2-Checklist to Audit Board Finance Fundraising Insurances.…

Adapted from “Field Guide to Developing, Operating and Restoring Your Nonprofit Board” – to get the publication, click on “Publications” at www.authenticityconsulting.com How to Minimize Nonprofit Board Member Liabilities – A Checklist to Audit Nonprofit Board Operations, Finance, Fundraising and Insurances (have on table during all Board meetings) Each Board member is personally liable, in his/her fiduciary role, for the operations and effects of the nonprofit corporation. The “business judgment rule” somewhat protects Board members from liability as long as they can show that they are trying to act reasonably and in good faith – that they are performing their duties of care and loyalty. An exception would be if there was clear evidence of intent to break the law, for example, theft, fraud, forgery, burglary, misappropriation of funds, or obstruction of justice. Liability can be significantly reduced if Board members regularly audit occurrence of certain practices. (The following is not offered as legal advice.) NOTE: Consider having an Audit Committee of independent Board members who regularly ensure that the following practices are followed. “Independent” means the members are not employees, do not regularly benefit from the services of the nonprofit and do not have close relationships with staff. Board Operations Be sure that By Laws accurately reflect Board members’ specifications of the structure of the nonprofit and how it is to ...