As one embarks upon nonprofit work or board service, one often has on their rose-colored glasses…no controversy, no confrontation, nothing uncomfortable. Unfortunately, nonprofit work and serving on a nonprofit board often involves some very difficult situations and critical confrontations. Today, we are going to delve into what happens when a director (member of the board) believes or suspects illegal activity within the nonprofit (either being engaged in, on behalf of, even if this activity was sanctioned by the board).
Step one: Upon learning of the activity, you must contact the chief executive (executive director) or board chair. If the chief executive or board chair fail to respond, the issue should go to the FULL board.
Yet, this is may not be enough to protect yourself. After all, sometimes people refuse to listen or want to be “Minnesota nice” and not hurt people’s feelings or claim that “this is the way we have always done things.” Unfortunately, this can get the entire board, the nonprofit and individuals into a big pickle. A big legal pickle.
Step two: Make your dissent and consult with personal legal counsel. If, after the board discusses the issue and it is NOT appropriately resolved or if it is a previous issues that the director was not earlier aware of, the dissent needs to be very clearly recorded (in the minutes). You may also want to discuss the issue with counsel to see if further disclosure outside of the nonprofit is required or if you should RESIGN.
Whew. That was a lot and rough. Not what a lot of people expect to do when they sign up to be part of a nonprofit board, but very necessary to understand. Today’s take away, “if you see something, say something, ” the consequences of not doing so are much longer lasting than the few minutes of being uncomfortable during a board meeting.