Page 6 - Ohio Vol 5 No 2
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Board Members for Charities Should Know Legal Responsibilities
BY BETH SHORT
Serving on the board of a charitable organization is a demanding and rewarding job. It is a vital function, as charities work to enhance the quality of life in our communities.
But becoming a board member for a charitable organization means more than merely accepting an honorary title or helping a charity that contrib- utes positively to the lives of people in the community. When you become a board member, you take on an im- portant job with speci c legal respon- sibilities.
LEGAL OBLIGATIONS OF BOARD MEMBERS
Board members of nonpro t orga- nizations have four basic obligations to the charities they serve: duty of care, duty of loyalty, duty of compli- ance and duty to maintain accounts and records. Observing these duties requires board members to pay atten- tion, ask questions and take the role seriously.  e top priority as a board member is to keep faith with donors and stakeholders, ensuring that the organization is able to honor and per- form its mission now and in the fu- ture.
Board members are the  rst line of defense for ensuring the integrity of charitable organizations and the entire philanthropic sector.  ey are legally bound to make certain all des- ignated resources are used e ectively and e ciently for the implementation of an organization’s mission and not for anyone’s personal bene t. Only an
active board that routinely develops and evaluates programs and policies having to do with day-to-day opera- tions in the organization can success- fully meet that obligation.
Before agreeing to serve on a board, you should ask how the board oper- ates, whether job descriptions are available and what you will be expect- ed to do. Examine past board meeting minutes,  nancial 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  lings with the IRS and the Ohio Attorney General’s O ce.  e contents of these documents — or the lack of docu- mentation — could signal potential problems or indicate how much work must be undertaken to properly es- tablish and operate a governance structure for the organization.
CHARITABLE ORGANIZATION OVERSIGHT
 e Ohio Attorney General’s O ce regulates charitable organizations and assists board members with meeting their responsibilities. Board gover- nance training and related materials are among the resources available at www.OhioAttorneyGeneral.gov to help new leaders of charities. Also, questions about training and resourc- es for charitable board service and charitable fundraising can be emailed to [email protected] General.gov.
Publicized incidents of the , em- bezzlement and other fraudulent ac-
tivities 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 un- covered wrongdoing more quickly or prevented it altogether. Donors and stakeholders deserve the assurance that their gi s and provided resources are properly protected and utilized.
 e Ohio Attorney General’s Char- itable Law Section also investigates charitable organizations.  e Section regularly receives complaints about lax controls and misuse of funds at charities and it launches investiga- tions when problems are suspected or discovered, and the o ce has broad authority to take action to protect or recover charitable assets. Board mem- bers who scheme to defraud donors or charities may face civil as well as criminal actions to recover lost re- sources.
Complaints can be  led online at www.OhioAttorneyGeneral.gov , mailed to the Charitable Law Sec- tion at 150 E. Gay St., Columbus, OH 43215, or individuals can call 1-800- 282-0515 to report any suspicious charities or solicitations.
BETH SHORT HANDLES OUTREACH AND EDUCATION FOR THE OHIO ATTORNEY GENERAL’S CHARITABLE LAW SECTION AND HAS SPENT HER CAREER WORKING FOR AND WITH NONPROFIT ORGANIZA- TIONS. SHORT’S WORK IN THE CHARI- TABLE LAW SECTION FOCUSES ON THE DEVELOPMENT OF STRATEGIES AIMED AT STRENGTHENING THE NONPROFIT SEC- TOR.
ATTORNEY AT LAW MAGAZINE · OHIO · VOL. 5 NO. 2 6


































































































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