Legal Question in Legal Ethics in California

What are the legal obligations of a not-for-profit community organization [501(c)3] to its community and its members. Let me be more specific with direct questions:

1. Can Board meetings be private, or are they required to be open to the public?

2. Are financial records allowed to be secret, so the membership and community have no way of knowing how donations are being used, etc.?

3. Are audits required? If so, can/must the results be shared with those who contribute to the organization?

4. Are there any requirements regarding an annual performance evaluation of the executive director? If so, should such reports be shared or may they be secretive?

5. An annual meeting is required, I understand. But what requirements, if any, are there for publicizing the time and place of the meeting, etc.?

You get my gist. Any related information to these questions in the form of published reports, articles, etc., would be most appreciated. Many thanks.


Asked on 8/21/10, 11:38 am

1 Answer from Attorneys

1. Up to the bylaws of the corporation.

2. The non-profit tax returns are public and disclose much of this information. Nothing else MUST be disclosed, but failure to do so will hinder fundraising.

3. Yes but no they do not HAVE to be shared. On the other hand you aren't going to get much in the way of donations from any foundations or major donors if you don't.

4. They are private, but again, donors can ask for what they want and refuse donations if you keep everything secret.

5. Again, see the bylaws.

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Answered on 8/26/10, 12:02 pm


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