I am aware of nonprofit organizations with 501(c) designations that are unable to maintain their obligation and duty to faithfully meet their primary mission: honesty and transparancy. Attorney Paul D'Alessandro outlines in an excellent article, that every member of a nonprofit board has an obligation to the charitable organization and also the community to operate with a "duty of care". "Duty of care" translates into actions and measures that any reasonable person would behave and proceed in a way that is not reckless. Specifically and especially when it relates to an organization's finances and expenses, to operate in a way that is ethical and honest. "If, for example, a charity had an excellent fundraising quarter, they cannot then decide to pay a bonus to the board members, because this would go against the trust society and the nonprofit has placed in its board members."
I would highly recommend reading and reflecting on Paul's article:
http://www.nonprofitpro.com/article/nonprofit-board-liabilities-legal-responsibilities-board/
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