Nonprofit Law: Understanding Your Legal Duties and Responsibilities
Before taking up any duties as a volunteer in an organization, profit or nonprofit organization, one needs to understand what is expected from them if they are placed in office. Individuals should take the responsibility of researching the position they are taking before actually taking it. This helps one know the ethical and legal duties and responsibilities, thus improving efficiency and accountability.
Ethical and legal responsibilities of a minority board or committee members
Some of the moral and legal obligations of minority board members include;
Duty of care: Nonprofit organizations improve the quality of life of individuals and society as a whole. The minority board has a responsibility to ensure all the resources and assets entrusted to these organizations are utilized prudently. They are expected to pay attention to the matters affecting the organization due to their personal issues.
Duty of loyalty: Committee members of a nonprofit organization are responsible for ensuring that they prioritize the organization's interests before their own. Disclosure of a conflict of interests should be done as soon as it is recognized. Members should exclude themselves from participation in discussions and votes that concern a conflict of interest.
Duty of obedience: This requires board members to adhere to applicable laws and
regulations. All committee members are required to abide by the organization's policies and by-laws.
Factors that may lead to negligence of ethical and legal responsibilities
However much these duties and responsibilities are critical, some elements may lead to negligence of them by the minority board, these includes;
Situational pressures; Research has shown that most people succumb to may undermine their moral conduct when exposed to a lot of pressure, especially when instructions and directives come from their supervisors.
Peer pressure; Influence from peers is a significant factor contributing to the negligence of legal and ethical duties in nonprofit organizations, especially in situations involving payoffs from bending of rules.
Conflict of interest; Due to arrogance or greed, committee members may act selfishly in serving their needs if there is a conflict of interest to benefit from transactions and activities.
Actions that can be taken in case of misconduct in the organization
There are several possibilities of an occurrence of abuse of power in a nonprofit organization. These usually happen due to some individuals in the organization carrying out some activities that constitute criminal activities and other evils that might damage the credibility and reputation of a nonprofit organization. On finding out about these, the minority board should;
Confront the people involved openly and directly- Fraudulent activities in an organization makes the organization lose focus of its mission. If the committee members discover any malicious transactions or activities, they should confront the individual(s) involved. Explanations should be demanded from involved parties. In cases where the activities or transactions were not intended, a warning should be issued to prevent such behavior in the future.
Organize special committee meetings to discuss behavior- On discovering self-serving activities or not going by the organization's charter and by-laws, the minority board should call for a meeting to discuss these behaviors. This intends to rectify the behavior in the organization or decide on the next course of action about the behavior.
Reporting of the person involved- Committee members should follow the organization's laid down policies and procedures for reporting individuals engaged in abuse of power, crime and misconduct. These individuals should be held responsible for their transactions and activities that go against the organization's mission.
Removal of the involved parties from the office- There are individual(s) in nonprofit organizations who are toxic and are driven by personal agendas. They abuse power and engage in crime, bully other staff members and their actions most of the time serve their selfish agendas. On finding out about these practices, the minority board should investigate as per the organization's policies and procedures. If found guilty of the charges, the involved parties should be removed from office.
Consequences of neglecting ethical and legal responsibilities
Although some believe that acting against those who do not adhere to a nonprofit's moral standards is challenging, not acting might lead to even stricter consequences. Some of which includes;
Legal action- There are laws and regulations to ensure good governance and accountability of organizations, for example, state laws. The nonprofit organization also have charters. Both state laws and organization's bylaws must be adhered to. Failure to adhere to these rules and regulations leads to legal consequences for involved parties.
Downfall of nonprofit organizations- Many nonprofit organizations depend on donors, grantors or public sources for support. Negligence of ethical and legal duties may lead to massive financial loss, which may, in turn, lead to these parties withdrawing financial consent. As a result of inadequate funds to keep the organization running, nonprofit organizations may end up collapsing.
Reputation damage- Nonprofit organizations are formed to improve a particular group of people's qualities of life, depending on the type of services offered. Cases of misconduct, negligence of duties, abuse of power in such organizations damages their reputation and credibility.
Penalties- The minority board is responsible for ensuring that the organization complies with laws and is accountable for its activities. Failure to report misconducts such as abuse of power, crime and misfeasance may result in massive penalties.
The board acts as the face of a nonprofit organization. Before volunteering to be part of the board, individuals should research the duties they are expected to perform. In disseminating tasks and managing the organization, committee members should act with the utmost integrity and transparency to enhance the trust of the donors, beneficiaries and society as a whole. Moreover, Committee members have the responsibility of leading by example through promoting an ethical and integral environment.