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Nonprofit Law/Presidents authority


Can a president hold the foundations checkbook and right the checks? They are a signer and have recently added the treasurers signature. Checks have been written without the board knowing and they seem to be okay with the president handling it.
They have said that when funds come in it's the presidents ultimate decision how it gets disperse? (seems more like how a for profit runs)
I thought the board needed to decide how things get paid and it was the responsibility of the treasurer to issue checks and monitor our funds? Seems like a red flag for future grant requests and audits?

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. Your matter is controlled by state law and states may differ somewhat with how they would treat such issues. Even though this forum is not for such state law issues, I will try to give you some information that may help you.

I am assuming that you are referring to a California Nonprofit Public Benefit Corporation.  starting at section 5002 is the California Nonprofit Corporation's law and starting at 5110 is the law for Nonprofit Public Benefit Corporations.  

Specifically see section 5210 which provides:
--- Start of excerpt ---
ubject to
the provisions of this part and any limitations in the articles or
bylaws relating to action required to be approved by the members
(Section 5034), or by a majority of all members (Section 5033), the
activities and affairs of a corporation shall be conducted and all
corporate powers shall be exercised by or under the direction of the
board. The board may delegate the management of the activities of the
corporation to any person or persons, management company, or
committee however composed, provided that the activities and affairs
of the corporation shall be managed and all corporate powers shall be
exercised under the ultimate direction of the board.
--- End of excerpt ---

Section 5213 provides:
--- Start of excerpt ---
The president, or if there is no president the chair of the board, is the general manager and chief
executive officer of the corporation, unless otherwise provided in the articles or bylaws.
--- End of excerpt ---

Generally, unless the Board restricts the President from spending anything above a certain amount, the President would have authority to spend money and enter into contracts for purchase of goods or services. Professor Stephen Bainbridge has posted something from his now out
of print book Corporation Law and Economics
--- Start of Excerpt ---
...Most of the case law on the apparent authority of corporate
officers relates to the powers of presidents. Corporate presidents
are regarded as general agents of the corporation vested with
considerable managerial powers.
--- End of Excerpt --- (see footnote 11 for examples with court citations)

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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