Non-profit Board Responsibilities

I have a question can a acting board president fire an executive director without the executive board knowing that she did

Yes unfortunately a board president can (I have seen it done) but professionally they should tell the ED why they were fired. To not tell tell them would be sneaky and unjust and most importantly unfair to the E.D. This happened to a an organization I worked for and it was very upsetting for the E.D. and for the staff as well. There was a lot of hurt feelings and anger directed towards the board and that board president. This could have been handled much better and in a more positive way.

Estela, I have a dilemma and am seeking opinions. I'm consulting with a small start-up nonprofit, and we're developing its bylaws. I know that in many new nonprofits the founder serves as both the president of the board (a governance role) and the de facto executive director (a staff role). Most bylaws-- and good practice -- have provisions regarding conflicts of interest. A specific issue the founder has raised is how he can determine his initial salary and ensure the agreement of the full board (three total members so far, the minimum required in this state). As both the salaried administrator and board president, how can he avoid a conflict of interest while determining reasonable compensation? How can the bylaws reflect a policy that reconciles his dual roles?

I'm sure that other decisions will arise that pose a challenge for the founder in performing both oversight and operational roles. But despite the fact that such dual roles are quite common in new nonprofits, I'm surprised to find so little guidance published on this dilemma. Any suggestions are welcome. Thanks.

Paul

I do not thinkg the acting board pres can act independently like this.
In a well-managed nonprofit, the hiring and firing of the ED is decided by a Personnel Committee of the board. This committee is responsible for hiring: posting a job description for a new ED, interviewing and recommending (to the entire board) the best candidate with rationale. Annually, this committee works with the ED and the Board Chair to set up annual objectives for the ED, and supports the development of the Annual Appraisal and Management Plan for the ED. If there is a question about the ED's qualifications, it should be discussed first by the Personnel Committee and then by the entire board.

Paul,

Sorry for the delayed response.

First, the founder should choose one role or the other: the day-to-day running of the organization (ie, Executive Director), or the strategic guidance (Board President). As a donor, if I see both positions are occupied by the same person, I am going to have my doubts about that nonprofit.

Nonetheless, it is true that many small, fledgling nonprofits do have this dual role that goes against best practices. To determine a reasonable compensation, here is what the founder can do:
-- Follow the guidelines set forth at http://non-profit-governance.suite101.com/article.cfm/setting_nonprofit_pay
-- Give a voting proxy to one of the other board members.
-- Leave the meeting room when executive director compensation is being discussed.
-- Document what was done.

Good Day Paul
My Name is Onalenna Mokgara and Im working for Department of Social Development in Norther Cape, South Africa.

I need your advices on the following:
We are piloting a new Governing and Management Stracture for the NPO Funded by the Department as is as follows:
Board-Of-Directors
Chairperson
Deputy Chairperson
Secretary
Deputy Secretary
Treasurer
and
Organization Executive Committee is as follows:
Projects Coordinator/Centre Manager
Administrator
FinancialOfficer
Organizer
Supervisors of various projects in the Organizations.

I will like to if:
Is is a feasible Structures?
What is a relationship between this two structures?
The reason why there is no Chairperon, Secretary and Treasurer in the Organization Executive Committee was because we did not want to duplicate porfolios of one organization, e.g having two (2) chairpersons - one for the board and the otherr for Executive Committee, is it a reason enough?

What is the relationship between the Board-Of-Directors and Executive Committee?
What is the Powers of the Board of Director?
What is the Functions of the Board of Directors?
What is the Powers of the Executive Committee?
What is the Functions of the Executive Committee?
Where do we drwa the line between this two(2) bodies?
And How do we avoid two(2) Cnetres of Power?
What are the terms/peiod-of-office of this two bodies?

Read more: "Non-profit Board Responsibilities: Overview of Non-profit Board Governance | Suite101.com" - file:///C:/Documents%20and%20Settings/Keletso/Desktop/MCP/BoD/Non-profit%20 Board%20Responsibilities%20Overview%20of%20Non-profit%20Board%20Governance% 20%20Suite101_com.htm#ixzz0GhEMkuDl&A

Stela Kennan

Sorry for referring to you as Paul,its my first visit on your site and I was reading the comments and responses and I saw the name Paul and I thought it was You.

