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Serving as a Board Member
Table of Contents

Preface and Acknowledgements
13

Introduction
17

1 : The Charitable Gift
25
The "gift"
25
Designating a prior gift
27
Designated bequests
28
Endowment funds
29
Are board members trustees?
31
   Responsibilities if board members are trustees
33
Fundraising inducements
34
Split receipting
34
Deputized fundraising
36
Private vs. public benevolence
37
Deputized fundraising and public benevolence
38
Designation and private benevolence
38
Detached, disinterested generosity
40
Conclusion on gift issues
42
Questions for consideration
43

2 : Organizing As a Charity
45
Governing documents
45
Advantages and disadvantages of different forms of organizing
46
Charitable purposes
46
The deed of trust
48
Policy development under a deed of trust
49
Unincorporated organizations
50
The constitution
51
The bylaws
51
Most common form of church organization
53
Incorporation
53
Incorporating as a society
54
Trusts vs. trustee incorporation
55
Incorporating via special legislation
56
Articles of incorporation or letters patent
57
Consulting legal counsel
58
Corporate bylaws
58
Value and mission statement
59
Summary of charitable-organization types
60
Questions for consideration
62

3 : Boards and Their Members
65
Optimum board size
65
Length of service
67
Rotation of board members
68
The nominating process
68
Source of board nominees
69
Nominating committee members
70
Nominating committee procedures
71
Nominating executive officers
72
Nominating committee report
73
Summary of board and membership involvement
73
Questions for consideration
73

4 : Board Powers and Conducting Meetings
77
Powers and authority of board members
77
The chairperson’s powers
78
Delegating board powers
78
Ensuring proper implementation of board policies and decisions
79
Rules of order
79
Sample rules of order
79
The board acting through committees
83
The audit committee
84
Audit committee members
85
Requirement to appoint an executive committee and an audit committee
85
Other committees
85
Each board member’s legal role and task
86
Board members as charity trustees
86
Board members as the charity’s agents
87
Questions for consideration
89

5 : Charity Board-Members’ Duties
91
The honesty duty
91
The loyalty duty
92
The care duty
94
The diligence duty
95
The skill duty
96
The prudence duty
97
Board-member responsibilities resulting from their legal duties
97
The "follow the leader" syndrome
97
Special-interest groups electing or appointing board members
100
Contracting with other board members or bodies
101
Attending meetings
101
Agreement with board actions
101
The right to participate and be informed
102
Relying on other board members
102
Relying on officers
103
Relying on outside experts
104
Doing nothing
106
Seeing no evil
106
Conflict of interest
107
Liabilities imposed by specific statutes
107
Responsibility to creditors
108
Indemnification and insurance
108
Property and casualty insurance
110
Financial controls and permitted investments
110
Conclusion on board-member responsibilities
111
Questions for consideration
112

6 : Hiring the Chief Executive Officer
115
The CEO
115
The CEO’s job description
116
Hiring the CEO
117
The search committee
117
The search process
118
The pre-interview
119
Obtaining references
120
   Character references
120
   Employment references
121
Board interview
123
The appointment
123
Conclusion on hiring the CEO
125
Questions for consideration
125

7 : Hiring Policies for Other Staff
127
Policy development
128
Qualifications
129
Staff conduct policy
129
Staff conduct in the case of close, private human interaction
132
Types of appointments
132
Recruiting procedures
133
Initial appointment of staff
134
Salary scales
134
Salary ranks
136
Annual evaluation
137
Evaluation for permanent employment
138
Promotion policy
139
Promotion criteria
139
Permanent contract or continuing appointment
139
   Terminating employment
140
   Termination in good standing
140
   Termination not in good standing
141
   Disagreement with the statement of faith
142
   Suspension
143
   A dismissed staff member’s salary
143
   Appeal procedure
143
Confidentiality
144
Organizational charts
144
   Administrative chart
145
   Committee chart
147
Advisors to the CEO
149
Staff attendance at board meetings
150
Staff speaking at board meetings
150
Absence of the CEO
151
Questions for consideration
152

8 : Developing a Conflict-of-Interest Policy
153
Conflict-of-interest types
154
Material, direct conflict of interest
154
Non-material, direct conflict of interest
155
Material, indirect conflict of interest
155
Non-material, indirect conflict of interest
156
Perceived material conflict of interest
156
Perceived non-material conflict of interest
157
What constitutes conflict of interest?
158
Conflict of interest between charities
158
Conflicts of interest for charity directors
159
Conflict of interest or competing tension
160
Conflict of interest defined
161
Conflict of interest involving board members
162
Conflict of interest involving employees
164
Direct, indirect and perceived material conflicts of interest for employees
164
Direct, indirect and perceived non-material conflict of interest for employees
166
Developing the policy
167

Epilogue
169
Appendix
171
Evaluation Instrument
171
Charity Evaluation
173
   Board member
173
   Board quality
175
   Board supervision of staff
176
   Mission and programs
178
   Financial controls
178
   Fundraising
179
   Board performance
180
   Protective instruments
181
Index
182