In case your nonprofit organization operates a trust, the directors who sit on the board may perhaps be deemed trustees of your funds. A trustee is usually a individual legally in charge of managing property to get a third party. If you are one particular of those directors who falls in to the particular legal classification of “trustee,” you will have stricter duties than the ones outlined inside the preceding handful of sections. When there’s tiny leeway for directors in conflict conditions, an individual who acts as a trustee on behalf of a trust is given certainly no wiggle area whatsoever. If you are inside the unenviable position of serving as a trustee, right here are a handful of essential guidelines to recall with regards to conflicts of interest:
- If a gift is created for the nonprofit corporation with distinct circumstances attached to it (named a restricted gift), adhere strictly for the terms. The organization is deemed a trustee of those gifted funds.
- If the nonprofit corporation is deemed a trustee of funds in an employee benefit program, do not dip into these funds to meet other organizational requires.
- If prior gifts had been created depending on the nonprofit’s mission, plus the mission then alterations, the nonprofit may perhaps be inside the position of acting as a trustee to assure that the prior gifts are matched up with applications that fulfill the prior mission. Funds held by the corporation in trust need to be held in segregated accounts and clearly identified on the organization’s economic statements.
