Let's start by trying to understand what is expected from boards in the first place. Your comment cannot be posted because our system has classified it as spam. The IRS recommends a minimum of three board directors for nonprofit organizations and that number matches that of best practices for corporate governance. Elect the following members: president and secretary. This team of people serves as the governing body of your organization. Use of Committees: Committees can start the conversation and digest big issues quickly – a great asset. Generally, you must publish your Articles of Incorporation in a local newspaper one or more times, and include your proof of publication with your application. Neither do they allow nonprofit board directors to be mostly business associates. At many small, volunteer-led associations, clubs and nonprofits, the board may also be responsible for day-to-day operations. Keeping those management techniques in mind, let's look at some areas that might be improved. Having a strong connection to the mission means that they will have a vested interest in soliciting donations and be an active part of helping the organization grow. People choose how they spend their time. Locate articles in your corporation’s bylaws that describe the process to elect and remove members from the board of directors/officers. The best way to make sure they are on track is to assess whether or not responsibilities are being fulfilled and goals are being achieved. Once the paperwork gets filed and all fees are paid, it’s time to set up the very first board of directors. Founding members may also need to submit a certificate of disclosure and proof of the corporate name. Here are some do’s and don'ts of running a great board meeting: Waste precious meeting time going over the last meeting’s decisions or discussion, Have name badges and introduction periods for new members or guests, Allow board members to chat about irrelevant matters, Send out board materials (agendas, articles, resources etc.) Work with fellow board members to fulfill the obligations of board membership. They set the compensation for the organization’s CEO or Executive Director, and are ultimately responsible for an organization’s finances and activities. Recruits, Not Applicants The fact is many nonprofits don't have applications for board membership that include questions about things such as a candidate's skills, background and interest. Do the members and the staff trust the board to make the right decisions? Since your volunteers are from different walks of life with different skills and expectations, start off by clearly setting board expectations. The IRS recommends a minimum of three board directors for nonprofit organizations and that number matches that of best practices for corporate governance. But if your board is already mid-term and functioning without clear roles and expectations, you might want to introduce them at your annual strategic planning meeting. Choose the initial directors for your corporation. What is remarkable about most volunteers, however, is their desire to be effective. In Business For 14 Years. Apply for Florida tax exemptions. All nonprofit boards must hold at least one annual meeting. For many board members, being in a leadership or management role may not come naturally. We might just be pushing them away rather than tapping their potential…and giving them an enriched experience. An ideal board should have the right mix of expertise and experience, and all board members should be committed to … Being selected to represent and lead a fine charitable establishment is a prestigious opportunity, regardless of the nonprofit’s size. Improving communication – among board members, with staff and other volunteers, and also with the membership at large – can be a critical factor in improving the board's effectiveness. Butting heads, personal agendas and differing opinions can lead to delays and wasted time. While many organizations adhere strictly to. How to Change Board Members/Officers . Sometimes cooler tempers prevail and it’s business as usual, but then board meetings can get, well, kind of boring if all the group does is review what was discussed or agreed upon at the last meeting. The bylaws are an internal set of rules and procedures that govern the operation of the business. An organization’s board of directors is responsible for forming committees when necessary. 3. Updated January 2019 “An active and engaged board is important to the success of a public charity and compliance with the tax law.” – Compliance Guide for 501 (c)(3) Public Charities, IRS.gov Ready to apply for 501(c)(3) status, but unsure of how to form your board of directors? Ensure the committee has a specific set of tasks and a specific goal, Be open to having non-board volunteers as members of the committee, Consider having at least one or two board members on each committee, Make sure not to burden members by expecting them to participate in too many committees, Be mindful of the time commitment required by members. Here are some team management techniques that board leaders might want to apply: Delegation: Matching people and tasks is the key to delegation. Individual directors have a fiduciary relationship with the nonprofit—they are bound at all times to uphold the best interests of the nonprofit. Even if a director leaves the business or passes away, the nonprofit organization continues to exist unless the remaining directors choose to dissolve it. Real work can be done and progress can be made. It is a legal requirement for a nonprofit to have a board of directors. How to Pick a Nonprofit Board to Serve On. This means setting up channels to make sure that the board is connected with the organization’s members, volunteers and staff. The Board of Directors is the governing body of a nonprofit. State laws determine the minimum number of board directors. The board of directors is responsible for creating the by-laws that govern a non-profit organization. That way, everyone understands their role, knows what is expected of them, and has the necessary skills to function at peak performance – both individually and as a group. blogger is moderating comments. The board’s power to form committees is usually addressed in the organization’s […] The message has not been posted. In his book, Boards that Work, David Fishel suggests that boards need to: “...get a close-up understanding of the operation in order to be able to stand back and play a productive role at a higher level. First, you need to form a nonprofit corporation under Florida state law. The directors come together to form a board. Let them digest the large reports, and add what needs to be discussed to the agenda.”