Philanthropy Front and Center - Washington, DC

Nonprofit Governance with the DC Bar

Last week we had the good fortune to have Regina Hopkins present a "Nonprofit Governance: Understanding the Responsibilities of Board and Staff" program at the Foundation Center, DC. Particularly interesting were several legal points that dealt with responsibilities specific to the board, those specific to staff, and those that are shared. Among other points, you may be interested to know a few points of DC nonprofit law:

• Board members cannot vote by proxy. Yes, you must vote if you're on the board- you can't delegate your responsibility to anyone else.
• Only the board can (and must) formally adopt conflict of interest and whistleblower policies.
• Board members cannot take advantage of business opportunities that would be of interest to the nonprofit without first offering it to the nonprofit.
• DC nonprofits must have two officers: one responsible for the management of the organization, and one responsible for its financial affairs. Even if you don't have a CFO, whoever performs those functions is considered that person for legal purposes.

There was a great deal more covered, and if you'd like a copy of the handout, shoot me an email- djo at foundation center dot org.

However, you also can (and most certainly should) take a look at the new DC Bar Pro Bono Progam Community and Economic Development Project webpage. There are some really great resources there on how to operate legally (and well) in the District of Columbia, and they cover the points listed above and much more.

Particularly excellent are the Legal Alerts, which bring together all of the DC Bar's many documents that detail the laws and regulations affecting nonprofits in the region. This sort of information- all in one place- is an incredible, free resource. Just as an example, there is an 8 page pdf that discusses DC, Maryland and Virginia Charitable Solicitation Requirements. If you're raising money in those states and you don't know what those are, you'll want to go read it right now. Also listed are webinars, an events calendar, and more.

Thanks again to Regina for the great class, and again, you can always check out more upcoming programs on our GrantSpace calendar.

Wrapping up: The New DC Nonprofit Code

Last Wednesday I had the privilege of attending an informative workshop on the new DC nonprofit code, which we've written about repeatedly in the past. The DC Nonprofit Corporation Act of 2010 makes several changes to the laws governing DC nonprofits, and many may have to change their bylaws/procedures to comply.

Many thanks to the DC Bar Pro Bono Program Community Economic Development Project, and particularly Regina Hopkins, for compiling this information and conducting workshops. Given the scale of the changes included in the DC Nonprofit Corporation Act of 2010, they've done the regional nonprofit community an enormous service.

For an overview of the critical provisions DC Nonprofit Corporation code, please download the DC Non-Profit Code Summary Sheet.

There are also three issue-specific legal alerts available:

• The composition of board and advisory committees. Download DC-NonprofitCodeAlert-Committee.
• The "duty to inform" for directors and officers. Download DC-Nonprofit CodeAlert-DutytoInform2.
• Under what circumstances a nonprofit may indemnify an officer or director.  Download DC Nonprofit Code Alert - Indemnification.

To read more about the changes, check out a slide show from a recent ASAE conference which discusses their implications.

Again, many thanks to Regina Hopkins with the DC Bar Pro Bono  Program Community Economic Development Project for sharing this information with us and allowing us to post it on our blog!

New D.C. Nonprofit Corporation Code's Rules on Indemnification

We know legal information doesn't have the sizzle of a super-controversial blog post, but this is important stuff. As we've mentioned before, the DC Nonprofit Corporation Act of 2010 makes substantial and important changes to the laws that govern nonprofit organizations in the Washington, DC area. Many thanks to Regina Hopkins with the DC Bar Pro Bono  Program Community Economic Development Project for sharing this information with us and allowing us to post it on our blog!

In February 2011, Mayor Gray signed into law the D.C. Nonprofit Corporation Act of 2010. The legislation overhauls the laws governing nonprofits organized under D.C. law. It is the first substantial change to the D.C. Nonprofit Code since 1962.  The new law applies to nonprofit corporations formed under the 1962 D.C. Nonprofit Code, effective January 1, 2012. The effective date for so-called "Old Act" companies formed under the pre-1962 Nonprofit Code has been delayed until January 1, 2014.

