Nonprofit Governance: Board Composition

A nonprofit corporation’s board composition is a critical part of its governance. And many nonprofits devote substantial resources (including time) to development of a skills and background matrix, recruitment, and orientation. But a great many nonprofits do not. Too often, board members are simply asked to think of good people to invite or the executive […]

Restatement of the Law: Duty of Loyalty

The ALI Restatement of the Law, Charitable Nonprofit Organizations (the “Restatement”) provides: “A fiduciary of a charity has a duty to: … [a]ct in good faith and in a manner the fiduciary believes to be in the best interests of the charity in light of its purposes ….” The Restatement explains: [W]ith the exception of […]

Stipulated Judgment Against Fiscal Sponsor for Misspending Donations

Fiscal sponsors must respect laws related to protecting assets restricted to furthering the charitable purposes of specific projects . If funds intended for a particular internal (Model A) project are diverted and used for other purposes (e.g., the fiscal sponsor’s general operating expenses), there may be legal repercussions. This was very recently exemplified in a […]

Where Nonprofit Boards Fall Short

A few months ago, Harvard Business Review published a great piece by Dominic Barton and Mark Wiseman titled Where Boards Fall Short.  In the piece, the authors examined the ways in which boards of directors are failing their organizations and discussed areas in which we should begin to make changes regarding how we approach board […]