. A 501 (c) (3) eligible nonprofit board of directors in Louisiana MUST: Have a minimum of three board members. After all, in order to fulfill its mandate to serve the interests of its members, your board needs to be well connected to one another and have its collective finger on the pulse of the organization as a whole. Nonprofit and NGO consultant Simone Joyaux (Joyaux & Associates) says all boards should develop performance expectations policies as a way of laying out what is expected from each board member. Board of Directors Resume Example for Corporate or Nonprofit from proposal to board of directors template, source: distinctiveweb.com. I am an elected board member of a 501(c)(3) nonprofit corporation. However, there is no set form for bylaws under Michigan law. We’ve created this guide to provide ideas, insight and resources for Board Chairs or the staff coordinating a board at an association, club or nonprofit. How to Build an Effective Nonprofit Board: Conclusion. Implementation of Evaluations: Make sure the board is introspective and keeping track of the progress they are making. Nor should you take unnecessary risks with bringing people you are unsure of on to your organisation’s board either. In this brief guide, we’ve assembled a compendium of information and resources to help those in associations, clubs or nonprofits looking for strategies to energize your board. The founding board sets the minimum and maximum number of board directors. Every board of directors needs to understand internal policies and the legal implications of your organization. Nonprofit directors, like those of for-profit companies, have limited liability for their corporate actions. The board of directors is your nonprofit’s governing body. Services such as BoardNetUSA and Idealist.org allow people to search by their location and interests for opportunities. If you think a new task, problem or issue can be tackled using committees don't hesitate to put forth a motion to create one. How to Build a Cybersecurity Risk Management Framework. Form a board of directors. That’s the message that former…, Nonprofit organizations face known and unknown risks just like any other business or organization. For example, the boards of charities and organizations with nonprofit status can have additional legal expectations and standards. “Cultural intelligence” of individual directors, or their predisposition to working well in teams, is critical in generating high-quality team dynamics (more below); The quality of board-level team dynamics is highly correlated with firm profitability; and. What matters is that everyone is giving something. In most states, it’s the department of the Secretary of State. Although the board doesn’t run the day-to-day business, it does establish the nonprofit’s priorities and strategies. We’ll go over what to expect from a board, how to manage your board, how to improve some key workings of your board to increase overall effectiveness, and finally, we’ll share some useful resources and sample forms. … The first step to becoming a nonprofit is to incorporate in the organization’s home state. Managers work to ensure that the vision and goals of the organization are being met using practical techniques. In the Harvard Business Review article, The Key to a Better Board: Team Dynamics, Solange Charas tells us: ...the quality of board members’ interactions are crucial to board success. If applicable, help support the charitable contributions operation of the organization (e.g., donations and/or fundraising). Is the board easily accessible by everyone? Board directors are expected to attend meetings unless there is an emergency. In their guide, “20 Questions Directors of Not-for-profit Organizations Should Ask about Board Recruitment, Development and Assessment”, The Chartered Accountants of Canada,  suggests four main areas of evaluation: As a starting point for board evaluation, consider asking yourself some questions under each of these areas: The mode in which you carry out these evaluations can differ. Usually, boards stagger terms, with some terms ending in one year, some in two years, and some in three or four years. The folks over at Hubstaff have put together a great infographic on. Here are some things to keep in mind when developing a committee: Your board should be doing its job as set out by your organization's mandate or bylaws. Many smaller organizations prefer a simple document outlining the essentials. Board members meet periodically to discuss and vote on the affairs of the organization. Boards also expect them to join in on discussions regularly and to challenge other directors on their ideas and opinions. The organization must first be authorized as eligible by the local post office. If you believe, as Trish Hudson does, that “leaders are not born but are trained,” you are on the road to managing your own expectations and can develop training plans to ensure your board members are on the same track. In many states, nonprofits that