Ist Onalenna Mokgara,
Looking forward to your responses.

I work for a non profit agency that has an ED and a small staff of approximately 10 people. There is no middle management and there is gross mismanagement from the ED. Do staff members have the ability to go directly to the Board of Directors to air their complaints

This is outside the scopes of most bylaws, though it seems your organization should create grievance policies if they are not already in place. It is customary to address the situation with the person you have a problem with, if possible (perhaps the ED doesn't know there is an issue, and would reform his/her ways, if approached in a supportive, nonthreatening matter). If this is not the case, then you are correct in going up the chain of command. Since the Board is next in line up the chain, you should indeed go to the Board. Please bare a few things in mind before you go to the Board:
1-- Some board members will be "rubber stampers" who are not particularly active participants. While they might hear you out, do not expect much to change if you air your grievances to people like this.
2 -- Some board members have close connections to EDs. After all, the Board chose the ED to represent them in a day-to-day context. It is crucial to approach a board member who feels more loyalty to the organization and its mission/values than to the ED.
3 -- Please proceed in a levelheaded, professional manner. You want to improve the organization, not stage a coup (even if that is what ends up happening...)

What are the financial obligations of board members when a non profit closes because of lack of funding and there are outstanding debts including the IRS?

Can a board member profit from the nonprofit. For example, could a board member sell the use of a trademark and/or services to the nonprofit if the rest of the board approved it?

Founders of a non profit that are stepping away want to drain the money from the non profit as payment for no salary at the start of the business. Seems kinda slimey to me.

Question:
I currently work for a midsize nonprofit that has been in operation for close to 15 years. I was interviewed for the Executive Director position while employed as a counselor. I was interviewed by the Board President and another board member. I was turned down for the position to discover that the Board President who interviewed me was appointed to the position, Executive Director. the explanation I was given is that person had more experience. However, that person has zero nonprofit experience other than serving on the board of directors.
Isn't this an ethical dilemma? or is there some legal action one could take?

To Sept. 30:

I am sorry this happened to you. It certainly looks bad when the person who interviewed you takes the position. You say you are a counselor, but you did not say what the Board member does. Nonprofit experience is not the only relevant experience necessary to be an Exec Dir. Other pertinent skills might include, but are not limited to budgets, HR issues, supervising, report writing, fundraising, public relations, etc. So it might very well be that the other person has more pertinent experience than you.

Is this an ethical dilemma? At the very least it was improperly managed, and it has hurt staff moral. At worst, the board hired someone unqualified. Do you have legal recourse? Probably not. Legally, people don't need a good reason to hire someone, they just need a reason that is not protected through the anti-discrimination laws.

Good luck with everything...

Can a city government contract with a non profit organization and then require that the majority of the board members are city employees? Isn't this a conflict of interest?

Dear Oct. 12,
Without knowing the exact circumstances, yes, that sounds very sketchy indeed. If a city is funding an organization and the city is providing oversight, then that sounds more like a branch of the city than an independent non-profit. If the nonprofit's area is in augmenting the city, then it is proper (and probably a good idea) to have a non-voting member of the board be a city representantive, to help ensure that the constituent's needs are being met, and to serve as a liaison with city officials -- but that is a far cry from what you are describing. Good luck with your situation.

We have an Executive Director that we believe is stealing money from our organization and we have documentation to support this along with our Director being spiteful and unusually non caring for the Employees. Also she is constantly trying to fire someone to create drama plus many other bad faults. We went to the board memebers with this documentation and letters from more than half the employees to file complaints. they kept telling us something would be done. However we found out the president resigned and one other member. They tell us they cannot do anything unless they have all 5 members agreeing. The employees are so upset that this continues they are all wanting to walk. Is there anything that can be done with the members we have left. Oh and we are contracted through the state also. Please help.

