Is it legal for an organization to demand a seat on the board of a nonprofit society as a condition of ongoing financial support?
Anyone can ask for representation on the board, but you don’t have to give it. It is essentially an offer for a quid pro quo contract that you can accept or reject. It is done all the time by venture capitalists who are funding start-up businesses. It is much less prevalent in the nonprofit world, although many large charities take the initiative to offer a seat on their board to their major donors.
It is not illegal to provide a seat, but if your organization is a charity and the organization “demanding” the seat is a taxpayer (like a business corporation or an individual), the payment may not fully qualify as a deductible charitable contribution because it is conditioned on receiving something of value in return. That may or may not dampen the donor’s interest in the seat.
You may decide that the donor will bring skills, contacts, and even wisdom in addition to the money and that is worthwhile to give the seat on the board to get these benefits. Or you may decide to characterize it as a payoff that would undermine your integrity. It is really up to you how you want to respond.