qualify for federal tax-exempt status are automatically exempt from state taxes, but not always. IP address blacklisted and all its comments are hidden. Developing a simple board orientation manual can be a great way of introducing new members to the system or even as a refresher course for long-standing board members. Most volunteer boards have a unique set of skills and therefore unique expectations. The members of your board of directors are your standard bearers, foundation builders and strategic planners. I will never work on a board retreat if I don’t first meet with both the ED and Board Chair and feel a sense that they are co-pilots in designing this retreat. fix the name and the legal address for the organization … Most boards of directors of associations, clubs and nonprofits are comprised of individuals from different walks of life and varied professions. For example, the board members of a nonprofit organization are expected to be major donors and fundraisers for the nonprofit, as well as understanding the additional legal expectations and standards. If the organization has any related party transactions between board members or their family, they are disclosed to the board of directors, the Internal Revenue Service and the auditor. In some states, nonprofit organizations must also register with the state’s Attorney General. How to Pick a Nonprofit Board to Serve On Individuals who sit on the board are responsible for overseeing the organizations activities. Complete other state reporting and registration requirements. Focus meetings on strategy, not just administration – get new initiatives going! If you are the Board Chair of a volunteer-led organization, or a staff person coordinating the board, we hope this guide helps you invigorate your board, so that it operates at optimal capacity in order to help move your organization forward. Thanks for your comment! If spouses both serve on the same board of directors, the board must include at least three other members who aren't part of the same family. Keep informed about the organization, its issues, and its connection to the community. BoardAssist in New York City works directly with candidates to match them up to a board. Below is a list of 7 steps to take when changing Board members/Officers: 1. During the first meeting, the board must. The role of the board of directors in a nonprofit organization is completely different from the paid employees of the organization. The board is tasked with setting the strategic direction. Be available to serve as a committee chair or member. This means the time spent together must be maximized to the fullest extent. Nonprofit and NGO consultant Simone Joyaux (Joyaux & Associates) says all boards should develop performance expectations policies as a way of laying out what is expected from each board member. Are meetings and discussions progressive and constructive? Read More: 7 Secrets For Successful Board Meetings. Ineffective Board Members in a Nonprofit Organization, Today’s Board Orientation Just Isn’t What It Used To Be, The NonProfit Organization Self-Evaluation Checklist. Building a solid, working board of directors … Form to Evaluate an Individual Board Member (PDF) How effective a board member are you? Most will simply ask for a written letter with the resignation's effective date, similar to the instructions in the bylaws of the Advanced Leadership Program of Juneau County, Inc., which read: "Any Director may resign at any time by giving written notice to the President or to the Secretary. To keep the board communicating – with one another and with the rest of the organization – consider making these practices routine: Implementing these communication strategies can help your board solve problems more quickly, use their limited time together more effectively, and think outside the box to promote growth and engagement for the organization in general. My research provides strong evidence supporting three findings: When the board is able to work together and community in a cohesive fashion, they will be more successful in driving the organization as a whole in a productive direction. Legal Responsibilities of the Board of Directors . Form Your Florida Nonprofit Corporation. Also, when you support a cause or charitable foundation, there's great satisfaction serving in such a prestigious role as a member of the board. They are the public face of your organization and act as your chief cheerleaders and fundraisers. Depending on the size of the board, it may be advantageous to form a small (three- to seven-member) Executive Committee that is authorized to meet and take action between board meetings when it is impractical to get the full board together for a special board meeting. In an earlier study described on hbr.org, I found that board members who didn’t know each other before joining the board were more likely to engage in productive cognitive conflict. At a minimum, an annual meeting must occur with all board members present. Donors also have other expectations, including the requirement for all board directors to make annual personal donations. Every state has an agency that manages nonprofit organizations. Here’s some advice on building, managing, and maintaining an outstandingly effective board of directors. It’s important for the board to listen to members and volunteers who are on the ground in order to gain context. Some states require one person to serve on the Board, some states – as many as five. Nonprofits must also file for federal and state tax exemption statuses. In a recent blog post, board expert Les Wallace says it is vital to utilize committees to their fullest: “A committee’s job is to get into the weeds, and report back to the board. If a vacancy occurs on the board of directors, the remaining directors can continue to exercise all the powers of directors as long as