I have two questions:
1. If the bylaws of a 501(c)(3) do not specifically state the Board has the right or responsibility to perform a performance evaluations on staff that is subordinate to the Executive Director, can they legally do that?
2. Also the bylaws do not state a grievance policy or procedure if the grievance is being filed against a board member or part of the whole board. What would be your advice in that instance?
Context:
My executive board, performed an unprecedented "job Evaluation" on me without my immediate supervisor present, our Executive Director. They did this with me only having never done this before with any employee nor did they do it with the other two employees I work with under ouyr ED. The year previously (was there only two years regular part-time.) my ED performed the evaluation and it was above average and I got a raise and increased hours.
This 3-1 meeting with the Executive Board was in my estimation, an ambush that was disrespectful, unprofessional and intimidating. A week later I submitted a respectful, unemotional grievance/complaint stating my position on all the issues I felt needed to be addressed and requested an apology and clarification on policies that were raised and that my supervisor do evals from now on. A week later without comment from any of them, they made my Executive Director to fire me, I believe against her wishes.
We live in Idaho which is a Right-to-Work state where there are really not employee protections. You can be fired without cause or notice.
What I am wondering is is this out of line with federal requirements for rights and responsibilities of a non-profit. Since I am the only technical person at an operation that;s mission is technically based, have they acted in the best interest of the organization?
I am seeking advice from a labor attorney but I am not sure about the non-profit angle. I have looked at Idaho code and I do not see anything that relates to non-profits and employees.
Thanks so much for your help and the information you have provided here.
Technobia

Dear Oct. 17,

There are several troubling issues here -- about the Executive Director's apparent misuse of taxpayer money, about the board inaction (and why two board members resigned?) It sounds like you need a lawyer. Since I am neither a lawyer, nor have any knowledge about the law of Illinois, I would hate to advice you about anything one way or another. I am sorry I could not be of more help, but I wish you luck going forward. One thing I would strongly advice is don't do nothing -- action is clearly needed!

Dear Technobia,

I am sorry about what happened to you. I am sure I am missing a lot of details here, but, while I am glad you have contacted a labor lawyer, I doubt you have any legal recourse.

"Since I am the only technical person at an operation that;s mission is technically based, have they acted in the best interest of the organization?"

Possibly. If you, for whatever reason, where not the right person for the job, then freeing that position to find someone better was in the organization's best interest. Even if not, this is not something that would immediately jeopardize the organization's nonprofit standing. If they cannot fill your position, if they cannot meet their objectives, they may loose funding, etc. -- but those are ifs that cannot be determined just by the unfortunate act of them having fired you.

If I were you, I would approach the ED as kindly as possible and ask her what the possibility of using her as a reference during your job search would be. If your reading of the situation is right, she should say something along the lines that she think you're a good performer who got a raw deal, and she'd be happy to help. If she hedges, then something else is going on -- possibly she fears going against the Board's wishes, or, faced with an uncomfortable position, she might have asked the Board to interfere and do your eval in the first place.

I have witnessed nonprofit staff and board members turn against each other with no good cause. If this is truly the case here, I hope you can lick your wounds and move on -- that is probably not the type of organization you would want to be affiliated with anyway.

Help
I work for a non-profit organization and recently we had four managers resign.The ED I do not really know because I answer to my manager . I know and respect the ethic of these managers in a professial way. We have over 80 volenteers and as a result of the resignation we had a walk out requesting that the board of directors replace the ED.Well this did not happen and the Board came in to fix a problem that was not broken. Why didn't the board make the ED resign ? Can the Board go into a work place that they have no idea how it works or runs and change things base on false information ? What steps can the remaining staff take to insure that the mission of the non-profit organization is met?

Wow! Four managers resigning and a walk-out does not sound good. It seems to me there are two main possibilities:
-- The managers, good as they may seem, did something bad and were asked by the ED and Board to resign. Not knowing the ED or why the managers resigned, everyone gets in an uproar, but the Board rightly sticks to their guns. Maybe the tinkering you thought was unnecessary really wasn't.
-- The ED is terrible, the managers resigned as a testament to his/her incompetence, and the Board -- perhaps out of some sense of loyalty to the ED, who is, after all, the person they know best in the organization, or perhaps out of general ineptitude -- lets the ED stay.

How do you know which is which? I would approach the ED and a couple of Board members and ask them what their vision for the organization's future is and what their plans are for getting things done. If they're not talking the talk, you know something is up. If they ARE talking the talk, make sure they are also acting on their words.

