You Ask the Questions – August 2010

1.  What are the key duties of a Board of Directors?

A Board is:

•          Group of people legally charged with the responsibility to govern a corporation.
•          The legal authority of a Board is vested in all Board members not individual Board members.

8 key responsibilities:

1.       Responsible for duties of care, loyalty and obedience.
2.       Establishes plans for the organization.
3.       Determines organization’s mission and purpose.
4.       Selects and manages CEO or Executive Director.
5.       Ensures adequate resources for the organization.
6.       Determines and monitors organization’s programs and services.
7.       Enhances organization’s public image.
8.       Assesses its own performance.

2.  Is there a difference between “directors” and “trustees?”

These terms are often used interchangeably.

3.  Do all non-profits have to be about helping others?

All nonprofits recognized as charitable and therefore tax-exempt by the Internal Revenue Service must be the definition outlined in Internal Revenue Code 501(c)3. To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.  The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.