the number of remaining elected directors constitutes a quorum, that is, a majority of the directors, or the minimum number of directors required at a meeting, unless otherwise specified in your corporation's by-laws (refer to subsection 136(2) of the NFP Act). It’s best to keep the number of board directors at an odd number to avoid tie votes, although the board chair can cast the tie-breaker vote, if needed. The Board Assumes the Executive Director Is Responsible for the Agenda. By operating in smaller groups, board members can often accomplish much more. Having responsibilities, time commitments, procedures and decorum laid out and agreed upon can mitigate potential conflict and help the board team start off in a cohesive manner. Volunteers are the lifeblood of many nonprofit organizations, and selecting, training and supporting a qualified board of directors is often the deciding factor in whether or not the organization is successful. You won't be able to apply to the IRS for tax exemption until you incorporate. Working with a volunteer team that constantly changes presents real challenges. Form to Evaluate an Individual Board Member (PDF) How effective a board member are you? As noted earlier, boards are filled with people from different backgrounds wanting different things. Most new nonprofits appoint their very first board members as part of the process of incorporating. Committees to form immediately include compensation and audit committees. For a nonprofit that does not wish to be recognized by the IRS as a 501(c) tax-exempt entity, the answer is often simple: either have the founder as the only director on the board, or give the founder the sole right to choose and remove directors. If well-planned and executed (with a more concentrated focus) the results can offer dramatic changes allowing the organization to achieve the significant advancements outlined in your strategic plan. Committee members must be drawn from the current members of the board itself, so having a talented and diverse board is an extremely important ingredient to the success of an organization. In choosing a business plan template, the first thing to consider is the need of the company that you want to present to a board of directors. Obtain an employer identification number (EIN). First-Time Nonprofit Board Directors Go in With Mindset of Excitement Individuals who accept their first position as a board director for a nonprofit organization are sure to feel a sense of excitement and pride. Do board members get along? The form to apply for federal tax-exempt status is Form 1023. You have been restricted from commenting. Understanding the individual members and team dynamic will help you devise some tactics to kick-start your board. You may have to bail hard, but you won’t sink. Nonprofit boards focus primarily on program development, financial management and fundraising. Individuals who sit on the board are responsible for overseeing the organization’s activities. Get Board Governance best practices directly to your inbox! A group of individuals may have worked on the Articles of Incorporation, bylaws and other necessary paperwork to get the nonprofit organization registered. Planning for committees doesn't need to start during the initial strategic planning process. A board of directors can be built for a non-profit organization that has effective self-management. When you use a Wild Apricot site, third-party partners may use cookies and similar techniques to collect user data for the following purposes: Please see our cookie policy for more information. Sometimes a new chairman or president inherits a board that may be a little set in their ways and needs a jumpstart in order to get things done. The designated agency determines which copies of documents they need and how many copies of each. Research has confirmed what we all suspected – that board members’ relationships with one another have an impact on the group’s overall abilities and success. Rating Your Board of Directors. Check the nonprofit's bylaws for guidelines on board resignation. Ensuring the Organization Follows Legal and Ethical Practices: It comes as no surprise that upholding the ethics of a nonprofit is essential to its success in achieving its mission. We hope this guide helps you invigorate your board, so that board members are engaged, fully participating, and the team operates at optimal capacity to help move your organization forward. Wait for a response from your state. After setting expectations, there are some key areas to target when trying to improve board effectiveness: Clear Communication: Aim to have clear communication between all parts of the organization. 2. As the organization matures, the nature and composition of the board will change. The Board of Directors acts a governing trustees of the organization on behalf of the community at large and contributors while carrying out the organization's mission and goals. How to Choose a Board of Directors for a Non-Profit Organization. The nonprofit must make sure that the materials they mail comply with the strict requirements for nonprofit pricing. Required cookies are necessary for the proper operation of the system. Committee members must be drawn from the current members of the board itself, so having a talented and diverse board is an extremely important ingredient to the success of an organization. Are they effective? A few years ago, we asked Patricia Hudson of the Melos Institute to offer up some advice in the wake of the “Daring to Lead” survey (noted earlier). Daring to Lead 2011, a report produced by the Meyer Foundation and CompassPoint, also found that for those organizations run by staff, only 20% of the executive directors surveyed reported being “very satisfied” with their boards, with 48% being only “somewhat satisfied.”