If it seems that the Board and ED are good enough, then the next step is to get together with the remaining staff and regroup, focusing the mission of the organization and the actions each individual can take in realizing that mission. If things stink to high heaven, then the next step might be to meet with the staff and the managers who resigned and discussing what options exist. While the Board and ED MAY have acted unwisely, it doesn't sound like they have done anything illegal -- but maybe the managers know otherwise. Perhaps legal action can be pursued. Or perhaps the group can start a new nonprofit.

At any rate, this sounds like a difficult situation with emotions running high. Before you take any action, the first step is to get a better understanding of what is really going on. Only then can you figure out the best way to fulfill the organization's mission. Good luck!

Hello, Estela.
I just began serving on the Board of Trustees at my daughter's independent school and am also serving as the chair of the Development Committee. From what I can tell thus far, the Board does not have any formal procedures it follows and there are certainly no procedures set forth with regard to the subcommittees. I assumed the role of Development Committee chair from the chair of the Board; however, the Board chair has recently made unilateral decisions regarding an event she has decided to throw together that are directly contrary to policy "adopted" by the Dev Comm under her leadership (she was simultaneously chair of the Board). When concerns were expressed regarding certain aspects of the event, she dismissed them and makes statements contrary to the policies the Dev Comm determined were in the best interest of the school. The policies adopted by the Dev Comm were not formally set or adopted, no vote was taken but agreement was reached, there were no minutes taken, and now she is conveniently disregarding multiple conversations and discussions we had as a committee.
How would you recommend that I address and handle this issue and the problems in general. She is trying to micromanage not only the Dev Comm, but the Head of School and newly hired Advancement Director, as well, by dictating how things are run on a day-to-day basis.
Help!!!
Thank you!

Dear Brooke,
I am sorry you are in such a difficult position. Dysfunctional boards are all too common. I would start by allying yourself with some like-minded people and instituting some structure into the board. Please check your state laws, but I suspect you will find that for your board to be a legally recognized structure, it NEEDS bylaws -- so start there. In the bylaws, include the need to take minutes, as well as the function of specific board officers and standing subcommittees, and how many votes are needed to act on something (ie, the board president cannot unilaterally make decisions). Then in your own committee, flesh out the responsibilities by creating a policy document, and appointing a subcommittee secretary. These processes can take a long time-- extra meetings might be required or an ad hoc committee created to make the bylaws.

You have to try to make the chair an ally in this effort, or at least not see you as a threat. Remember she is trying to do what she thinks is best for the school, so when you propose changes, you need to frame it not in the sense of "we need to do things differently than YOU've been doing", but to stress the need for compliance with state law for the board to have legitimacy and authority. There are also limits to the types of fundraising that nonprofits can do -- so if her ideas aren't in compliance, that's a way of stopping it.

Remember, change takes time... and a lot of dedication. I wish you success in this.

I am a volunteer represenative appointed by a small city to serve on the Board of Trustees of a library. The library is funded by 4 other small towns,each with appointed Trustees of a total of 10 Trustees. The library is a non-profit organization with bylaws. In a recent vote, I voted against a contract that "my" city wrote for the library. "My" city is now trying to revoke my appointment saying I am "not representing what the city's positions are and I need to express the wishes of the commissioners".
I argue that I have a fiduciary responsibility to the library.
Is this politics at its best? Do I have an argument.

Wow. Tough position. I think you did the (morally) right thing if you did what you think is right for the library. However, without knowing more of how the Trustee-ship is set up, I cannot say for sure whether the city may be (legally) right. I know you are appointed by the city, but are you an "actor" for the city? Or are you an independent actor with, as you say, a fiduciary responsibility to the library?

If you serve at the discretion of the city, it might be too late for you to do anything, but might I suggest that in the future Trustees from a particular city not be allowed to vote on contracts from the city due to conflict of interest? It would prevent things like this from happening, as well as prevent the city from taking advantage of the library.

I have a question, in a non profit agency that recieves state, federal, local funds and donations, is it appropriate for the pres of the board to be the sister of the Executive Director, further is it appropriate for another board member who is the daughter of the ED to be involved in the day to day operations of the agency? Who can get to look into this in Kansas?

