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    louise0306's Avatar
    louise0306 Posts: 1, Reputation: 1
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    #1

    Jun 21, 2010, 07:18 AM
    Can a board member of a 501(c) get contracts with the 501(c)?
    We have a board member that has a current contract with the 501(c) that he sits on the board for. Is this legal, ethical, allowed?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    Jun 21, 2010, 08:21 AM

    The ethics depends on the circumstance, and yes, it is generally legal. However, a well-run charity will have a written policy in their by-laws about this. It should state that board members serve first for the interest of the organization, that they do not receive renumeration for their service (with the exception of any employee ex-officio members ), and that potential conflicts of interest should be avoided. At the very least the contract between the board member and the organization should be reviewed and voted on by the full board.
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