One of the most important changes the new Nonprofit Code makes is with respect to the indemnification of directors and officers.  When a nonprofit indemnifies a director or officer, it is agreeing to pay his or her legal fees, expenses, judgments and settlement costs if the officer or director is sued as a result of his or her service with the nonprofit.  Indemnification can play a key role in attracting qualified individuals to serve as directors and officers, as it provides assurances that they will not be personally liable for costs incurred in the carrying out of their official duties.

The new Nonprofit Code sets forth detailed rules about when a nonprofit may indemnify a director or officer and what steps it must take in order to determine whether the director or officer qualifies for indemnification.  In order to help nonprofits understand exactly what the new rules provide, at the D.C. Bar Pro Bono Program's request the law firm of Gibson, Dunn & Crutcher has generously prepared a legal alert which spells out the new requirements in more detail. 

If you have any questions about the alert, please contact Regina Hopkins at rhopkins@dcbar.org or Darryl Maxwell at dmaxwell@dcbar.org.

The Duty to Inform for DC Nonprofits

Originally posted in the Legal Alert published by DC Bar Pro Bono Program Community Economic Development Program  and reposted with their permission.

In February 2011, Mayor Gray signed into law the D.C. Nonprofit Corporation Act of 2010. The legislation overhauls the laws governing nonprofits organized under D.C. law. It is the first substantial change to the D.C. Nonprofit Code since 1962.  The new law applies to nonprofit corporations formed under the 1962 D.C. Nonprofit Code, effective January 1, 2012. There is a delayed effective date for so-called "Old Act" companies formed under the pre-1962 Nonprofit Code.

One of the most important changes the new Nonprofit Code makes is that now officers must comply with a new fiduciary responsibility.  Under the Nonprofit Code, an officer now has a duty to inform.   This means that the officer must provide other officers and the Board of Directors with all the information they need to carry out their responsibilities.
 
In addition, an officer must inform a superior officer or the Board of Directors if the officer believes that another person within the organization has breached his or her duty to the organization or has committed a violation of the law involving the nonprofit.

In order to help nonprofits understand exactly what this new duty to inform entails, the D.C. Bar Pro Bono Program has prepared a legal alert which spells out in more detail exactly what is expected by the new duty to inform; who is subject to the new requirement; and what steps the nonprofit should take in order to comply. 

If you have any questions about the alert, please contact Regina Hopkins at rhopkins@dcbar.org or Darryl Maxwell at dmaxwell@dcbar.org.

See also our previous post in November on the new act.

Are you ready for the new DC Nonprofit Corporation Code?

This information originated with the DC Bar Pro Bono  Program Community Economic Development Project.  The DC Council has enacted a new Nonprofit Corporation Code that goes into effect January 1, 2012.                 

The DC Office of Partnerships and Grant Services is hosting a program on the new code on Wednesday, November 30, 2011, from 10:00am - noon. Regina Hopkins, Project Director for the Community Economic Development Project will lead the workshop. Call (202)727-8900 to register.

The new Nonprofit Corporation Code makes several changes to the laws governing DC nonprofits. Among other provisions it changes the rules regarding registered agents; fiduciary duties of officers and directors and under what circumstances a nonprofit may indemnify an officer or director.

In order to help DC nonprofits comply with the new Nonprofit Code, the D.C. Bar Pro Bono Program has prepared this e-alert on the new rules regarding committees of the board. It discusses:

• the role of committees;
• what authority the board of directors may delgate to a committee;
• what actions must be taken to appoint a committee; and who can serve on it.

Please contact cedinfo@dcbar.org with any questions.

To read more about the changes, check out a slide show from a recent ASAE conference which discusses their implications. Several area law firms and associations also have posted interpretations of the code on their web sites.  Search: DC Nonprofit Corporation Act 2010 for postings.

Is your board ready for these changes?