The governance structure in a corporation, whether nonprofit or for-profit, consists of an executive who reports to a board of directors. The executive and the board have distinct responsibilities: management and governance, respectively. But there are areas in which those responsibilities blur, and that can result in tension...
BOARDS / GOVERNANCE
An engaged board can be one of the most important organizational assets of a nonprofit. But nonprofit boards are often underutilized and are not always effective in significantly advancing an organization’s mission. Educating boards and executives about their legal duties, practical steps to take to effectively meet those duties, and best practices in mitigating exposure to organizational and personal liability/harm is key to establishing board engagement and effectiveness.
Private Benefit Doctrine – A Few Examples
The private benefit doctrine is the broadest of the private benefit rules that apply to 501(c)(3) organizations. It generally provides that a 501(c)(3) organization may not confer any benefit, monetary or otherwise, on any individual or entity that is not incidental, quantitatively and qualitatively, to furthering the organization’s exempt...
Nonprofit Radio: Back to Board Basics
I'll be on Tony Martignetti Nonprofit Radio tomorrow, July 26, at 10:25 am PT / 1:25 pm ET discussing some basic but important board issues with Tony. We may cover topics like: Is it okay to have a compensated CEO also serve as a director on the board? Is...
Overhead Myth: Thoughts from a Nonprofit Attorney
On June 17, 2013, the CEOs of GuideStar, Charity Navigator, and BBB Wise Giving Alliance signed a letter to the Donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance. Leading commentators applauded the move even while some noted that charity ratings organizations, like...
Alliance for Community Media National Conference (Part Two)
Our second post with resources to be referenced in our session at the 2013 Alliance for Community Media National Conference, Nuts and Bolts of Nonprofits and Their People, with Syvia Strobel (ACM) and Deborah Vinsel(Thurston Community Television). Key Issues in Board Governance Board's Legal Duties: Are Your Directors Meeting Them? Boards...
Changing a Nonprofit’s Mission
A nonprofit’s mission describes the purpose and reason for being of the organization. Although a mission statement should always be consistent with the nonprofit’s “specific purpose statement” described in the Articles of Incorporation, the mission statement is generally crafted with an eye to the public. A well-conceived...
ADRP Keynote: What You Can Learn From Recent Nonprofit Scandals
Everyone loves a good scandal. That's why they fill our newspapers, television programs, and popular websites. But scandals in the nonprofit sector result in diminished or discontinued services, laid off employees, penalties imposed on responsible persons, publicly embarassed board members, and the death of organizations. They also result in a...
Starting a Nonprofit: 10 Considerations in Electing the Initial Board
The board is ultimately in control of the nonprofit corporation and responsible for its actions. So, you want to be careful in determining the composition of your charitable nonprofit's initial board. Here are 10 considerations: The prospective board members should be aware and and prepared to accept the...
10 Issues to Address in Your Nonprofit’s Social Media Policy
Copyright and trademark infringement. Tip: understand the fair use doctrine. Trap: expecting attribution to offer protection against charges of infringement. Fundraising and foreign state registration requirements. Tip: check out The Unified Registration Statement. Trap: disregarding registration laws and their application to funds raised through social media (see the Charleston Principles). Events...
Screwtape’s 10 Tips for Building a Better Board
Limit the board to family and friends, people who will support whatever you want to do. If you add more board members, make sure they have a high net worth. Allocate minimal resources to recruiting; just have existing board members ask their rich friends. Don't worry about diversity;...