As the governing body for a public charity, boards of directors have legal obligations. According to BoardSource, there are three key responsibilities held individually and collectively:
Duty of Care — to actively participate in making decisions on behalf of the organization and to exercise best judgment while doing so.
Duty of Loyalty — to put the interests of the organization before personal and professional interests when acting on behalf of the organization in a decision-making capacity.
Duty of Obedience — to ensure the organization complies with the applicable federal, state, and local laws and adheres to its mission.
How many nonprofit board members even know about these legal duties? Would it matter if they did? Boards of directors are not supposed to be “rubber stamps” and automatically approve everything put in front of them, but oftentimes they do. They assume the Executive Director and the professional staff are trustworthy, and, after all, board members are volunteers, trying to do their civic duty.
In the January 2024 issue of Chronicles of Philanthropy, an article examines the case brought against the National Rifle Association (NRA) by the State of New York. The NRA is chartered in the state of New York, which means state law has “the ultimate oversight over nonprofits and their leaders.”
How different would it have been for the NRA if their board members had asked more questions and had not “rubber stamped” the millions in expenditures by Executive Vice President Wayne LaPierre.
An interesting solution to the problem of complacent boards is offered in this article, namely, the “designated contrarian.” This is not a new idea. Several academic teams conducted research on the value of divergent opinions in 2015.
The solution posed in the Chronicle article suggests that the “contrarian” position be rotated among board members. Their job would be to ask critical questions and push for robust debate about organizational decisions. The board member in this devil’s advocate role would need to have the sensitivity to see the differences, recognize the potential conflict, and communicate in a non-confrontational way.
This way of asking questions comes naturally to some people. You may know someone who is contrary and asks too many questions. But as we’ve learned in the lawsuit, New York Attorney v. NRA, it’s better to ask questions now than pay for misdeeds later.
Michelle Crim, CFRE
Dynamic Development Strategies can help. We offer coaching, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.