Hmm... all those family connection do sound potentially worrisome. On the other hand, a nonprofit is a business, and many businesses have family connections for various reasons. Kansas does require that nonprofits file an annual report that lists all the board members, but not employees, and it does not require that the organization disclose family connection. In the original 501(c)3 application, the IRS does take that into consideration, however. Many grant applications also require a list of board members and key staff (though, if they all have different last names, again the family connection would be missed). If you believe something unethical is going on, you should mention it to the rest of the board and file a complaint with the state. But it might just be that caring runs in the family.

Estela,
Our company is closing business to move to another country and we have had a NPO for nearly 20 years. We have fund raisers internally with 50% of contributions going to help the United Way while the other 50% remains for the employees to help with financial assistance. How do we dissolve our NPO legally and what happens to the money that was donated by the employees?

I have a question; my executive director is a control freak and gets involved in everything in the agency. He is behind 3 months on his grant reports, audits, and budgets. He overrides board decisions and takes actions without board knowledge or approval. The agency is going over budget and we are in debt. The ED creates a climate of secrecy where he has all the information. Most of the board members are average citizens with very little education. We have a structure that allows for representation from various groups so each group of the constituents pick and select their own board member. Close to half the board members have good relation with the ED and follow him with blind faith, a few others are not educated and take the ED's word at face value. What's in the bi-laws and what is practice are not the same. The ED is used to having things his way for 20+ years. The sense from the community/constituents is one of mistrust and no faith in the agency. There is a turnover in the board members this coming year and I am one of the new board members. There is evidence of the ED misusing of funds and misleading the board. There is great pressure from the community for the new board to let the ED go.
Is the process of letting an ED go an easy one?
If the board decides to let the ED go, what does the process involved? What can we expect? Does the board need documented negligence, incompetence & failure in order to let the ED go?

Are there policies for how consumers can contact the board of directors and how much contact information they can have about the board of directors? Thank you

Dear Dec. 18,

You should consult an accountant and/or lawyer to see what your options are. Is your NPO a 501(c)3?

Dear Dec. 18,

You should consult an accountant and/or lawyer to see what your options are. Is your NPO a 501(c)3?

Dear Dec 22:

Q. Is the process of letting an ED go an easy one?
A. It depends on your bylaws and your state. If your bylaws don't cover letting the ED go, and your state is an at-will employer, then it is pretty straightforward: get the board to vote on it. Even if you live in an at-will state, it might be beneficial to list the grievances against the ED. That might help forestall problems later on.

Q - If the board decides to let the ED go, what does the process involved?
A - Again, it depends on your state laws and bylaws. However, the nicest, easiest way to go about it is to have a vote, and then have the board president and perhaps a sympathetic board member talk privately with the ED and ask for the ED's resignation. If the ED is told (as politely as possible) resign or we'll fire you, he will probably choose to resign.

Q - What can we expect?
A - Expect the worst (threats, accusations, divisiveness among the board and employees, and more fall out) but hope for the best (perhaps the ED was tired of working there and was looking forward to retirement, and will leave quietly...)

Q - Does the board need documented negligence, incompetence & failure in order to let the ED go?
A - Again, it depends on your state, but you might want to do it anyway, to cover your back, and to give the ED a compelling reason to resign rather than be fired. Furthermore, since you said many board members support the ED, documenting his wrongdoings might make it easier to pass a vote for his removal. You should see if you can talk to any HR people about the best way to go about this. I you suspect the the ED of criminal behavior (rather than just flagrant incompetence), you should talk to a lawyer before you decide what action to take or whether offering the ED a chance to resign should even be an option.

Hope this helps. I'm sorry you and your board are in this situation, but it is good that you are taking action.

Hello - i am new to a non profit board of directors and in the few months I have been there is resistance by the president of the board as well as secretary-treasurer to have a full board as the by-laws state. A big recent problem, the president and the secretary-treasurer are dispersing funds not approved by the board. It is unfortunately obvious they feel they are above the by-laws and do as they wish even when the board votes policies thaey ignore them and proceed as they wish. Do we have any legal recourse or should we just give up like the past 6 board members that have resigned stating we are dealing with a 'control freak'?

