MANAGING RISK FOR YOUR NONPROFIT
Every nonprofit board member wants to avoid getting investigated by state regulators. Serving as a board member with an organization requires a high level of commitment to the mission. A board member also assumes a set of responsibilities and duties that are defined by law. To avoid problems, it is important for leaders to actively seek to understand the laws governing nonprofits. The good news? There are many great resources available to help navigate the legal risks nonprofits and their board members face to include BoardSource, the National Association of Attorneys General (NAAG) and the National Association of State Charity Officials (NASCO).
HOW TO AVOID GETTING INVESTIGATED BY STATE REGULATORS
Kate von Richthofen, Director of Special Projects & Initiates for BoardSource, authored an article titled “TOP 10 Ways to Get Investigated by a State Regulator”. Of course, her real emphasis is on how to AVOID getting investigated by state regulators! Read the entire article at: https://boardsource.org/wp-content/uploads/2017/06/10-Ways-Investigated-State-Regulator.pdf.
Here is a recap of the top 10 legal risks with special emphasison #8, because state charity registration is close to my heart!
- Governance – board members and senior leadership failing to be sufficiently active and informed.
- Failure to safeguard assets.
- Conflict of interest – deal with them.
- Excessive compensation and/or executive director with too much power.
- Clear failure to follow the mission of the nonprofit.
- Membership organization board conflict as related to the duty of loyalty.
- Misusing endowment or restricted assets.
- Fundraising issues, to include understanding state charity registration laws and requirements for all 50 states and DC.
- Public accountability and transparency.
- Ignoring the attorney general’s office
Please don’t ignore any of these TOP 10. If you would like to discuss state charitable solicitation registration requirements as related to your nonprofit organization for any or all of the 50 states (plus DC), email firstname.lastname@example.org to schedule call.