Fiduciary duties of board members and senior managers of nonprofit organizations go far beyond dealing with personnel, by-law issues, or making strategic decisions for the organization. As investment stewards of their nonprofit organizations, they also are responsible for managing investment decisions. The responsibility to manage investment decisions is something that many nonprofit leaders are unaware of and thus, expose themselves to an unnecessary fiduciary risk.
In this video, Vitaly talks about three fundamental fiduciary duties that nonprofit board members and senior management owe, in addition to many other things, to their beneficiaries and donors. These three fundamental fiduciary duties include:
Duty of care
Duty of loyalty
Duty of obedience
These fiduciary duties have stood the test of time and are established in common law through the Uniform Prudent Management of Institutional Funds Act (UPMIFA) and the Uniform Prudent Investor Act (UPIA). More important is that these fundamental fiduciary duties create the foundation for the Fiduciary Standard - a much higher standard than a legal standard alone. If you, as the fiduciary of your nonprofit organization, hold yourself to the Fiduciary Standard and adapt fiduciary best practices, you will be able to significantly minimize your fiduciary risk, maximize the return on donated and accumulated financial assets, and, as a result, achieve the mission of your organization.
If you have any questions, please feel free to schedule a free call.