[of which RID will be one] will work to determine the long-term funding strategies. When the moratorium lifts and testing resumes, new test dollars will flow into the LLC. There may be the need to increase the cost of some or all of the tests. New funding streams for testing–such as grants and contributions from other stakeholders–will also flow into the LLC.
As far as shortfalls that the new LLC may experience, the multi-stakeholders will work collaboratively to address this matter. Finding solutions will be a collaborative process, versus the responsibility of a single organization. Historically, RID covered those losses through other funding streams like publications, membership dues, and donations. This put other programs of RID and its overall financial stability at risk and is one of the factors motivating the decision to separate testing.
The capacity to find long-term solutions is greatly enhanced through a multi-stakeholder approach to testing. RID has worked in a silo for too long. There are many stakeholders that share in the goal of having a qualified interpreting workforce to ensure linguistic access for people who are deaf. With ownership in the new LLC, the interests of other stakeholders is fully recognized and will create greater commitment to sustainability. The new LLC allows these multi-stakeholders to work together to find creative and dynamic solutions rooted in community collaboration.
Who will be the members of the LLC?
The vision for the separate LLC testing entity was just approved by the Board on December 20, 2015. The partners will now be invited and negotiations around terms and agreements will begin. As partners are determined and the percent of ownership they will hold is determined, members will be informed. During the coming months, the Board and Interim Executive Director will be conferring with lawyers, the advisory councils, and other volunteer leadership to assist in guiding the decision-making process. The process has just begun and will take time to complete.
If it is a single member LLC, how will RID protect itself from liability in the event the corporate veil is pierced?
“Piercing the corporate veil” is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. RID will immediately set up a single member LLC, owned by RID. However, it is the intention of RID to evolve this LLC into a multi-partner LLC. Our legal counsel is advising us to ensure that this intention is achieved. The number of partners is still to be determined and will depend upon the terms and agreements negotiated with each partner. As new partners are identified, the RID Board will vote to assign an agreed-upon percent of ownership of the LLC to each partner. RID will retain some ownership as well.
While we do not anticipate the LLC continuing as a single owner corporation, likely it will be operated as such for some period of time. During that time, RID will consult with our legal and financial advisors to ensure that we are acting so as to prevent piercing of the corporate veil. RID will maintain arm’s length relationships with the LLC, observe corporate formalities in terms of behavior and documentation, and avoid intermingling RID funds with the new LLC’s funds. The RID Board and Interim Executive Director have a duty to protect RID as an association and its remaining, non-testing assets. It is this duty that drove this business decision and will continue to drive the conduct of RID as we execute this task.
One question for you is that if the testing will be established under a new non-profit, will all the revenue associated with that new non-profit come strictly from testing fees or will part of our dues to RID be used to support it?
The new testing entity LLC will operate from its own autonomous and separate budget. RID will operate from its own and autonomous budget. Member dues will remain within RID’s budget and the new testing entity LLC will operate from testing revenue.
Naturally, there will be a period of transition. As we begin the transfer of test-related assets to the LLC, and the multi-stakeholder partners are identified, we will have a better understanding of what RID’s [and each owner’s] commitment can be related to start-up funds or loans to get the LLC underway. All of this information will be shared with members as it is solidified.
Part of the rationale for this decision is that it allows for the separation of membership and testing funds that have long been conflated. It allows the LLC to autonomously focus on testing functions, which is more consistent with testing industry standards, and RID to focus on those programs and services that support members.
How will RID ensure that testing materials are representative of diverse populations?
RID, through our certification function, will be working with the membership to establish the standards that any test must satisfy to be accepted for RID certification. RID membership passed a motion in 2007 related to the creation of such criteria. The intent of that motion has not yet been fulfilled. With the establishment of the new LLC for testing, this motion will now be addressed and members will vote on what criteria to adopt, which may include criteria to ensure that testing materials are representative of diverse populations. Thereafter, all tests recognized by RID will have to demonstrate and satisfy the criteria before the members vote on whether such tests will be recognized by RID for certification.
