Most liability claims filed against nonprofit organizations are the result of an accidental injury or property damage. However, sometimes claims are made against individuals-such as board members, officers, trustees, employees, and volunteers- who while acting on behalf of the organization, might have accidentally caused an injury or damaged another’s property. Board members of a nonprofit organization may believe that the responsibilities associated with operating the organization do not hold the same weight as those for a for-profit organization. Those operating a nonprofit organization should be aware, however, that in some ways they will be held to a higher standard because of the trust they hold on behalf of those benefitting from the services offered.

Board members of volunteer organizations must manage the organization with the same diligence and attention they would apply to a for-profit organization. Board members are bound by the legal duties of care, loyalty, and obedience to the organization. All duties must be performed in good faith and in the best interest of the organization.

Care: This duty extends to questioning and monitoring the activities of the organization, including financial matters, personnel issues, programs, use and maintenance of property, and planning for the future. Board members must actively resist matters they think are not proper.

Loyalty: Directors and officers are required to place the interest of the organization above their own personal interests. They must avoid even the appearance of a conflict of interest and take no action that would be detrimental to the organization in order to benefit themselves or another party.

Obedience: Directors and officers must perform their duties according to the organization’s charter and mission and

according to all applicable statues and regulations governing charitable institutions. A board member may be held personally liable if found to have willfully or negligently permitted the organization to engage in activities beyond the organization’s authority.

The most common claims filed against nonprofits are for wrongful discharge, discrimination, and former employees. However, other claims may be made by anyone inside or from outside the organization. Fortunately, the vast majority of these types of claims are filed against the organization and only occasionally name the board members.

How do you plan on ensuring that your non-profit board members are held legally responsible?