1. Rosenberg Martin Greenberg, LLP
Top Ten Things Every Nonprofit Organization Director Should Know About: Fiduciary Duties, Board Responsibilities and Good Governance
Seth Groman
Rosenberg Martin Greenberg, LLP

2. 10. Fiduciary duties of directors serving on boards of nonprofit organizations:
General:
Act in good faith
Act in manner reasonably believed to be in the organization’s best interest
Specific:
Care
Loyalty
Obedience

3. 9. The Duty of Care Prudent person standard
What would such person do in similar circumstances?
How to comply?
Do the “work”
Participation
Informed and reasoned decisions

4. 8. How to fulfill your “Duty of Care” as a nonprofit organization director – some practical considerations
Be prepared
Give the necessary time
Consider relevant information
Consider short, mid and long-term impacts
Set sound policies
Be creative and open minded
Make time for periodic compliance reviews
Have an “organization and mission first” mindset

5. 7. The Duty of Loyalty Undivided allegiance to the organization
Confidentiality

6. 6. The Duty of Obedience Adherence to the organization’s mission
Adherence to applicable laws

7. 5. Understand your organization’s legal and regulatory landscape
State laws (such as):
Corporate governance
Charitable solicitation registration and fundraising
Charitable assets protection
Licensing of applicable operations and activities
Tax (and tax-exemption) laws
Federal laws (such as):
Federal tax statutes, regulations and forms (IRC 501(c)(3), Form 990 etc.)
Sarbanes Oxley Act (Whistleblower Protections and Document Retention)

8. 4. IRS Form 990 – Fun with Taxes!
“New” Form 990 (rev. 2008) – What does a director need to know?
It’s a “public document”
Financial, operational, & legal information required
Mission and activities descriptions – an opportunity!
Governance and policy questions
Compensation questions
Related parties and associated transactions
Lobbying
Unrelated business income
Schedule O – an opportunity!
What is the Board’s role and responsibility regarding the Form 990?

9. 3. Am I at risk, personally, if something goes wrong?
Liability limitations
Indemnification
D&O Insurance

10. 2. Protection of Charitable Assets Acts
Relates to “charitable assets” held for a “charitable purpose”
Problem to be addressed is the misapplication, diversion or waste of a “charitable asset”
Breach of fiduciary duty can be a cause
AG has investigatory powers
Subpoena power
AG has enforcement powers:
Restraining orders
Restitution
Transfers of assets to another charitable organization

11. 1. Before you say “yes” (or even if you already have) …
Review:
Charter, Bylaws, and Policies
Form 990s and Financial Statements
Insurance
Organization's website
Check out the organization on GuideStar and Google
“Interview” the CEO/ED and board members
Get familiar with organization's “legal landscape”
Do you have adequate time and resources to commit?

12. Questions? Seth Groman Rosenberg Martin Greenberg, LLP
25 South Charles Street, 21st Floor
Baltimore, Maryland 21201
Phone: (410)

13. Thank you! Seth Groman Rosenberg Martin Greenberg, LLP
25 South Charles Street, 21st Floor
Baltimore, Maryland 21201
Phone: (410)