It’s not to provide free work
Nonprofit organization leaders often ask whether they need an attorney on their board of directors. My answer is usually a qualified yes. Attorneys (and other professionals) serving on nonprofit boards can be helpful, but probably not for the reason most leaders think.
Any organization can have legal minefields to navigate, but nonprofits have additional issues that can create liability or cause them to lose their tax-exempt status. So specific skill sets and expertise represented on the board can be of great value to the organization and the implementation of its mission.
Selecting board members shouldn’t be taken lightly as they have significant legal and ethical duties and responsibilities. Nonprofits don’t have owners, so it is the board’s responsibility to safeguard the organization for the benefit of the public.
One core board member responsibility is called the duty of loyalty. This means putting organizational objectives above a board member’s own self-interest. Directors are required to perform their duties in good faith, with ordinary care, and in the best interests of the nonprofit. Business relationships between board members and the organization create a conflict between the organization’s objectives and the board member’s self-interest. Having the attorney who is a board member handle litigation or negotiate a contract while paying them to do so poses questions about that board member’s duty of loyalty.
Conversely, performing pro bono work for the organization while sitting on the board creates a different problem. What if the attorney’s work product isn’t satisfactory? It is uncomfortable, at best, to fire someone who also sits on the board.
The same questions apply to board members who perform other free services. Consider if the board member who is a plumber volunteers to do some work and floods the building. Will his insurance cover the damage created by the work he did for free? Will the organization’s insurance cover the damage created by volunteer labor? Some professionals (e.g., engineers and architects) may not have coverage for work that is done without charge.
What then is the role of professionals on a board? Why have them if you can’t get free work from them?
Those professionals are there to advise the organization as a board member, not as a service provider or volunteer. It is an oversight role. Attorneys, accountants, and other professionals can help the nonprofit’s leadership think through issues and identify risks and solutions. They likely can also help connect the nonprofit with outside professionals and experts to implement those solutions, perhaps securing those services for free or at a reduced cost. They can also supervise the outside professionals and advocate for the organization’s needs and positions.
Yes, attorneys (and other professionals) on your board can be a great resource. Use them wisely.
Robin Minick can be reached at firstname.lastname@example.org.