Importance of Nonprofit Board Meeting Minutes
We get a lot of questions from our clients about their organizations’ meeting minutes. Our exemption specialists often give advice on questions like “When should we record meeting minutes?” and “Why are meeting minutes so important?” There is great importance in keeping proper meeting minutes because they are the only means the board has to provide proof of the decisions made in the board room.
What Are Meeting Minutes?
Minutes are defined as the written record of a meeting which typically describes the events of the meeting, as well as a list of attendees, and a description of the issues being discussed by those present. Organizations should either find or create a formatted template to be used for all meetings. The time, location, and a list of those present should be indicated in the minutes. Guests should be specifically indicated to show who does and does not have voting privileges. The content of the minutes does not have to be a transcript of the discussion, but the minutes should contain a summary of the discussion as well as decisions made by a vote of the board members.
When Should My Nonprofit Record Meeting Minutes?
Any time the board meets, meeting minutes should be taken. Even meetings having taken place via Skype, teleconference, or through any other electronic means should have documentation. If minutes are not recorded, it is as if the meeting did not take place because there is no concrete proof about what topics were discussed and what decisions were made.
Meeting minutes are typically taken by the organization’s secretary. If the Secretary is not present, another officer or director should be chosen to record the minutes. Meeting minutes also need to be signed by the individual who took the minutes at the conclusion of the board meeting. Once signed, the minutes become a legal binding copy. This copy should be maintained in corporate records. It is good practice to keep a hard copy along with an electronic copy. Minutes do not have to be filed with any agency, but copies of the minutes need to be available upon request.
Without meeting minutes, an organization does not have proof about the decisions made in the board room. Lack of meeting minutes would allow the IRS (and the general public) to question the organization’s compliance in following the organization’s bylaws, as well as board participation among following nonprofit law and compliance under IRC Section 501.
This Post Has 7 Comments
Is there a certain amount of time we must meet? Example if a meeting only last for 30min. Is that ok or are we suppose to meet for longer?
There’s no simple answer to that question, as the length of board meetings is completely due to the scope of the topics under discussion. It’s always a good idea to prepare for upcoming board meetings, and to produce a meeting agenda that can be distributed to all attendees ahead of time. It’s important that all topics are thoroughly discussed and considered, but an agenda can help keep the topics of discussion on track. Ultimately, board meetings should be long enough to allow for responsible consideration of the topics essential to the operation of your nonprofit organization.
re corporate law and IRS tax exemption statutes, our emerging organization starting off with no funds, was told we could sort of “piggyback” onto another nonprofit’s ID while maintaining each’s separate financial funds. Would that be permissive or is it illegal?
While there are ways to go about something like this, they are typically more complicated than it is worth, and both the existing entity and newly-formed run risks not often worth the reward. The better approach is progressing the new organization as donations allow. If you haven’t yet formalized the new organization, your next steps should be to incorporate with your state and seek 501(c)(3) status with the IRS. If you need assistance with this process, contact our team. We’ve helped thousands of organizations with this process.
This short exchange was interestingly funny.
Re Board Minutes
I think it is misleading to readers to suggest that all board actions need to be recorded in the minutes
Board’s can make adverse decisions out side of the board room and there is little or no accountability for these decisions. A bad board wants no proof of these decisions and readers need to know this. Board’s can also claim email communications serve as a discussion for decision with little or no accountability for things the board chooses to cut corners on by the IRS or anyone else.
This is the real world that readers need to know exists and the standard for minutes applies to functioning boards where there are probably no issues to be worried about.
To be honest, Tim, I’m not sure the point you’re trying to make. It is true that some boards of directors operate outside the bounds of best practice. Some of them practically make it up as they go! Circumstances like you describe are all too common. That’s a far cry, however, from your opening statement that it is misleading to suggest all board actions be recorded in minutes. It isn’t misleading…it’s absolutely necessary in order to remain in compliance with both corporate law and IRS tax exemption statutes. The point of the article is to inform our readers as to what is required of them, not necessarily what others do that is ill-advised. It’s a given that some organizations will throw caution to the wind and take their chances. Let’s make sure we’re clear, though, that the risk is not worth taking.
Comments are closed.