What legal ramifications of serving as a leader on the board of a homeschool group have for an individual?
All leaders, officers or directors of a nonprofit organization have some legal responsibilities. Each board member has a fiduciary (i.e. legal) duty of care and loyalty to manage the organization and its funds within the purpose/mission of the organization and not for private gain or benefit. The board’s job is to govern the organization, be responsible for the management of funds, and be responsible for its programs. Those are the “legal ramifications” of leadership.
Specifically, the duty of care includes:
- Be aware of the nonprofit’s mission, plans and policies
- Be sure that all activities are in accordance with the mission, plans and policies
- Fully participate in Board meetings, deliberations and decisions.
- Read, evaluate and ensure the accuracy of all reports, including minutes and financial statements.
- Ensure the organization has sufficient people, funding and other assets to meet its purpose.
The duty of loyalty includes clearly making a reasonable and good-faith effort, when acting as a Board member, to:
- Always be thinking about, and focusing on, the priorities of the nonprofit, and not that of yourself or another organization.
- Share ideas, opinions and advice to forward the progress of the nonprofit.
- Represent the nonprofit in a favorable light.
HomeschoolCPA.com teamed up with Becky Abrams of HomeschoolLeaders.com to offer a Board Training video set. We explain these fiduciary duties and lots more about what boards do and how they are selected.
Most of these fiduciary (legal) responsibilities are not too heavy for any loyal board member. I think they are very reasonable. It might be a good idea to share them with new and old board members and watch the Board Training video together.
So next time someone asks, “What are my responsibilities as a board member?” or “What are the legal ramifications of putting my name on an IRS form?” you have an answer to give.
Carol Topp, CPA
Helping Homeschool Leaders