smu school of law role of the general counsel corporate governance in the nonprofit setting prepared...

SMU School of LawSMU School of LawRole of the General CounselRole of the General Counsel

Corporate Governance in Corporate Governance in the Nonprofit Settingthe Nonprofit Setting

Corporate Governance in Corporate Governance in the Nonprofit Settingthe Nonprofit Setting

Prepared By:Darren B. MooreBourland, Wall & Wenzel, P.C.301 Commerce Street, Suite 1500Fort Worth, Texas 76102(817) 877-1088E-mail: dmoore@bwwlaw.com

©Bourland, Wall & Wenzel, P.C.

Facts and Figures

Facts from the Independent Sector.

In 2009, there were over 1.9 million nonprofit organizations in the United States.

Nonprofit vs Charitable Organization

Nonprofit Organizations

Tax-Exempt Organizations

Charitable Organizations

Private Foundations

501(c)(3) Elements

Proper organizational structure

Organized exclusively

for charitable purposes

Operated exclusively

for charitable purposes

No part of net earnings inures to benefit of private

individual

Not an action

organization

Employment & Economic Impact

• 501(c)(3) organizations employ approximately 10% of the workforce.

• Employees of (c)(3)s accounted for 6.6% of wages paid in the U.S. in 2004

• In 2009, the nonprofit sector accounted for 5.5% of the GDP

How Much Should We How Much Should We WorryWorry

About Legal Compliance?About Legal Compliance?

THE PLAYERSTHE PLAYERS

The RulesThe Rules

• Fiduciary Duties: Owed by Directors and Officers

The ToolsThe Tools

PoliciesPolicies

Policies &Policies &Corporate RecordsCorporate Records

Standing toBring a Complaint

Note: Venue for breach of fiduciary duty claims brought by the OAG lies in Travis

County

Governance and the

• Form 1023• Form 990 and Form

990 Instructions• Final Regulations on

EBT• Position Paper• Work Plans• Compliance

Initiatives

Private InurementPrivate Inurement

Excess Benefit Transactions

EBT Compensation: Rebuttable Presumption of Reasonableness

Successful Successful ProgramsPrograms

Ethical Practice

Tax Complianc

e

Good Governance

Mixing the Right Mixing the Right IngredientsIngredients