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Inattentive board personally liable for $2.25M

By Zac Kester, JD, LLM, CFRM, at Charitable Allies |

Nonprofits do such great things. They provide end of life care, fight homelessness, provide free legal services to indigent individuals, honor fallen soldiers, conserve land and water, combat disease, rescue animals, and much, much more. It takes a team to get all this work done. That team is typically comprised of boards and officers.

Nonprofit board members often join the board for good reasons: they are passionate about the organization and its mission, want to develop skills they may not have the opportunity to develop while on the job, seek to build a professional network, or desire to develop a deeper understanding of what it takes to run a successful organization. But all too often, board nbso online casino reviews members fail to ask the hard questions, fail to oversee the organization, and fail to meet their duty of care.

One nonprofit struggled financially and, despite warning signs, the board was inattentive and made slow decisions.

The result? Earlier this year, the individual board members were each found personally liable for $2.25M in damages for providing inadequate oversight, relying on incompetent officers and in failing to take adequate action once they knew there were problems. No director personally or individually engaged in bad behavior other than being inattentive but they were each still held liable.

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