A nonprofit embezzlement incident is emotionally devastating, causing nonprofit leaders to question their own judgment and management ability. It erodes the public’s trust, jeopardizes grants
Nonprofit board members must understand and fulfill their fiduciary duties or they expose the nonprofit they serve and themselves to risk.
For a nonprofit organization to succeed, it must have a high functioning Board. While management deals with the day to day operations (planning, organizing and executing the organization’s programs), the Board of Directors provides oversight over the organization’s management, finances, mission, and strategic goals.
All Boards make recruiting mistakes. They carefully vet and enthusiastically elect a new Board member. They hold an orientation, provide information about the organization’s programs, set
A nonprofit’s board of directors is legally responsible for exercising the care an ordinarily prudent person in a like position would exercise in overseeing the organization’s operations. This includes the organization’s finances and legal compliance.
The IRS recently issued a favorable ruling for nonprofits looking to move their domicile from one state to another. Common reasons that nonprofits seek to change their state of incorporationinclude a change in physical location, increasing regulatory burdens, or a lack of meaningful connection to the original state of incorporation. In such cases,
Nonprofits corporations are required to have a registered agent in their state of domicile and in each state where they are registered to do business. The purpose of a registered agent is to ensure that there is a place with a street address (as opposed to a P.O. Box) where an organization can be contacted or served with notice of a lawsuit or other legal action.
At times, issues will give rise to spirited debate among Board Members who each possess valuable yet different skill sets and different points of view. The Chair should make efforts to mediate differing opinions and encourage consensus on actions or policies that represent the best aspects of all points of view.
Rubber stamp boards tend to take a hands off approach to their duties and simply approve everything put in front of them by management without actively participating in deliberation and debate. This approach is dangerous for the nonprofit and the directors.
The micro-managing board members show up to their first board meeting and before they have done anything of substance for the organization, they want to revamp the reports, review the nonprofit’s journal entries, question every expense, and critique the Chief Executive’s management style. One might rightly ask whether these activities are adding value. I would argue that nine times out of ten they are not.
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