Payment of Board Members of Nonprofit Organizations

www.nonprofitlawyer.co.za
Should Board Members of Nonprofit Organizations get paid for service on the Board?
This video considers some of the legal and governance issues.

[@lynnezurnamer]

What a super way to keep us informed. I am so thankful. This type of information is so necessary but often very expensive in terms of legal fees to access. Thank you.

[@mandisasinuka3478]

This is very informative and all NPO s should associate themselves with such videos to make informed decisions.

[@missbenjamin3610]

This is what I needed to hear. Thank you Ricardo. Prosperous 2023 to you.

[@TheNPOLawyer]

Thank you Miss Benjamin for your kind message. May you also have a prosperous 2023.

[@SpiritualLivingPlatform]

Dear Ricardo, you are really a God sent in terms of assisting many of us to do things the right way. Many thanks brother. However, I am busy starting up an NGO and would like to register it on line, so where do I proceed with the payment to register my NGO?? When I followed your other clip you did not touch the paying of registration fees. Thanks

[@mtcleroux]

So helpful! Thank you for providing this channel and the informed views.

[@TheNPOLawyer]

Thank you!

[@davidprentice8108]

Thank you sir! Puts the issue into context wonderfully.

[@TheNPOLawyer]

Thank you David.

[@Crabtree1844]

Mr. Wyngaardt, thank you for this valuable information. Well articulated and presented.

[@TheNPOLawyer]

Thank you kindly.

[@Crabtree1844]

Ricardo Wyngaard you are very welcome.

[@zolanintliziyombi7757]

Thanks to you Sir♥️👏👏👏

[@TheNPOLawyer]

Thank you Zolani

[@henryspencer3666]

As mentioned in the commencement of this presentation, payment of Board Members is a grey area... and whilst I agree with the presenter in general temrs, one has to view the topic in context i.e...
In South Africa there are many previously disdvantaged Board Members, who could not afford to attend unless for example, their transport costs were met... And then there is the fact that in the world generally there are fewer and fewer volunteers! Today, increasing globalisation and the frenetically faster pace at which people operate, allows them little time to spend on voluntary pursuits. So ...
Perhaps the adage any volunteer is better than no volunteer - holds true.I am paid for services that I render to one org, on which I also serve as a committee member. BUT... I charge fees which are only a fraction of what a normal consultant would charge, and even limit the gross amount charged each month (I for example charge 25% of a normally consultancy fee!) .... So my view is that providing that the following guidelines are adhered to, payment of some Board members is acceptable; these guidelines are as follows:
1. Payment should not be made, merely on the basis of the recipient being a Board Member.
2. Where Board Members have been co-opted/recruited for specific/specialist skills... then some form of reimbursement is accepable!
3. Such re-imbursement should be at a substantially discounted rate - this to ensure that their involvement in the org. is motivated by the heart, rather than solely by the purse.
3. Board Members who cannot afford attendant costs; such as for example travelling costs, should be paid for these costs.
4. Fee earning Board Members must recluse themselves from any discussions which could impact on them personally or the role that they play in the organisation ... for example the income that they glean from the organisation; or even their continuing role as a fee earning Board Member.
The topic of Board Members themselves is extremely interesting. In 1998 I completed a Masters Thesis (cum laude) through Stellenbosch, on the ethics of Non-profit Board Membership ... and sadly for many, it is motivated by status and ego - some serving on 7 or 8 different Boards, for others it is a social gathering of friends; where cronies are invited to join (knowing that they won't rock the boat).. I have on various occassions remarked that I believe that Non-profit organisations survive despite - not because of their Boards of Management. (And I continue to hold that view!)
In considering ethical issues... we focus too much on legality and insufficiently on morality. legality specifies what individuals can get away with... whereas morality stipulates what none of us should try to get away with. We all know know what is reasonable and acceptable (what is right!) in respect of payment of Board Members... It is a pity that our consciences are not trustworthy enough to allow us to abide by them?

[@TheNPOLawyer]

Thanks Henry for adding to the debate. I agree that remuneration is different as reimbursement. I do however interpret payment for services rendered (specialist skills) as remuneration - not reimbursement, except where the person has incurred specific expenses. My view on this issue is actually taking the law, context and governance into account. If I had to reach a conclusion based upon legalities only - then there is no problem with paying board members. One of the potential consequences if payment of NPO board members becomes a norm is that those organisations that can afford to pay will most likely find it easier to attract board members. What should be a value-driven process can quickly turn into a money-driven process. The Life Esidimeni tragedy is a striking example where, the Health Ombud's report concluded that: "The NGOs were lured into what appeared as a business opportunity not to be missed and as such received patients knowing that they neither had capacity, expertise nor the requisite infrastructure to care for mentally ill patients."

[@TRUTHSA-]

Thank you so much for this discussion to all the contributors as well. God's Speed.🙏

[@beaglebnbvideos8265]

Very informative. Thank you

[@TheNPOLawyer]

+Beagle BnB Videos Thank you.

[@karenmaramoss3393]

Thanks for the video, very informative

[@TheNPOLawyer]

Thanks for your feedback Karen, much appreciated.

[@TheNPOLawyer]

Thank you!

[@nerok-nect]

Very Informative and helpful

[@TheNPOLawyer]

Thanks Kurt.

[@Synchronicityrsa]

Thank you for a most informative video, Mr Wyngaardt! Presently in the process of drafting a constitution for a NPO (community radio station). Is already registered as a NPC. We do not intend paying board members (NPC directors) for board duties, but do intend using the services of some for running the station (station manager, presenter, etc). Constitution provides we can employ staff (as running the station is the sole PB / NPO object of the NPC). Is there any statutory or code prohibition on directors also being paid employees? In my view this falls under 'reasonable compensation for services rendered' provision. Do you have any thoughts or advice? If you do not feel the comments section is appropriate you may, if you would be so kind, email me at synchronicityDOTrsaATgmailDOTcom. Once again, thank you for the useful resources here and on your website. Warm regards. Riaan

[@VusileMagagula]

Keep me posted.

[@rae6369]

Thank you for sharing your video. I definitely agree with you why board members shouldn't get paid, do you think board members getting an attendance fee as you mention a conflict as well? Or do you think that's reasonble.
And also! If it's okay to give board members the attendance fee, do they decide how much that fee will be since there are the board members or is that just a fee from the organizatio.

[@TheNPOLawyer]

Hi Tia, an attendance fee would amount to payment in my view. As stated in the video, it is not against SA to pay board members, but it is not something I would recommend.

[@rae6369]

Thank you

[@gracedavhana7971]

Ri a livhuwa ndivho heyi ine ya ita uri dzangano li aluwe nga u divha zwine zwa tea u itwa kha u kunga mirado ya board.

[@zanderkotze6551]

Hi there , can staff members of an NGO also serve as board members ?

[@TheNPOLawyer]

Hi Zander, the law does not prevent a staff member from serving on the board.