Q: What are the guidelines for selecting the board members of my charity organization? Are there any laws regarding who is eligible to fill such a position?
A: A charity generally requires a board of at least 3 individuals who are not related to each other, who will not receive any form of payment for their services to the charity (there are exceptions to these rules, which are beyond the scope of this Q&A).
- If the group will be incorporating, these individuals will be the first directors.
- If the organization will become an unincorporated charitable trust, then the board members are called trustees and not directors.
It is generally considered to be an honor to be a board member of a charity. But along with such a privilege come important responsibilities and potential liabilities! A board member should bear in mind that:
- Board members, officers, and members of the organization do NOT beneficially own the charity.
- Individuals who fill the above mentioned positions do not have any right of ownership to any particular asset of the charity.
- The charity may not be operated for pecuniary gain of its members, board, members or officers.
The following is a sample of qualities that would disqualify an individual from eligibility for the position of director, trustee, officer or any similar position of a charity:
- A person with an unpardoned criminal record for an offence related to financial dishonesty.
- A person who has controlled or managed a registered charity, in any capacity, during which time the person engaged in conduct which seriously breached the requirements of registration, resulting in the revocation of the charity’s registration within the preceding five years.
- A person who was a promoter of a tax shelter, for which a charity’s registration was revoked within the previous five years.
Keep in mind that such offences are not required to have been committed in Canada in order to disqualify an individual from eligibility. Every charity is required to search for any evidence that would disqualify potential candidates for said positions.