Article Archives >> To the Point
Can personal legal ramifications (for example, safeguarding a board member's personal assets from lawsuit) be curtailed by establishing an indemnification clause in a nonprofit's bylaws?
State
nonprofit corporation laws ordinarily permit a corporation
to indemnify an officer or director (or other volunteer) who
is brought into a legal proceeding because of the person's
participation in work for the organization, except in certain
situations such as those involving self-dealing, willful misconduct,
or tax liabilities. One of the key questions to ask before
agreeing to serve on a nonprofit board is whether the organization
has an indemnification policy properly spelled out in the
bylaws, and whether it has insurance to back it up. Many will
not agree to serve unless they are assured that they will
be reasonably protected in the event of litigation. (See
Ready Reference Page: “Directors Often Fear Risks of
Personal Liability.”)
Rev. 3/21/2007
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?
If you can't find your answer, submit a question and Don will pick one question a week to answer online and to include in our weekly e-mail notice.
Other ways to
find answers:
Talk to the Editor
Next Conference Call:
Tuesday, February 14, 2012
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).
Nonprofit Issues
Live
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.
Speaking Engagements
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.