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.
The Rebuttable Presumption of Reasonableness procedures, described in Treasury Regulation Section 53.4958-6(a), were promulgated to help charities avoid overpaying certain individuals and entities (known as disqualified persons) that might be able to exercise influence on the charity’s decision-making. Among those included as disqualified persons (DQPs) are: Directors (board members),...
Many nonprofits fail to respect the differences between directors and officers. When an individual holds both the position of director (i.e., board member) and an officer position (e.g., chair of the board), we often see such individual elected for only the officer position. It is then assumed that such...
I’ll be presenting on Governance and Diversity, Equity, and Inclusion for The Sanford Institute of Philanthropy and The College of Law at John F. Kennedy University on Thursday, May 2. Recent movements have energized the drive towards greater diversity, equity, and inclusion (DEI) across our society. Nonprofits have played...
I’m honored to be co-presenting a live webinar, Practical Strategies to Increase Board Diversity, with Vernetta Walker for Lorman Education Services on Monday, March 25, from 10 – 11:30 am PT / 1 – 2:30 pm ET. UPDATE: This webinar is now available on demand and you can get...
The board of directors is the ultimate authority of a nonprofit corporation and ultimately responsible for its activities and affairs. Directors must each meet their fiduciary duties of care and loyalty in their actions and decision-making. They should do so with a focus on furthering the nonprofit’s mission in...
I’ll be on Nonprofit Radio this Friday, February 22, at 10:30 am PT / 1:30 pm ET talking with host Tony Martignetti about diversity, equity, and inclusion (DEI) and a nonprofit’s governing documents. This follows up on part one of our discussion on DEI and nonprofit governance from February 15, which is now...
As we’ve discussed in a previous post, one way to anchor diversity, equity, and inclusion (“DEI”) as a core value of an organization is to include DEI principles and language into an organization’s Bylaws. A common starting place for nonprofit corporations is the composition of the board of directors....
Nonprofits should be at the forefront of encompassing diversity, equity, and inclusion (“DEI”) into their governance and operations. While discussions regarding DEI are increasingly prevalent in the nonprofit sector, the next, more difficult, step forward is to turn the discussions into action. How do we, as part of the...
Many nonprofits use the term “ex officio director” (or “ex officio board member”) without a clear understanding of what the term means and how to properly incorporate one or more ex officio directors in their governance structures. Definitions The term director refers to an individual serving as a voting...
The Center for Effective Philanthropy reports that 70% of organizational leaders in the nonprofit sector consider staff diversity to be of great importance, yet only 36% believe they have actually achieved it. Nonprofit organizations that fight to improve social problems should consider incorporating explicit language on the importance of...