Q: I was just asked to serve on the board of
a local charity that I have been supporting for years because of its great
services. What should I know?
on the board of a charitable organization enables the staffs, volunteers and
charity donors across the state to enhance the quality of life in all our
communities. The job is demanding, but also rewarding, and is a vital function.
Becoming a board member for a charitable
organization means more than merely accepting an honorary title or helping a
charity that contributes positively to the lives of people in the community. When
you become board member, you will be taking on an important job with specific
Q: What specific legal responsibilities
would I have?
A: As a
board member, you would have four basic obligations to the charity you serve:
duty of care, duty of loyalty, duty of compliance, and duty to maintain
accounts and records. Observing these duties requires you to pay attention, ask
questions and take your role seriously. Your top priority as a board member is to
keep faith with donors and stakeholders, ensuring that the organization is able
to honor and perform its mission now and in the future.
Board members are the first line of
defense for ensuring the integrity of charitable organizations and the entire
philanthropic sector. They are legally bound to make certain all designated
resources are used effectively and efficiently for the implementation of an
organization’s mission and not for anyone’s personal benefit. Only an active
board that routinely develops and evaluates programs and policies having to do
with day-to-day operations in the organization can successfully meet that
Q: What questions should I ask before
agreeing to serve on a board?
should ask how the board operates, whether job descriptions are available and
what you will be expected to do. Examine past board meeting minutes, financial
reports, by-laws and policies. Find out whether the charity carries liability
insurance for its directors and board members. Ask to see the organization’s annual
filings with the IRS and the Ohio Attorney General’s Office. The contents of
these documents—or the lack of documentation—could signal potential problems or
indicate how much work must be undertaken to properly establish and operate a
governance structure for the organization.
Q: Where can I get help to meet my legal
responsibilities as a board member?
Ohio Attorney General’s Office regulates charitable organizations and assists
board members with meeting their responsibilities. Board governance training
and related materials are among the resources available at www.OhioAttorneyGeneral.gov to
help new leaders of charities. Also, questions about training and resources for
charitable board service and charitable fundraising can be emailed to CharitableLaw@OhioAttorneyGeneral.gov.
Publicized incidents of theft,
embezzlement and other fraudulent activities have damaged the reputations—sometimes
permanently—of a number of charitable organizations. Many such incidents could
have been avoided had board members put in place policies and processes that
uncovered wrongdoing more quickly or prevented it altogether. Donors and
stakeholders deserve the assurance that gifts and resources are properly
protected and utilized.
Q: Does the Ohio Attorney General’s Office
investigate charitable organizations when wrongdoing is suspected?
A: Yes. The Ohio Attorney General’s Charitable Law Section
regularly receives complaints about lax controls and misuse of funds at
charities. It launches investigations when problems are suspected or discovered,
and the office has broad authority to take action to protect or recover
charitable assets. Board members who scheme to defraud donors or charities may
face civil as well as criminal actions to recover lost resources. Complaints
can be filed online at www.OhioAttorneyGeneral.gov,
mailed to the Charitable Law Section at 150 E. Gay St., Columbus, OH
43215, or people can call 1-800-282-0515 to report any suspicious charities or
This “Law You Can Use” column was
provided by the Ohio State Bar Association. It was prepared by Beth Short, who
is part of the Ohio Attorney General’s Charitable Law Section. Articles
appearing in this column are intended to provide broad, general information
about the law. Before applying this information to a specific legal problem,
readers are urged to seek advice from an attorney.
Labels: charitable organizations, charity