Can Related People Be on a Nonprofit Board Together? скачать в хорошем качестве

Can Related People Be on a Nonprofit Board Together?

There are few questions we deal with more than this one. That is, how do you deal with related members on your nonprofit’s board of directors. ❗ ❗ ❗ IMPORTANT NOTE: This issue arises primarily when it involves 501(c)(3) public charities. Private foundations can have every member of the board related to one another without problem. Public charities, however, are required to govern at arms-length. That's pretty difficult when a majority of the board is related. Some will argue that there is no written IRS rule prohibiting majority-related charity boards, and that's true to a point. The IRS prohibits inurement and private benefit, which can easily (if unintentionally) occur when charity boards are not sufficiently independent. And while the IRS's own CPE guidance (2009) states that they recommend, not require, boards be majority unrelated, the practical truth is that the IRS rarely follows such guidance. In everyday interactions with charities, the Exempt Organization's division will insist on independent boards. Having worked with over 25,000 startup nonprofits, we can attest that the IRS will treat related majorities as suspect and stonewall public charity status every single time until the board structure is altered to a majority independent. Should a startup charity fight the IRS on this? In our experienced opinion, only if you have concrete, definable reasons that benefit the charity exclusively. Virtually no public charity candidate will be able to say that to the satisfaction of the IRS. Public charities, whether new or already operating, will find that keeping an independent board is a wise and practical choice. 📚 ADDITIONAL RESOURCES •ARTICLE: Related Members on a Nonprofit Board of Directors https://bit.ly/2WAJtnH •VIDEO: What is a Disqualified Person in a Nonprofit?    • What is a Disqualified Person in a Nonprofit?   🏆 YOUR NEXT STEP: •Fill out this form for a FREE consultation on how to start a nonprofit: https://bit.ly/3Tu9nYE •Register for Fundraising TV: https://www.501c3.org/fundraising-tv/ •Download the FREE eBook “10 Things You Need to Know Before Starting a Nonprofit” https://bit.ly/3XhFag0 0:00 Introduction 0:45 IRS Definition of Related 1:41 Why Relations on A Nonprofit Board Matter 2:17 Related Board Members of a Public Charity 4:16 Related Members of a Private Foundation 4:50 Conclusion