RID will seek volunteer leadership to assist with identifying the criteria for test recognition. RID will seek diverse representation in that process. Once the volunteer leadership defines the criteria to be outlined per the 2007 member motion, the criteria will be presented to the membership for a vote. The parliamentary procedure associated with motions will allow the members to amend and determine criteria, which is representative and acceptable.
RID states that the membership does not have to vote in this action because it does not affect “certification.” However, certification as it has always been understood by the membership goes hand in hand with testing. Please explain what power provided by the bylaws allows the board to act unilaterally to change the certification program which has always been understood as testing and insurance of the certificate.
It is true that the distinction between testing and certification has not been clearly established or well understood. These two functions have long been conflated, although were always distinct. RID does not award certification based on a test score alone. There are other standards that must be met that are unrelated to the test–such as education/training and work experience and compliance with the NAD-RID Code of Professional Conduct (CPC).
Further, members have never voted on testing functions. They do not vote on test design, content or rating/scoring, testing vendors, or administrative policies and procedures. Members have served as Subject Matter Experts [SMEs] through volunteer leadership [and the need for SMEs will continue within the LLC]. SMEs, along with testing consultants and vendors, have developed tests that have been administered by RID to date. But, the specifics of those tests are not within the purview of membership voting rights. The members have voted on what certifications RID would award and what criteria an individual would have to meet to achieve certification, such as passing of tests, educational, and work experience standards. These rights will continue.
The Articles of Incorporation and Bylaws do not obligate the organization to provide test administration. The Bylaws provide the guidelines for one to maintain certification. This decision does not impact or change the Bylaws. This decision does not impact that responsibility of the membership to setting certification standards. RID will continue to award certification based on a set of standards that have been approved by the membership. See the full Bylaws at https://drive.google.com/a/rid.org/file/d/0B3DKvZMflFLda1BVN2EyX25FdTA/view
Relevant sections follow:
Article III. Section 2.
A.Certified Member: Any interpreter or transliterator of American Sign Language and/or English who holds valid certification accepted by the RID.
Article IV. Section 2.
A. The Board may add certificates to or add or change categories for membership in RID only with prior approval of 2/3 of the eligible membership voting on the issue.
B. The Board may enter into a contract that changes, adds to, or amends certification or membership status only with prior approval of 2/3 of the eligible membership voting on the issue.
What state will the LLC be organized under?
The LLC will be formed in the state of Virginia where RID is currently located.
Who will determine the board of directors for the LLC?
The composition of the Board of Directors and how they are appointed for the LLC will be defined in the operating agreement. The multi-stakeholder representatives will collaborate on the operating agreement.
What are the tax implications to RID if the LLC is profitable?
The potential tax implications of the LLC for RID and partner stakeholders will be monitored and guided by legal and financial counsel. Related business decisions impacting the LLC will be made as needed.
RID has much history and insight to bring to this new LLC. There are many knowns in this process–what testing costs, where loss is likely, what resources are needed to meet expenses, what test development costs, what pool of candidates exist, what trends exist in the education of interpreters and the employment of interpreters that impact the testing pool, etc. This information will be of great value to the new LLC.
Should the LLC be profitable, the amount of tax implication is projected to be less than has been the annual losses related to testing that RID has been obligated to sustain unilaterally.
What are the reasons for choosing an LLC versus a C corporation, joint venture or general partnership?
The decision to form an LLC is based on a broad range of factors, including both short- and long-term goals and the recommendations of legal counsel. The LLC most effectively meets RID’s needs and vision at this point in time. Should the eventual partners in the multi-stakeholder organization, upon advice of legal and financial counsel, feel that an alternative business structure is needed, the LLC can evolve into any number of other structures.
How much capital will RID invest in the LLC to properly capitalize it?
Naturally, there will be a period of transition. As we begin the transfer of test-related assets to the LLC and the multi-stakeholder partners are identified, we will have a better understanding of what RID’s [and each owner’s] commitment will be related to start-up funds or loans to get the LLC underway. All of this information will be shared with members as it is solidified.
Will RID staff become employees of the LLC?
RID will transfer its existing assets related to testing. These assets will include test funds, staff whose job descriptions are related to the testing function, and test materials/resources.
RID indicates the testing system is a money losing venture, what will be done if the LLC also operates at a loss and eventually is forced to close?
