Nonprofit Meetings, Minutes & Records: How to Run Your Nonprofit Corporation So You Don’t Run Into Trouble, Second Edition
by Attorney Anthony Mancusco
This book offers some good insights for anyone who serves on the board of a nonprofit organization, especially the board secretary. If the board of directors ignores its bylaws and state nonprofit laws, the organization could lose its tax-exempt status. Director liability is another concern.
The author explains why proper notice of meetings is important, particularly when controversial issues will be decided. “The last thing you want is to hold a meeting, go through intense discussions until you arrive at a big decision, then have a director or member come back and try to set it aside on a claim that a meeting was not properly noticed.” He adds, “Under most bylaws, you can’t approve any items at a special members’ meeting unless the general nature of the proposal was included in a written notice (or waiver of notice) of the meeting.”
The book includes an interesting example of how a proposal was defeated with 33 members voting for, 27 voting against, and 10 abstaining. The yes votes need to constitute a majority of voting members present in order to prevail, so an abstention counts the same as voting against a measure. “Strangely, if the ten abstaining memberships had not attended the meeting, the proposal would have passed—a quorum of 60 memberships would have been in attendance with a majority of the memberships present (33) voting in favor of the proposal.”
Also on the topic of abstentions, “if the board approves a decision that was grossly negligent or unlawful and results in financial harm to the nonprofit, and someone sues, the directors who said nothing, as well as those who voted for the proposal, may be found liable for the decision. If you have doubts about a proposal submitted at your board meeting, vote ‘no’—don’t ‘abstain’ or remain silent as a means of expressing your disfavor.”
Proxies present another potential liability problem. “State law usually allows members but not directors, to designate another person to vote at a meeting by proxy. Even if allowed, letting someone vote for a board member is risky: The absent board member could be held liable for another person’s negligent or ill-advised board decisions.”
“Some state laws and bylaws require that a quorum for members’ meetings be established only once, at the beginning of the meeting… It’s particularly important so that people holding a significant number of votes or proxies can’t leave a meeting to prevent a vote on an item they oppose but don’t have sufficient votes to stop.”
The author also explains when it is appropriate to use written consents in lieu of holding a meeting, and how to write meeting minutes.
While the substance of the book is good, there is some sloppiness in the details. An example from page 28: “If you can’t find your bylaws, or you’re not sure they are correct, follow the suggestions in ‘Organize Your Corporate Records’ in Chapter 1.” However, that situation is not addressed in that section (page 14) or anywhere else in this book. Page 8 states: “If you don’t have bylaws yet or want to prepare new ones, there are books that can help you with this task,” namely two other Nolo books by the same author: How to Form a Nonprofit Corporation in California, or for other states, How to Form a Nonprofit Corporation. Another example is that two of the bullet points under the heading “Premeeting Steps—An Overview” are items that occur during and after the meeting.
In any case, this book would be most useful for a board secretary, as it includes a variety of document templates such as notice of meeting, proxy, minutes, written consent to action without a meeting, and more. The documents are included on a CD-ROM in the print version; a link to documents on the Nolo website is included in the e-book.
Mancuso, Anthony. Nonprofit Meetings, Minutes & Records: How to Run Your Nonprofit Corporation so You Don’t Run into Trouble. 2nd ed. Berkeley, CA: Nolo, 2011. Buy from Amazon.com