Affiliation means the close involvement with a vendor, consultant, or grantee on the part of (a) a director of the Charity, (b) a staff member of the Charity, or (c) the spouse or equivalent, parents, or children of a director or staff member, within twelve months preceding the decision.Affiliation includes, but is not limited to, serving as a board member, employee, or consultant to the grantee, consultant, or vendor or doing business with the grantee, consultant or vendor. A staff member who is affiliated with a prospective vendor,consultant, or grantee shall abstain from participating in any decision involving that vendor, consultant, or grantee.The law that governs California nonprofit public benefit corporations is the California Nonprofit Public Benefit Corporation Law (the “Law”), which appears in Sections 5110 et seq. Normally, nonprofit public benefit corporations seek tax exemption under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code (the “Code”).
Eleven years later, the California Supreme Court took the next step in expanding the charitable trust doctrine when it dropped the requirement that donee representations be written and formal and accepted them as equivalent to express donor restrictions even where they were oral and informal. College of Osteopathic Physicians and Surgeons, 61 Cal. In its statement to the Franchise Tax Board, it stated that it was in the “business of running a hospital.” Similar statements were made to the Internal Revenue Service and Los Angeles county tax authorities.
Thus, a college of osteopathic medicine could not change to become a college of allopathic medicine when it had “held out to the public” that it was a college of osteopathic medicine and “solicited and received donations for use in teaching . Funds were solicited from the public for the hospital or hospital purposes.
Perceived or actual conflicts of interest, as reported in the press, whether accurate or not, can often do great damage to the reputation of a charity.
Damage to reputation can affect the ability of a charity to fundraise and obtain grants, which can obviously impact the fiscal health of the charity.
However, an otherwise imprudent investment is allowed if it is either authorized or required by “an instrument or agreement pursuant to which the assets were contributed to the corporation.”Directors will also want to have a general familiarity with the rules set forth in the Uniform Management of Institutional Funds Act (Probate Code Sections 18500 et. The duty of loyalty is fundamentally about putting the interests of the corporation before the director’s own interests.