The Most Common Questions Asked by Nonprofit Boards
- Do we have to use Roberts Rules of Order for our meetings? No, unless your organizational documents like bylaws and policies require it. Consider formally adopting an informal meeting structure to move things along. Formal meeting procedures should be used when there is a large number of participants, as in a national meeting, or if there is greater than expected disagreement or discussion on a topic.
- As a Nonprofit Board Member, can I be paid for work I do for the Nonprofit? Legally speaking, yes. Practically speaking, maybe. You can be reimbursed for reasonable expenses. Sometimes you can receive a small stipend for unusual work. Technically, you can be paid for board service; however, this benefit is typically reserved for top nonprofits, and is generally frowned upon by government, corporate or foundation granting organizations.
- Can we reimburse expenses to our Directors? Yes, mostly. The Board can approve policy which permits reimbursement of reasonable expenses incurred by Directors, including mileage for attending events as a Board representative, reimbursement of registration or admission fees to workshops, events, etc., and overnight accommodations. Care must be taken to be sure that the Director is not receiving undue
benefit from the reimbursement. For example, the organization can reimburse dinner, but not a night of bar-hopping at an event. - What do we do with a Board Member that never comes to meetings? Your bylaws can contain language which provides that a Board Member is presumed to have resigned if he or she misses 3 (or whatever suitable number) consecutive meetings without excuse. If not, you should assign the President to speak to the errant Board Member and ask that the Board Member voluntarily resign if he or she cannot fulfill a commitment of meetings.
- There is pending legislation that will affect my nonprofit – can we talk to our legislators about it?
IT DEPENDS. §501(c)(3) are prohibited from engaging in political activity. This means that a significant part
of your operating budget cannot be used to effect legislation or political change. However, you can provide
information about pending legislation, and give information as to how the legislation will affect you. Your
members can be personally active in promoting (or opposing) particular legislation, as long as they are
acting as individuals, and not as your representatives. - Can the Directors be personally liable for liability of the Nonprofit? IT DEPENDS. Indiana Nonprofit Law protects Directors from most actions done in the course of their service as nonprofit directors. However, a Director can become liable for the Nonprofit’s actions under certain circumstances.
- If the Director personally and directly injures someone
- If the Director personally guarantees a bank loan or a business debt on which the corporation
defaults - If the Director fails to deposit taxes or file any necessary tax returns (or knows that the returns are
not being filed, and does nothing about it) - If the Director does something intentionally fraudulent, illegal, or clearly wrong-headed that causes
harm, or - If the Director co-mingles nonprofit and personal funds.
- What do we have to tell the public, if asked? Nonprofits must provide, upon request:
- Application for Tax Exempt Status
- Bylaws
- 990 tax return
- Public grant applications, if the grant funding is from a government agency, or if the private granting organization requires it
- Do we have to allow the public to attend board meetings? NO. You don’t even have to let your members attend board meetings, unless your bylaws or board policy requires it. However, it’s a good idea to be as “open” as possible to avoid appearance of unfair or illegal dealing – especially when government money is involved.
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