A private foundation provided a very large portion of the money used to construct a new facility for a private school. Upon completion of the facility, the foundation was not pleased with the management of the school. It demanded that all of the existing board resign and a new board was implanted to run the facility. No written agreements were in place when the donor provided the construction funds. Has a crime or legal violation been committed?
It was obviously heavy-handed and overreaching, but I don’t see any law that has been broken. The foundation could have conditioned the grant upon a change in leadership, and the board could have decided whether or not to accept the gift. Without such conditions, the board did not have to resign, even if pressured to do so after the construction. If the school was dependent upon the foundation for its continued success, it might have been a good decision under the circumstances. But it is not a good idea to let a charity get into the situation where a single donor can have so much influence.
With pressure mounting on nonprofits to consider affiliations with other organizations, this workshop is designed to help you better navigate the world of mergers, acquisitions and affiliations. Unlike the corporate world, there are no financial "matchmakers" to help nonprofits identify successful partners for a merger. Learn more in our pre-recorded webinar.
Weekly question and answer
Notice of each full edition
and its free stories
Report on 501(c)(3) electioneering
What our readers say about Nonprofit Issues
Once again you've tackled a tricky question and explained it so we all can understand the issue.--M.V.
Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --R.T.
Have a question?
Other ways to
Talk to the Editor
Next Conference Call:
Thursday, May 23, 2013
Participate in this bi-monthly telephone seminar conference call and ask your questions directly to Editor Don Kramer.
Access the entire site
($9.95/24 hours, $17.95/3 months).
Full Day Program
A well-received full-day program that covers the current hottest topics in nonprofit law. Qualifies in Pennsylvania for Continuing Education credits.
Don is available for programs and speaking engagements ranging from a one-hour presentation to a full-day primer on nonprofit law. Contact us if you are interested in having him speak at your program.