Need Someone who knows Business Law

Clodfobble · 03-12-2010, 09:25 AM

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?

monster · 03-12-2010, 09:39 AM

Are you being asked to sign anything?

monster · 03-12-2010, 09:41 AM

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

glatt · 03-12-2010, 09:46 AM

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.

monster · 03-12-2010, 10:04 AM

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.

Cloud · 03-12-2010, 10:22 AM

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.

Pie · 03-12-2010, 10:22 AM

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.

monster · 03-12-2010, 12:22 PM

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.

Gravdigr · 03-13-2010, 04:12 PM

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

Pie · 03-13-2010, 05:49 PM

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.

monster · 03-13-2010, 06:13 PM

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

classicman · 03-13-2010, 08:57 PM

Quote:

Originally Posted by monster

their decisions and POVs are generally made with their best interests at heart rather than the those of the causes they are "helping".

sounds a lot like politicians...

monster · 03-13-2010, 09:57 PM

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

Gravdigr · 03-14-2010, 12:15 AM

Quote:

Originally Posted by Pie

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.

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.

03-12-2010, 09:25 AM	#1
Clodfobble UNDER CONDITIONAL MITIGATION Join Date: Mar 2004 Location: Austin, TX Posts: 20,012	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? __________________ My book My other book My spirit animal

03-12-2010, 09:39 AM	#2
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	Are you being asked to sign anything? __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

03-12-2010, 09:41 AM	#3
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	Yes, if it becomes paid, you may well have some liability, but there is insurance aimed specifically at non profit boards to cover this. __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

03-12-2010, 10:04 AM	#5
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	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. __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

03-12-2010, 10:22 AM	#6
Cloud ... Join Date: Feb 2007 Posts: 8,360	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. __________________ "Guard your honor. Let your reputation fall where it will. And outlive the bastards!"

03-12-2010, 09:46 AM	#4
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	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.

03-12-2010, 10:22 AM	#7
Pie Gone and done Join Date: Sep 2001 Posts: 4,808	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. __________________ per·son \ˈpər-sən\ (noun) - an ephemeral collection of small, irrational decisions The fun thing about evolution (and science in general) is that it happens whether you believe in it or not.

03-12-2010, 12:22 PM	#8
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	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. __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

03-13-2010, 04:12 PM	#9
Gravdigr The Un-Tuckian Join Date: Apr 2007 Location: South Central...KY that is Posts: 39,517	I think I'd have to weigh whether I'm committed to the cause enough to take the chance. Slim as it may be. __________________ These statements have not been evaluated by the FDA, EPA, FBI, DEA, CDC, or FDIC. These statements are not intended to diagnose, cause, treat, cure, or prevent any disease. If you feel you have been harmed/offended by, or, disagree with any of the above statements or images, please feel free to fuck right off. Last edited by Gravdigr; 03-13-2010 at 04:13 PM. Reason: But what do I know, I'm retarded.

03-13-2010, 05:49 PM	#10
Pie Gone and done Join Date: Sep 2001 Posts: 4,808	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. __________________ per·son \ˈpər-sən\ (noun) - an ephemeral collection of small, irrational decisions The fun thing about evolution (and science in general) is that it happens whether you believe in it or not.

03-13-2010, 06:13 PM	#11
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	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 __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

03-13-2010, 09:57 PM	#13
monster I hear them call the tide Join Date: Dec 2005 Location: Perpetual Chaos Posts: 30,852	yup, amazing how many if those types eventually "regretfully" step down to devote their time to running for a political office...... __________________ The most difficult thing is the decision to act, the rest is merely tenacity Amelia Earhart

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