Legislative Update: Mandatory Board Training

Most nonprofits agree that training for its board members is advisable and beneficial. In New Hampshire, the Senate believes it should be mandatory. On January 18, the New Hampshire Senate passed a bill requiring at least one member of each nonprofit board (from organizations that receive a total of $250,000 of government funding) to attend four hours of third-party training every other year to include "instruction on fiduciary responsibilities, financial controls, relative responsibility and authority of boards of directors and corporation employees, ethics and federal and state laws and regulations governing nonprofit corporations," according to the New Hampshire Business Review.

The original bill proposed in 2011 required government-funded nonprofits to send all board members, as well as the CEO and CFO of their organization, to attend the training with the penalty for noncompliance to be ineligibility for public funding for two years or $5,000 fines for each instance. However, pushback from the state's nonprofits led to the amended version passed on January 18. In the current legislation, penalties for noncompliance have not yet been established.

Rick Cohen of the Nonprofit Quarterly offered a response to the issue in a recent article, asserting that "there are compelling reasons to oppose such legislation," such as "the burden on small nonprofits that don't have the resources to pay for third-party training programs" and questioning why nonprofit leadership was required to receive training, but the leadership of for-profits were not.

Senator Bob O'Dell, a sponsor of the New Hampshire bill, explained his reasoning for standing behind the legislation: "we are talking about organizations that are willing to take money from the state of New Hampshire. I think they ought to be willing to have one of their board members go for a couple of hours of training every couple of years." 

To read more on this debate, click on the links above to view the two articles.