorney, who made up a lot of rules. I spent about the first year and a half trying to get everyone up to speed about what was an actual rule that we needed to follow versus a good idea. I think it's really helpful to understand the size of the sandbox even if one only wants to play in one corner of the sandbox.

SteveH35
Posts: 331

Posted:

Quote:

Posted By MichaelT21 on 06/14/2022 1:44 PM
I personally do not care for made up rules. We had a former director, who was an attorney, who made up a lot of rules. I spent about the first year and a half trying to get everyone up to speed about what was an actual rule that we needed to follow versus a good idea. I think it's really helpful to understand the size of the sandbox even if one only wants to play in one corner of the sandbox.

Michael, your responses are completely obtuse to the reality of the intent to not compensate volunteers in general. A test of reasonableness is all that's required. If you cannot compensate volunteer directors for their duties as directors, compensating volunteer committee members for their committee efforts is obviously not going to fly.

Regards,
Steve

BillD16 (Texas)
Posts: 980

Posted:

> Are you setting an example that volunteers at your CIC receive gifts? Is there
> a specific criteria, or are you going to change the gift amount based on years
> of service and whether or not the Board "likes" the volunteer?

Thanks, Steve, and yeah: these are some of the issues that have helped me understand why many people take a negative view of these gifts. I really don’t have a lot against the gift concept, but I take my role as Treasurer very seriously. Perhaps *too* seriously

Again, I was surprised at the negative reactions. I think Michael may have a point that there’s no actual “rule” prohibiting this kind of thing. But I started out looking for whatever might constitute Best Practices for this situation, and it sure seems like a $250 gift card from HOA funds is not one of them.

It probably says something about my dissatisfaction with my current Board that it’s not uncommon for them to make decisions based only upon their opinion at the moment, without even a fast rudimentary Google search, without any regard for whatever rules might exist. I’m a very pragmatic person, and I don’t like being bogged down by rules. But part of taking this job is accepting that yes, there are some rules and considerations, and I can’t just do whatever I want. I’m just venting, sorry. I don’t want to jinx it, but I’m very hopeful that things change a lot with our upcoming Annual Meeting and new Directors.

BillD

HOA Board ex-President
Austin, Texas USA

“You can’t put too much water in a nuclear reactor”

SteveH35
Posts: 331

Posted:

Quote:

Posted By BillD16 on 06/14/2022 2:57 PM
> Are you setting an example that volunteers at your CIC receive gifts? Is there
> a specific criteria, or are you going to change the gift amount based on years
> of service and whether or not the Board "likes" the volunteer?

Thanks, Steve, and yeah: these are some of the issues that have helped me understand why many people take a negative view of these gifts. I really don’t have a lot against the gift concept, but I take my role as Treasurer very seriously. Perhaps *too* seriously

Again, I was surprised at the negative reactions. I think Michael may have a point that there’s no actual “rule” prohibiting this kind of thing. But I started out looking for whatever might constitute Best Practices for this situation, and it sure seems like a $250 gift card from HOA funds is not one of them.

It probably says something about my dissatisfaction with my current Board that it’s not uncommon for them to make decisions based only upon their opinion at the moment, without even a fast rudimentary Google search, without any regard for whatever rules might exist. I’m a very pragmatic person, and I don’t like being bogged down by rules. But part of taking this job is accepting that yes, there are some rules and considerations, and I can’t just do whatever I want. I’m just venting, sorry. I don’t want to jinx it, but I’m very hopeful that things change a lot with our upcoming Annual Meeting and new Directors.

BillD

Agreed. Better to spend $2,500 and throw a party for all your volunteers to recognize them (that might be too much for one event given the budget, the number of homes/units, etc., but you get the gist). Invite all your owners and residents. Win-win.