Running or starting a nonprofit?

Helpful Legal Tips for Nonprofit Directors and Executive Board Members

August 17 is National Nonprofit Day. Providing community service through a nonprofit organization is one of the most worthwhile endeavors one can undertake—both intrinsically and extrinsically. Have you been invited to join the board of directors of a nonprofit organization? Or maybe you already serve on one and want to make sure you’re meeting your obligations? Either way, here are some tips.

Review the organization’s important documents:

The articles of incorporation is the organization’s primary governing document. They’re essentially the organization’s contract with the public and are filed with the Department of State. They set out the organization’s broad purpose.
The bylaws are the organization’s secondary governing document, in that they must be consistent with the articles of incorporation. These are effectively the organization’s contract with its members, are not filed with the Department of State, and establish how the organization is run to achieve the purpose established in the articles of incorporation.
Minutes should show policies and activities that are consistent with the bylaws and articles of incorporation.
Financial reports should reflect activities that are consistent with established policies, bylaws, and articles of incorporation.
An IRS determination letter will demonstrate that the organization has been ruled by the IRS to serve a “charitable purpose” under Section 501(c)(3) of the Internal Revenue Code and, therefore, may collect tax-deductible donations.

Know your duties as a director. A director has fiduciary duties to the organization, broadly divided into a duty of care, a duty of loyalty, and a duty of obedience.

Duty of care requires you to act in good faith, with the care of an ordinarily prudent person in similar circumstances. As part of this, you must attend meetings, read materials, and exercise independent judgment.
Duty of loyalty requires you to act in the organization’s best interest, not that of another individual or entity. As part of this, you must keep information confidential and not use it for personal gain. If you have a conflict of interest with an issue that comes before you, you must disclose it and abstain from discussing that issue further or voting on it.
Duty of obedience requires you to fulfill the organization’s charitable mission in compliance with law and to assure it acts in accordance with its policies.

Know your duties as an executive. If you do or expect to have a special position on the board, such as president, vice president, treasurer, secretary, or committee chair, review the bylaws to determine some important requirements:

What qualifications does the position require? Must you be a member? Must you already be a director? Must you have some other qualification?
How is the position filled? Most positions are elected, but by whom? Fellow directors? General membership? Some positions are appointed by the board or a portion of it. Some positions may be elected in some circumstances but appointed in others, such as an early vacancy. Still others may be vetted by a nominating committee before being presented to a larger body for approval.
What does the position require? These should be outlined in the organization’s bylaws, but it’s possible that there’s a disconnect between how things should be and how they are. If you see this disconnect, work within the confines of the organization to fix it, either by changing how things are done or by amending the bylaws to reflect reality.
What about meetings? The bylaws should also establish, to varying degrees of rigidness, meetings. Ordinarily, bylaws will empower the executive board, or maybe the president, or maybe a certain percentage of members, to establish a meeting, though there may be a minimum requirement of annual meetings. Meetings could even be among different groups: the executive board, the entire board of directors, the entire membership. Check quorum rules to see how many of what population are necessary to be present to conduct business. Remember that a “majority” is “more than half,” not “half,” so that a majority of 8 is 5, not 4.
And then there are employees. Remember that nonprofit means no owners receiving dividends, not that the organization can’t make money and pay staff with the raised funds. Sure, some organizations are volunteer-led, as in they have no paid employees and are managed by volunteer leadership. But some hire an employee, such as an executive director or chief executive officer, to manage the organization’s daily activities consistent with guidance from the board, which sets policy goals for the organization to achieve. If there is a CEO or ED, it’s important to remember that individual serves as the intermediary between the board and other staff. A director should not directly interfere with staff in this structure. Under no structure may one director act alone without express authority from the board.

Whether you operate a nonprofit organization that needs legal advice or you need help to start one, PJR Law can provide the guidance you require.

Contact Shawn Westhafer at 717-591-1755 or

send an email: swesthafer@pjrlaw.com with questions or to discuss your situation further.

How Volunteering With a Nonprofit Can Give Your Professional Life a Boost

Volunteering is a wonderful way to give back to your community, but did you know that it can also boost your professional life? If you're a career-minded professional, you may be surprised to learn how volunteering with a nonprofit organization can help you develop new skills, build your network, and ultimately enhance your career prospects.

Develop New Skills:

When you volunteer with a nonprofit organization, you're likely to take on tasks and responsibilities that you wouldn't have in your day job. For example, you may be asked to organize a fundraising event or manage a team of volunteers. These experiences can help you develop new skills that you may not have had the opportunity to develop otherwise. This not only benefits the nonprofit organization but can also beef up your resume and make you a more attractive candidate for future job opportunities.

Expand Your Network:

Volunteering also provides you with the opportunity to meet new people and expand your professional network. You will work alongside other volunteers, staff members, and potentially network with donors and supporters. This can lead to new connections and potentially new job opportunities. It's important to note that networking is not just about finding a job but having a diverse network with people from different industries can help you grow your skills and perspective.

Gain Experience in a New Field:

Volunteering with a nonprofit organization can be an excellent way to gain experience in a new field. For example, if you work in marketing, volunteering with an environmental nonprofit organization could help you gain valuable experience in cause marketing and sustainability. Having diverse experience from volunteering could make you a more attractive candidate for potential employers looking for someone with experience outside their immediate field.

Strengthen Your Resume and Boost Your Professional Reputation:

Volunteering can also have a positive impact on your professional reputation. You can add these experiences to your resume, demonstrating your willingness to contribute to society outside of the normal work environment. In addition, potential employers and business contacts may view you more positively for giving back and publically contributing to the community.

Further Your Personal and Professional Growth:

Volunteering with a nonprofit organization can offer personal growth as well as professional growth. By giving back, you can gain a greater sense of purpose and satisfaction, and learn more about the problems facing your community. These experiences can provide you with a broader perspective, help you to foster humility and empathy that is essential to professional growth.

Volunteering provides an excellent way to support your community, but it can also help boost your professional life. It can help you develop new skills, expand your network, gain experience in a new field, strengthen your resume, and further your personal and professional growth. Whether you're a young professional just starting in your career or a seasoned executive looking to expand your skillset, volunteering with a nonprofit organization can be a rewarding and fulfilling experience. So why not give it a try? Find a nonprofit organization that aligns with your passion, and reach out to them today to see how you can get involved.

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