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The Big 4 for Nonprofit Boards

08 26 15Dayton is abundant with service-minded people. Among the most inspiring are nonprofit board members. Not only are these volunteers legally committed to steward a nonprofit, but they often give generously of their personal resources to help that nonprofit succeed.

Sometimes it can be hard for volunteer board members to keep up with all the requirements. Here's a quick rundown.

By Ohio law, board members have four duties. According to the Ohio Attorney General, these duties apply:

  • whether the group’s budget is $100 or $100 million
  • whether or not the group is formally incorporated
  • whenever an organization presents itself to the public as a charitable cause.

Duty of care

This means attending board meetings, asking questions, and getting information before making decisions. It also means exercising independent judgment and providing oversight of the Executive Director.

Duty of loyalty

When you serve as a board member, you must put your personal interests aside and serve the organization's interests.

Duty of compliance

Board members must ensure that the nonprofit is staying true to its legal mission. This duty also means staying compliant with the organization's own policies (such as your by-laws) as well as local, state and federal requirements.

Duty to maintain accounts

The board should establish a budget each year (setting expectations for both income and expense), set financial policies that protect the organization, keep good financial records, and monitor the budget throughout the year.

Next week I’ll get more specific with “10 Ways for Boards to Stay on the Up and Up”

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