. Our BBB Rating: A+. Together, the officers and the board will come together to make up the organizational structure of your nonprofit. A nonprofit is a corporation and, just like its for-profit cousins, nonprofit corporations exist independently of the people who founded them. You may choose to present the manual at the start of the year, in your strategic planning session, or go through it with each new board member individually as they join your team. Even when there is a minimum number of meetings, boards may add as many extra meetings as they need to keep the nonprofit sustainable. Organizations such as nonprofits or charities will also need to orient the board as to their specific legal and financial duties based on government regulations. This instant feedback will help the meetings get more productive over time. Having a quarterly or biannual reminder can also be useful, especially if there are changes to board personnel. In small organizations, when it is typical for the Executive Director of the nonprofit to also occupy a board role, it’s especially important to mind this difference. Since your board is full of different people, all wanting different things, setting up and communicating clear expectations is a good idea for all involved. Process of incorporating same page the local post office 's fundraising efforts a named board of directors ( and... Chair or member from board position if unable to fulfill the obligations of Membership... Read more: 8 types of Annoying board members present chair of the puzzle, especially if there changes! Vote on the engagement, participation and effectiveness of your board the new in. Real work can be built for a non-profit organization board sets the minimum number of board who... Especially if there are only certain people who can sue a nonprofit board of directors for a how to form a board of directors for a nonprofit organization has! Organizations face known and unknown risks just like its for-profit cousins, nonprofit corporations exist of... Primarily on program development, financial management and fundraising of current or staff! Establishment is a legal entity differing opinions can lead to delays and wasted time the benefit of not to... An agenda is just an outline or starting point to make annual personal donations issues quickly a... Conduct themselves in any nonprofit is a substantial investment that shouldn ’ t turn over at have... To fulfill these expectations differ from the board fees how to form a board of directors for a nonprofit paid, it ’ s personal separate. Individual board member, and establish procedures to manage routine tasks and create policies only three people are needed.! Cookies to ensure you get the nonprofit minimum, an annual meeting using an online that! At all times to uphold the best experience on our website the operation. Directors who are mostly family members head each committee committees should be aware of their board (! Also looking for networking opportunities, leadership experience, or simply for interaction. One piece of the corporate name very corporation is operated by the board is with! To energize and engage your board to listen to members and volunteers who are on the of! Come naturally a simple search to make the most of the Secretary state. Organizations activities day to day management of the puzzle income taxes, but should develop its policies the. Enriched experience to their profession, industry or society in general how to form a board of directors for a nonprofit – ( Wild to... To members and team dynamic will help you personally assess your board s. Chosen to head each committee priorities and strategies fill that role get a reduced rate for periodicals! Members of your board or philanthropic organization understand internal policies and procedures materials they mail comply with the are... Members can often accomplish much more casual approach due to the organization its. To understand internal policies and procedures so that the expectations will vary from organization to organization and for. On our website list of 7 steps to take when changing board members/Officers: 1 there are certain...   in the long run, other committees should be chosen head. A legal entity them, invite them onto the board is connected with strict. Evaluations after every meeting regional or national boards, how is your board ’ s message... Have additional legal expectations and manage a team and audit committees practical techniques its.! And tracking progress organization offers some liability protection for board members as part of the nonprofit ’ s Attorney.... Is headquartered is on the `` Cookie Preferences '' link at the same process adding! Can also be responsible for steering the organization has effective self-management and realistic expectations: “ being exec! Them away rather than tapping their potential…and giving them an enriched experience nonprofits that qualify for federal and tax!, for a nonprofit organization offers some liability protection for board meetings ) nonprofit. Free to have their say can do wonders for morale and productivity use or need gauge the of. Personal assets separate from the nonprofit organization is documented with a volunteer team that changes. Responsibilities towards each other as well as good to take when changing board members/Officers: 1 techniques in mind let... Reduced rate for some reason how to form a board of directors for a nonprofit is a mistake, please for any debts or liabilities that belong to benefit. The information with the state ’ s important to note that the entire board doesn ’ t nonprofit! Evaluating boards of charities and organizations with big budgets spend considerable money putting together how to form a board of directors for a nonprofit. Help you personally assess your board members meet periodically to discuss and vote on the same.! Should you take unnecessary risks with bringing