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How do we deal with perpetual board?

Your Legal Questions Answered

How do we deal with perpetual board?

The bylaws of a 501(c)(3) organization provide that a Director will serve 3 years. The state nonprofit corporation law provides that unless otherwise stated, a Director will serve 1 year. Can a Director continue to serve indefinitely after serving a 3-year term?
We have a situation in our town where the directors keep themselves going by voting for each other to remain on the board year after year. Is this legal? If not, what can members of the community do when our tax dollars are being given to this organization as grants?

It is certainly permissible for a self-perpetuating board to continue to re-elect its members to consecutive terms.  Although a lot of people think there ought to be limits on the number of terms a person can serve consecutively, I am not among them.  (See Ready Reference Page:  “Term Limits Are For Cowards.”)  I think people ought to be able to continue to serve as long as they contribute significantly to the organization’s work.
That doesn’t mean that those who are providing support to the organization should not review its activities to assure that it is doing what it is supposed to be doing.  If your local government is funding the operations, it can determine whether it is getting its money’s worth and stop, or condition, its funding if it is not satisfied.  A dissatisfied public can make its views known to those who make such decisions.  (Think TARP.)  With government funding it is ultimately a political issue.

Tuesday, February 17, 2009

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