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    DannyBearMN's Avatar
    DannyBearMN Posts: 3, Reputation: 1
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    #1

    Oct 10, 2013, 10:06 AM
    Can a non profit spend money to benefit board members, i.e. meals, retreats?
    I'm on the board of a very small non-profit and they sometimes spend money on lunch during meetings, weekend retreats with massage therapists, food, rented cars, etc. There is also money spent on gifts for non board members, flowers for a funeral of a friend of the organization, etc. I don't approve but I've been shut down by the board. Maybe illegal but to me it's also immoral.
    ebaines's Avatar
    ebaines Posts: 12,132, Reputation: 1307
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    #2

    Oct 10, 2013, 11:17 AM
    Not illegal at all, as long as the spend is related to board business. It is quite common for lunch, refreshments, etc to be provided at board meetings. If the meeting is at a hotel or conference center the organization would cover exoenses of the meeting room, projector etc. However massage therapy seems like a bit of a stretch - spending money on outside services is not unusual, but should be tied in some way to furthering the business of the organization. For example the organization mught hire a consultant to do team building exercises for the board. I don't understand the idea of paying for rental cars - the cost of transportation by board members to get to meetings should be covered by the board member and is then a deductible charitable expense. Nothing wrong with sending flowers as condolences.

    None of this seems immoral to me at all, but I would suggest that the board should have an open discussion regarding poilicies for perks not directly related to board meetings, like massages. It should also be clear to board members that there is an expectation that the magnitude of their financial contribution to the organization each year should factor in the cost of meetings and associated perks.
    joypulv's Avatar
    joypulv Posts: 21,593, Reputation: 2941
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    #3

    Oct 10, 2013, 11:54 AM
    I some ways it's all part of PR, and PR is part of fund raising, especially if board members are rich, influential, and have rich friends. It's why so many fund raisers are elegant and extravagant - spend more to make more. I don't like it either, but accept it. Give a good look to the funds raised vs the amount spent on such frivolous items.

    And you have to coddle many board members, who aren't being paid, and may be on several boards, and the meetings are usually boring to say the least.

    Now there is also the overall spending of the non-profit, and how many 'direct dollars' to the actual cause there are relative to income. That's really the most important number. Leather office chairs? Bloated salaries? Does your n.p.'s spending seem reasonable?
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #4

    Oct 10, 2013, 05:35 PM
    What do the by-laws say about it?

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