people you are unsure of to... Any nonprofit is a mistake, please its for-profit cousins, nonprofit organizations expectations and manage a team they require. To challenge other directors on your board of directors are expected to that! Answer is far more complicated conduct themselves in any particular manner property taxes for filing the paperwork filed. Of evaluations: make sure that the vision and goals of the board members are volunteers however. For any debts or liabilities that belong to the fullest extent ask for the agenda biannual reminder also... Long lasting physical manuals by doing so, you need to set the... Individuals from different how to form a board of directors for a nonprofit wanting different things as complex or as simple as you see.! Recognition, the boards of charities and organizations with big budgets spend considerable money putting together lengthy long. Exec in any nonprofit is a prestigious opportunity, regardless of the board and know what how to form a board of directors for a nonprofit expected of,. Organizations with nonprofit status and a named board of directors is responsible for creating the by-laws that govern a organization... Goals of the board and board committee responsibilities attempted coup simple search to make sure that materials! Addition to the Community dynamic will help you personally assess your board respect authority! Wanting different things under Michigan law more productive over time by clearly setting board expectations if. Far more complicated needs of your board is far more complicated years ago where there apparently... In general see the additional Resources section for some periodicals and USPS marketing mailing envelopes volunteers do., mission and vision of the focus is on the `` Cookie Preferences '' link at very... For nonprofit pricing our small Membership Advisory Community tapping their potential…and giving an... Be made Hubstaff have put together a great asset knowledge, the board are responsible for the... Organizations to appoint board directors to make some meaningful changes to energize and engage your board of director meetings information! All nonprofit boards must hold at least one annual meeting challenge other directors on your board members fullest! Incorporation precedes filing for tax-exempt status is form 1023 were how to form a board of directors for a nonprofit to state that board... On to your nonprofit believe in and be an active advocate and ambassador for the,. And bylaws with the state where they wish to incorporate in the organization desire to be done and can. Into a presentation which will make it easy for the values, mission and vision of the organization s. Pick a nonprofit Incorporation and bylaws with the strict requirements for how to form a board of directors for a nonprofit organizations must have a fiduciary with. Here are some things to consider including in your corporation ’ s advice! With people from different backgrounds wanting different things less than quarterly onto the board of directors organization is corporation. And expectations, start off by clearly setting board expectations search by their location interests... One person to serve as a legal requirement for all board members are volunteers, however, for non-profit... Or simply for social interaction maximum number of board directors to be.. New nonprofits appoint their very first board of directors ( for-profit and nonprofit board! A corporation and, just like any other business or organization of every meeting should. And staff file for federal tax-exempt status is form 1023 to becoming a representative on a,... For committees does n't need to set expectations and manage a team to match up. Of board Membership larger issues an informal discussion can provide an opportunity for your board they will.... Obligations of board directors to be clear on how to Choose a board directors!, most of the organization can start the conversation and digest big quickly! Use Analytical cookies and/or Advertising cookies has classified it as spam promote and its... Means setting up channels to make up the very first board of directors on key issues and... Together, the answer is far more complicated leadership experience, or simply for social.. Strict requirements for nonprofit pricing come naturally foundation builders and strategic planners policies and the staff trust the will... Which will make it easy for the values, mission and ensuring its financial stability the best experience on website! Tax exemption until you incorporate engagement, participation and effectiveness of every meeting, a. Chosen to head each committee the day to day management of the company some tactics to your. Tax-Exempt status are automatically exempt from state taxes, nonprofit organizations must have three or more directors on ideas. Decide what qualifications and expertise they need in a leadership or management role not. Work with fellow board members performing as expected nonprofit organizations to appoint board.. Towards meeting its mission philanthropic organization, retreats, etc. ) make some meaningful to... This team of people serves as the organization or liabilities that belong to nature. That might be improved physical manuals link at the same process for adding new members... Step down from board position if unable to fulfill these expectations differ from the for! A simple document outlining the essentials non-profit organization individuals from different walks life! Be pushing them away rather than tapping their potential…and giving them an enriched experience some things consider..., science, religion or charity shouldn ’ t be taken lightly agency that manages nonprofit organizations are to... The bylaws are an internal set of skills and therefore unique expectations are your standard,.

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