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Board Governance

"Top 10 Legal Trends for Non-profit Leaders"
By Taylor Fernley, President & CEO

As I travel about the country, I am becoming increasingly concerned with the lack of knowledge non-profit leaders possess on legal trends impacting their industry. Did they not listen during their Board orientation session? Did they not listen to their predecessors? For whatever reason, a void exists on information that non-profit leaders must have at their fingertips.

Move over David Letterman. Here are my “Top 10” Legal Trends that all volunteer leaders must have on their radar screen, specifically:

  1. The non-profit world is coming under greater scrutiny by law makers.
    Our friends in the legal and regulatory profession first targeted the for-profit world. Now, guess who’s next? Get your house in order by becoming familiar with the Sarbanes-Oxley Act.
  2. Learn from the governance scandals that have plagued the non-profit world.
    Do the names “Smithsonian” or “American Red Cross” ring a bell? No one is immune. To insure that they do not occur within your organization read this article written by Ted L. Ramirez, Esquire from Venable, LLP in D.C.
  3. Pull out and dust off your Document Retention Policy.
    In the event a subpoena is served, all documents may be used against your organization, your members and yourself. If you do not have a written policy, get one. If you do have one, live by it.
  4. Educate your association Leadership on a regular basis.
    Consider showing your Board the video from Commonwealth Films entitled “THE PRICE” on an annual basis. It focuses on how idle comments and discussions can lead to legal dilemmas. You can find more information about the movie and how to order at http://www.commonwealthfilms.com/programs/single.asp?
  5. Understand what the new IRS Form 990 means to your organization.
    Last year, the IRS released the overhauled Form 990. It is substantially different from its predecessor. Are you in compliance?
  6. Protect your organization from legal pitfalls on the Internet.
    From copyright and trademark infringement to defamation of character to privacy issues, legal pitfalls abound on the web. How are you protecting yourself?
  7. Meeting contracts and potential liabilities.
    Hotels and Convention Centers are becoming increasingly more challenging to do business with. Volunteer leaders and staff must understand the potential liabilities that exist here. How aware are you?
  8. Update your organization’s Conflict of Interest Policy and Disclosure Process.
    Most of these policies are vague and ambiguous. Consult your attorney for more details.
  9. State your position.
    Begin each Board Meeting, Committee Meeting, and General Session with the association’s affirmation to their written Antitrust Guideline Statement.
  10. Don’t be lulled into a false sense of security.
    Non-profits are under the microscope. Give these trends the attention they deserve.

Non-profit leaders must take their jobs more seriously and be fully attuned to these and other trends impacting the association world. It is going to get increasingly more difficult to stay on top of these laws; however, we have no option other than to devote the time and attention to educate ourselves on the trends impacting leaders of non-profit organizations both today and into the future.