Hi,

I do volunteer work on a national in the health care industry. As I was a new member last year, and had no history with the committee members involved, I was asked to evaluate the functioning of one of the committees that had become quite separate from the board. I wrote a report and suggested several changes to the committee, particularly the presentation of a reference list of materials that we sent to the health care public that we serve. In making these suggestions, I have made myself quite unpopular, which has resulted in my exclusion from any committee membership, and non-inclusion of board information. It seems that much of the work of the board is now done by the executive as many of the board members are not active in board activities. My questions are as follows:

Do I have any remedies to ensure that I be sent relevant board materials?

Can I insist on knowing what the executive decisions are and how they arrived at them, and can I do anything about a decision that I disagree with?

Very informative and helpful!

I am sorry about your predicament. They asked you to step on a landmine, and you went for it. If you want to have a say in decision making, you need to work on building ties within the group.

It wasn't clear from your message: are you a board member? If so, you should be able to see all the material that other board members have access to; if not, then that's a different story. If you're a board member, the bylaws might have something saying how you can access board info. If not, check with the laws where your organization is incorporated. Ask nicely first -- you just want to be appraised of the situation. You might want to back-peddle a bit on your report, too: say that while you stand by your recommendations (assuming that is true), you may have presented them a bit precipitously because you did not understand the environment you were in.

As for decisions by the executive committee: if they are official board business (which it seems like they are), then there should be meeting minutes where the decisions made are enumerated. You may not necessarily have access to HOW the decisions were made, though. As for contesting them: what is the scope of the executive committee? (Hopefully, this has been spelled out in the bylaws or some minute meetings, but possibly not). If they make decisions that are out of their scope, then you can contest them. Otherwise, the best you can probably do is ask nicely that an issue be reopened, and present information to show that the decision should be reconsidered. Good luck...

I do volunteer work on a national in the health care industry. As I was a new member last year, and had no history with the committee members involved, I was asked to evaluate the functioning of one of the committees that had become quite separate from the board. I wrote a report and suggested several changes to the committee, particularly the presentation of a reference list of materials that we sent to the health care public that we serve. In making these suggestions, I have made myself quite unpopular, which has resulted in my exclusion from any committee membership, and non-inclusion of board information. It seems that much of the work of the board is now done by the executive as many of the board members are not active in board activities. My questions are as follows:

Do I have any remedies to ensure that I be sent relevant board materials?

Can I insist on knowing what the executive decisions are and how they arrived at them, and can I do anything about a decision that I disagree with?

Hello
I am new on a non-profit. There is one board member who is terribly rude to everyone and seems to have a personal agenda. He makes disrespectful personal remarks, yells and screams when someone disagrees with him and just generally causes havoc. I have brought his behavior up with the executives and i was told "oh, that's just how he is, just ignore him". Ah yeah, NO, I dont have to take that kind of nonsense at work, home or in my personally life, why would I take it there?! The problem is no one has the guts to tell him to knock it off. What other options do I have to to try to get some extra help with this and see if we can get things under control again?
thanks
K

Can the ED be on the Board as a member? Our small NPO Child Care Center has problems keeping members when children move on. This would help meet our minimum quorum numbers.

Thank you from Santa Cruz

The ED should not be a voting member of the board. Instead, look to see if you can lower your quorum or recruit more widely from your community so you do not have as many board members who are likely to leave.

This is an informative article that gives an overview of the role and responsibilities of a board of directors for a nonprofit organization.

I am the process of forming the Board of Director for a nonprofit organization I recently founded.
Because the organization is my dream, I feel that I should serve as the Chair of the Board.
Based on the information I read on this site, the Board of Directors, should avoid day to day management, of the organization.
This is my dilemna .....I currently enjoy doing "everything" for the organization and it sounds, based on your defination, that my role should be that of the Executive Director. Is there a way for me to hold both roles.
Chair and Executive Director?
It is my dream to one day resign from my "day job" and dedicate all of my time to making this foundation a huge success and receiving a salary....is this possible, as Chair of the Board?

Does the board have right not to publish/give meeting minutes to a general member?

Over the years, people have contacted me to ask detailed questions. I am sorry to say that I don't have the time (and in most cases, the expertise!) to answer your questions. Please try Idealist.org Also, most states and some cities have non-profits that exist solely to help other nonprofits. They will know the laws of your state much better than I ever could. Thank you and good luck!