Legal Responsibilities for Club Leaders
Club leaders and Board of Directors have a duty to ensure the organization functions within a framework that supports the organization's mission.
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Understand Your Governing Documents
All board members should have access to theĀ following governing documents for the organization they serve:
- The Bylaws: These are the rules and framework that define your governing structure.Ā Ā They outline membership requirements, board duties, election procedures, and much more. If the bylaws for the organization are over a decade old and seem to be missing guidance items, it may be time to update them.
- Conflict of Interest Policy: All nonprofit running clubs are encouraged to adopt a Conflict of Interest policy with an accompanying disclosure requirement. Members in the RRCA group exemption with the IRS are required to adopt a conflict of interest policy. The most important part of having a conflict of interst policy has requiring board members submit conflict disclosure forms annually.
- Articles of Incorpration: While RRCA does not require incorporation, we highly recommend incorporating your club in your state. Generally, incorporated organizations must adopt governing procedures including by-laws, hold regular meetings, maintain minutes, and keep the state informed of changes in board officers.
Understand the Three Main Duties for Board Members
The board of directors of a nonprofit has three primary legal duties known as the duty of care, duty of loyalty, and duty of obedience.
- Duty of Care: Board members should ensure they are attending board meetings, coming prepared, asking questions, using independent judgment when voting for actions that impact the organization.
- Duty of Loyalty: Make decisions that are in the best interest of the organization; not in the best interest of the individual board member or another organization they may be associated with. Disclose conflicts of interest and avoid the use of organization's assets for personal gain.
- Duty of Obedience: Comply with applicable laws, follow the bylaws of the organization, and be guardians of the mission and purpose of the organzation.
Understand Legal Responsibilities for an Organization
The board of directors of an organization have a duty to ensure the legal responsibilities for an organization are carried out. This is know as fiduciary duty, and includes:
- Legal compliance: Adhere to local, state and federal laws pertaining the operation of a nonprofit organization. Keeping records of lobbying activities and expenditures, but remember a nonprofit organization cannot engage in candidate endorsements for public office.
- File reports: File timely and accurate reports to local, state, and federal governments as required. For example, IRS form 990, state sales tax, state corporation commission annual reports, etc.
- Charity registraton: Register with the appropriate state agencies before launching fundraising campaigns. See more about charity registration >>
- Maintain Minutes of Meetings: Important decisions made by the Board should be approved in the form of a motion or official resolution and recorded in the minutes. Only official decisions recorded in the minutes are binding for an organization. Make minutes public for members.
- Issue an annual report to members: The care of an organization is entrusted to the Board by its members. The Board should issue an annual report for members which includes financial statements.
- Conduct an annual audit: Depending on the gross revenue, some states outline when an independent audit must occur. For organizations earning over $500,000 - $750,000, an audit may be required.
- Approve policies and procedures in support of the Bylaws: Adopt the RRCA's recommended policies to protect the integrity of the club. If the organization has paid staff, protect them from harm and ensure OSHA compliance. Maintaining personnel policies that include a grievance policy.
- Have signed contracts: Ensure well-written contracts with independent contractors that outline clear deliverables, clear payment terms, and clear ownership of works for hire by the club.
- File Trademarks: Ensure appropriate trademarks are filed and maintained to protect the brand and identify of the club. That said, keep in mind general use terms such as Road Runners, Roadrunners, Striders, etc are commonly used names for running clubs.
- Address complaints: Respond in a timely manner to complaints filed by members. Take legal threats seriously, but no action is needed until a lawsuit is filed. If a lawsuit is filed, the insurance company will appoint counsel for the club and manage the lawsuit.