Maximizing Legal Protections for Directors of Nonprofit Corporations: A Timely Topic in Today’s Dangerous World


Much like their counterparts on the boards of public companies, board members of many nonprofit corporations increasingly, and quite understandably, are raising questions concerning their potential personal liability and the steps that may be taken to maximize their protection against such liability. The impetus for these questions is not difficult to discern and includes, among other things:

- the assertion of claims against board members of health care institutions;

- the publicity concerning financially-related problems at a variety of reputable nonprofit and charitable organizations;

- bankruptcies of nonprofit organizations which bankruptcies can and sometimes do lead to claims against directors;

- the creativity of plaintiffs’ lawyers in seeking to hold board members personally accountable for losses arising out of financial problems of the organization and the misconduct of insiders. The fact that a director of a nonprofit organization was well-intentioned may no longer dissuade such lawyers from asserting claims;

- increasing scrutiny by state attorney generals that are empowered to oversee nonprofit organizations; and

- the increasing use of financing, e.g., bond offerings, that can give rise to securities claims similar to those asserted against public company directors.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© K&L Gates LLP | Attorney Advertising

Written by:


K&L Gates LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.