As far as shortfalls that the new LLC may experience, the multi-stakeholders will work collaboratively to address this matter. Finding solutions will be a collaborative process, versus the responsibility of a single organization. Historically, RID covered those losses through other funding streams like publications, membership dues, and donations. This put other programs of RID and RID’s overall financial stability at risk and is one of the factors motivating the decision to separate testing.
The capacity to find long-term solutions is greatly enhanced through a multi-stakeholder approach to testing. RID has worked in a silo for too long. There are many stakeholders who share in the goal of having a qualified interpreting workforce to ensure linguistic access for people who are deaf. The new LLC allows these multi-stakeholders to work together to ensure the stability of testing of interpreter competence.
RID and many stakeholders have a deep and abiding commitment to providing a mechanism whereby work readiness is determined. RID believes that leveraging resources through a collaborative and jointly shared LLC ensures the ability to sustain this commitment. If time and further experience proves otherwise, then alternatives will have to be identified. For example, are there alternatives for designating readiness to work that do not require testing? RID, along with like-minded stakeholders, will continue to move forward in commitment, dedication, and the belief that a well-defined and logical plan of operation will achieve the intended vision.
The following were the original FAQs, posted on 12/22/2015
How can RID still award certification if you are not administering the test?
Certification and testing are distinct from each other, two separate functions. Certification is a confirmation that a certain set of requirements have been fulfilled. Testing is a moment in time measure of the quality, performance, or reliability of something–in our case, someone’s ability to interpret.
For example, you can’t earn an RID credential solely by passing an exam. You must also meet the education requirement before that credential is awarded to you.
Therefore, RID can continue to award certification based on a set of standards that have been approved by the membership.
I’m certified already, how does the Board’s decision impact me?
This decision has absolutely no impact on the credential you hold. You will continue to function as you have by maintaining that/those credential(s) you hold through meeting the requirements of the Certification Maintenance Program and adhering to the NAD-RID Code of Professional Conduct. RID will retain Certification, CMP, EPS, publications, advocacy, and member services.
I’m not yet certified, how does the Board decision impact me?
This decision by the Board doesn’t directly impact you; however, the moratorium is what is currently impacting you and may continue to do so until performance testing resumes. The Board will be revisiting the question of when and in what order the performance test moratorium might be lifted in March 2016, once more information is known about the multi-partner LLC that is envisioned and the status of rating of tests taken prior to the moratorium effective date. RID will retain certification, CMP, EPS, publications, member services, and advocacy, so interpreters working toward certification are encouraged to join and stay connected to the organization supporting your profession.
How does this change the membership structure?
The decision to remove the testing function from the RID structure will not have an impact on the current membership categories, Article III, or on the member voting rights.
Is a Bylaws change required for the LLC to be established?
No. There is not a requirement for a Bylaws change to implement the Board’s decision to establish a separate LLC testing entity. The following outline some of the member rights as outlined in the Bylaws:
- Members retain the right to determine the categories of membership within RID and what certifications RID awards.
- Members will retain the right to determine the standards any test must satisfy to be accepted for RID certification. This decision paves the way for the 2007 membership motion to be addressed and implemented. That motion was for RID to establish the criteria by which tests other than its own could be recognized. That motion has yet to be fulfilled.
- Members do not vote on test design, content or rating/scoring of tests. This has always been determined independent of the membership. Members have served as Subject Matter Experts (SMEs) during the test development and implementation process through volunteer leadership, and, SMEs will still be needed to work within the autonomous LLC testing entity.
How does this eliminate the conflict of interest that members have been concerned about related to certification and membership?
It doesn’t entirely eliminate the conflict of interest, but it does significantly reduce it. RID will award a credential for the passing of an interpreter exam that satisfies the set of standards adopted by the membership. But, the test or tests RID recognizes will no longer be administered by RID. Instead, they will be administered by the new, independent, and autonomous testing entity.
Potentially, the RID membership could decide to recognize tests from more than one entity–based on a set of standards that would have to be demonstrated and met. For example, the membership might decide to recognize the BEI and/or one of the Healthcare Interpreting tests for RID certification, in addition to the tests administered by the new independent and autonomous testing entity.
