Member has standing to sue directors for breach

A member of an Illinois nonprofit corporation has standing to sue members of the board of directors for breach of fiduciary duty by establishing “an undisclosed side agreement among themselves” that he claims disenfranchises members by distorting their votes. But a federal District Court in Missouri has directed the member to show whether the amount in controversy exceeds the $75,000 minimum necessary to confer diversity jurisdiction on the court. Andrew Schlafly, son of Phyllis Schlafly who was founder of the Eagle Forum, is a member of the nonprofit Eagle Forum and a former at-large director. Under the Forum’s bylaws, it has eight self-perpetuating directors and an at-large director...

lock The full text of this article is available to paid subscribers only. Login or subscribe to read more

November Webinar

Fiscal Sponsorship: For the Funders, Sponsors and the Sponsored
Wednesday, November 20, 2024
1:30-3:00 PM ET

Fiscal sponsorship is a time-honored method to spawn new charitable activity when the people with the vision and the energy to do the work do not have recognition of federal tax-exempt status.

It can function smoothly as an incubator of important new projects. Or it can function badly as a serious trap for the unwary.

This webinar will define fiscal sponsorship and discuss the most common types of sponsorship arrangements. It will discuss the advantages and disadvantages of each type and the special considerations for funders, sponsors, and the sponsored. It will review specific critical provisions of sponsorship agreements, particularly termination and exit issues.

Learn more and register

PA Bar Institute

Don Kramer's annual what's new and what's hot in nonprofit law. The presentation included discussion of:

* Federal tax law cases, including one to invalidate the requirement for Schedule B on the annual Form 990 for charities and one to challenge the prohibition on electioneering and substantial lobbying, and the request to require demographic information on boards of large public charities on the Form 990.
* Challenges to higher education, including federal taxes, unionization, new Title IX regulations, name, image and likeness issues, and challenges to diversity, equity and inclusion programs.
* Status of the new annual report requirement for Pennsylvania nonprofit corporations.
* Updates on charitable solicitation registration issues.
* Standing issues.
* Special issues with charitable trusts, including one holding that many minor breaches of fiduciary duty can add up to a significant breach of duty.
* Other interesting cases, including one holding that donor lists are not trade secrets subject to protection from use by a former fundraiser.

Buy now a nd listen at your convenience

Nonprofit bylaw review

Don Kramer will review and comment on your own current or proposed bylaws

Do your Bylaws reflect the way you actually operate? Do they protect the interests of those who should be protected? Do they spell out clearly how to deal with governance issues? Or do they create uncertainty for those who have to implement them?

Most nonprofits don't spend a lot of time looking at their Bylaws until there is a question or a dispute. That's when you need bylaws that are clear and unambiguous, so your questions on how to proceed are already answered. That's when bad bylaws can lead to unnecessary controversies or even costly litigation. Nonprofit Issues editor Don Kramer will review your current or proposed Bylaws to see if they work for you.

Learn more

New Subscribers can have full access to the entire website and all editions for 3 months for only $17.95.

Subscribe Today

Here's what our readers say about Nonprofit Issues:
Thanks again for your excellent and helpful website - it's a wonderful resource for the non-profit community! --Stephanie H.

Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --Richard T.

SAY THAT AGAIN?

October 29, 2024

Marketers love to make their prospects feel special. But they sometimes don’t seem to want you to think about what they say to do it.

I received two items recently that made me wonder what they were thinking.

I got a package of discount coupons in the mail that touted a “specially curated” set of offers. I thought they might have my personal interests at heart until I saw it was addressed to “Resident.”

I also got a text message saying that “Kellyanne Conway wants YOU and only YOU to know what the latest polling shows” about the Presidential election. I could click the link to read the “exclusive” memo.

And I will be the only one to know? Really? Do they really think the recipients are that stupid?

See our "Say That Again" collection

Special Report Available

Increasing Gender Diversity on the Boards of Nonprofit Eds and Meds: Why and How to Do It

This report provides a rare inside view on barriers women face to selection and success that are particular to nonprofit organizations and makes specific recommendations on how to improve the gender ratio.
Download the full report free

YOUR ONE-STOP PLACE FOR NONPROFIT LAW YOU NEED TO KNOW

Member has standing to sue directors for breach

Member has standing to sue directors for breach