Fiduciary Best Practices for Nonprofit Boards

This guide outlines fiduciary best practices for nonprofit boards, emphasizing the legal and ethical responsibilities of board members. It details the fiduciary obligations that include the duty of care, duty of loyalty, and duty of obedience. The duty of care mandates that board members act with the same diligence as a prudent person, ensuring they are knowledgeable about the organization’s mission and actively participating in meetings. The duty of loyalty requires members to prioritize the nonprofit's interests over personal gains and disclose any conflicts of interest. The duty of obedience ensures compliance with laws and regulations while aligning activities with the nonprofit's mission. Additionally, the guide discusses investment management responsibilities under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which provides standards for managing charitable assets. It emphasizes the importance of prudent decision-making in investment management, including diversification and cost management, and presents a checklist for boards to follow in fulfilling their fiduciary duties.