Who will set the standards within RID as to who receives RID certification?
Members will retain the right to determine the standards any test must satisfy to be accepted for RID certification. In 2007 the membership passed a motion to establish the criteria by which tests, other than RID’s, must satisfy to be recognized. That motion has yet to be fulfilled but will now be addressed, and the criteria brought back to the membership for review, modification, and approval.
How can testing be a financial strain to RID since we pay so much money just to take the exam?
There is a misperception that testing for RID has been a profitable endeavor. It is in fact, the opposite. Testing revenues do not cover testing expenses. This is in part due to the labor intensity of rating our performance testing. It is also because we have, and will always have, a small testing pool–our field is highly specialized. In a 15-year period [2001-2015], RID loss approximately $150,000 per year in 10 of those years. There has been a consistent loss in the past 6 years.
If we were to only test with the knowledge exam, the costs would paint a different picture. However, the intricacy and complexity of our performance exam costs more than we take in. As a result, RID has had to use other association funds to cover the cost of testing, resulting in delays and backlog in related areas such as the CMP and EPS, among other programs and services.
Testing is profitable for some testing entities, however, that does not equate to testing in the sign language interpreting profession. Testing of professionals such as teachers, HR specialists, nurses, etc., have a substantially larger pool of candidates whom will be taking the test. The more test takers, the more revenue to cover the cost. The sign language interpreting profession has a much smaller pool and limited number of test takers.
Was NAD involved in this RID Board decision?
NAD President Chris Wagner and NAD CEO Howard Rosenblum joined the Board on Saturday, December 19, 2015. The RID Board discussed varying business models for RID, the moratorium, and our shared vision and partnership and what that looks like moving forward. NAD is aware of this plan, and RID Board representative(s) will attend their January Board meeting for further discussion and planning.
In addition, it is important to note that the NAD has had and continues to have seats available for representation on three main program committees: Certification Committee, Professional Development Committee and the Ethics Committee.
Who will be a part of the new LLC testing entity?
The vision for the separate LLC testing entity was just approved by the Board on December 20, 2015. The list of partners has not been finalized as we are just in the beginning phases of implementation of the vision. More information about the partners of this multi-stakeholder entity will be provided as they are identified.
Did the moratorium drive this decision?
No. During the Board of Directors Face to Face meeting, December 15-20, 2015, the Board discussed the findings of the Testing and Certification Risk Assessment. It were these findings coupled with financial data, the organizational assessment conducted in the Spring, and feedback from the Council of Elders, Deaf Advisory Council and Certification Committee that provided the foundation for this decision.
What drove the decision for the moratorium?
The risk assessment was a project assigned by the board to HQ in May and was/is totally unrelated to the moratorium. The December 11, 2015, vlog from Interim Executive Director Anna Witter-Merithew, provides a discussion of the reasons the risk assessment was undertaken. At the time the risk assessment was started, the moratorium had not yet been discussed or considered by the Board. During the July 16, 2015, Board Meeting, the Certification Committee made a motion to the RID Board that would do the following: cease the OTC test and suspend the CDI and SC:L tests until the Certification Development and Maintenance Groups (CDMGs) could develop new tests to replace the existing tests. At that time, the Board determined that they would wait until after they received the risk assessment to make a decision. The risk assessment was not due to the board until November 1, 2015. In response, the Certification Committee wrote a follow-up letter to the NAD and RID Boards asking the Board to reconsider their July decision to delay action. As a result, at the August 6, 2015, Board meeting, the Board determined it would, in fact, sunset the OTC and suspend all other performance testing [including the NIC] until they had the chance to receive and consider the risk assessment and determine solutions to the systemic issues RID faces regarding testing.
Does the moratorium on performance exams mean that RID will never offer those certifications again?
The moratorium focuses on suspending performance testing until an administrative and development plan has been determined. This will be part of the work of the new LLC. The existing RID testing resources and assets will be transitioned to this new LLC. There was and is no intent that the credentialing of new generalist and specialist practitioners will permanently cease.
If you have additional questions that are not answered in this document, please send them to firstname.lastname@example.org so that we can update the FAQs.