NONPROFIT LAWS: BOARD RULES AND REGULATIONS
Released August 2016
Though this study was just released, the initial research began years ago with the simple question “Can nonprofit boards legally vote online?” The intent was to determine the legal parameters within which a board could use board portal technology to manage its voting procedures. In response, BoardEffect published a March 2012 research report titled “U.S. Laws Governing Nonprofit Boards and Electronic Voting.”
Since that time, there has been widespread adoption of board portals by nonprofit organizations, with online voting representing a core board activity. Nevertheless, questions persist regarding the legality of online voting, with many new questions and concerns arising as board portal adoption becomes increasingly pervasive. Uncertainty in this area has also grown as nonprofits seek to navigate a rapidly evolving legal, technical, and governance landscape.
It is with all of this in mind, that BoardEffect has updated and significantly expanded its initial research in this field. This latest scope of work focuses on answering recurring questions among nonprofit boards regarding the legal ramifications of utilizing technology.
The resulting study captures findings from this research. We hope to help inform our clients and others on the state laws that should be reviewed and understood in the context of implementing board management software.
HOW TO VIEW THE DATA
STEP 1
VIEW THE STUDY
Please select the state or topic area you are interested in from the drop-down menu at the top of the page. For a particular state, please select “State Summaries”.
STEP 2
CHOOSE A STATE OR TOPIC AREA
On the State Summaries page you will see a map of the United States. Hover over the state of interest and click. The data will appear below the map.
When using the individual topic area pages, you will be presented with a chart and a map. Hover over each state to see the law that applies to each.
STEP 3
VIEW RESULTS
Once a state or topic area is selected you will be presented with the results. In the State Summaries each topic will have a short form description of legal compliance. If you click on the arrow icon to the left it will expand revealing the long form content from each state.
When using the individual topic area pages, you will be presented with a color coded map and chart.
DEFINITIONS OF TERMS USED IN THIS STUDY
We chose the following 13 topic areas to survey in the Study because we believe these board activities are reasonably supported by the functions of board portal technology. For a detailed look at how we define these terms, see below.
Actions refer to votes or any decision that requires the input of the full board.
Refers to the actions of board members that have a material interest – whether direct or indirect – in an issue being decided by the board. An example of a conflict of interest might be a board member who is a senior officer of a company with which the nonprofit is considering doing business.
Refers to the way new board members are selected/approved to serve a term on the board.
Refers to the use of technology other than hard-copy mail used in board communications, including meeting notice, voting, approvals, and other common board communications.
Refers to the physical/virtual location where regular and special board meetings may occur.
Refers to the requirement of organizations to alert board members in advance of the date, time, and location for a board meeting. The provisions in Notice of Meeting and Waiver of Notice also define what constitutes “notice.”
Establishes the minimum number of voting members that must be present at a meeting in order for a vote to occur.
Refers to the termination – by the organization – of a board member’s service on the board.
Refers to legal provisions requiring nonprofit boards members to reside in the same state where the nonprofit is incorporated.
Refers to the termination – by the board member – of the board member’s service on the board.
Refers to the number of years a board member serves in a single term, and any provisions in the state code to limit the number of terms (consecutive or non-consecutive) a member may serve.
Refers to a seat on the board – as outlined in the organization’s bylaws – that is not currently filled by a member. The vacancy could occur due to resignation, removal, or attrition.
Refers to the rights of board members to “waive” their right to be notified in advance of board meetings, and to the conditions under which an organization would not need to provide advance notice of a board meeting.
RESEARCH APPROACH
Learn more about the making of the Nonprofit Laws: Board Rules and Regulations Study — background, research approach, definitions, and about the authors.
STUDY BRIEF
Download the Nonprofit Laws: Board Rules and Regulations Study Brief to share with anyone involved in supporting the work of nonprofit organizations.
DISCLAIMER
This study represents a compilation to the best of our ability of the information available through public records on U.S. state laws concerning electronic voting and other areas of responsibility of nonprofit boards. The information contained in this study does not represent legal advice of any kind and should not be used in lieu of legal counsel. This study does not supersede any organization’s own bylaws; nor does it supersede any current local, state or federal laws in the U.S., nor laws of any countries outside the U.S. In addition, due to the constantly changing nature of online records, we cannot guarantee that the links to related websites listed are current.
