Need Someone who knows Business Law
 

I've been asked to join the Board of Directors of a small nonprofit organization. It's an unpaid position.

Is there any liability in this? Like, if the Executive Director takes a bunch of federal grant money and blows it all on whores, can I be held partially responsible in any way? What if the position becomes paid (even nominally) in the future?

Are you being asked to sign anything?

Yes, if it becomes paid, you may well have some liability, but there is insurance aimed specifically at non profit boards to cover this.

In theory, anybody can sue anybody else for any reason. Even if it's totally frivolous, there are legal fees involved in defending yourself.

I don't have any specific knowledge about this area of law and am not a lawyer, but I think monster is probably right. Most non-profits probably would carry liability insurance that should cover you in that event. I'd ask them about that.

Also find out if the intend you include your details on tax returns etc. It's a very variable and gray area, generally speaking you should be fine, but if in doubt, ask them up front what liability it entails.

If you are concerned about liability, you need to consult your own lawyer, not us lay yahoos. But I would say, yes, there is the potential for liability, particularly if you are handling money. Most Directors have some immunity from liability, except in cases of deliberate malfeasance, fraud, etc.

Very Important: do they carry NDOI?

That's what protects your ass from lawsuits. We carried pretty substantial insurance for our officers and board members back when we were a non-profit.

That's a good link, Pie. You can also use Guidestar to look up their previous tax returns and see what you're getting into financially.

I think I'd have to weigh whether I'm committed to the cause enough to take the chance. Slim as it may be.

Again, grav, that's why there's NDOI.

I, for one, thank Clod for considering working for a nonprofit. If everyone took Gravdigr's point of view, there would be no charitable organizations at all. :rolleyes:

I think NDOI should exclude people who aren't "committed to the cause". People who take board positions on non-profits for any reason other than that they truly believe in its mission are generally a PITA, IMO. They are in it for press/resume/kudos reasons, and tend to believe that as they aren't paid they don't need to follow through on what they said they would do, and their decisions and POVs are generally made with their best interests at heart rather than the those of the causes they are "helping".

Oh sorry, was I ranting? please to forgive....

/rant

sounds a lot like politicians...:rolleyes:

yup, amazing how many if those types eventually "regretfully" step down to devote their time to running for a political office......

I didn't say don't do it. I pretty much parroted exactly what it sounds like she's doing: Weighing, as in evaluating, asking questions. What's not to admire in volunteer work? And what did I say that sounded like I thought otherwise?

Read what I say, not what you think I think.:neutral: