Conflict of Interest: Paid teachers as board members in a homeschool group
A homeschool leader is concerned about a conflict of interest if she wants to be a board member and paid teacher.
Jessica, who wants to start a homeschool co-op emailed HomeschoolCPA Carol Topp this situation:
“I have a question about the conflict of interest issue. Three ladies and I would like to incorporate to teach classes together and form a co-op. If we are the three board members, then does that mean we cannot profit by also teaching? Do you have any article that clarifies that?”
Listen as Carol explains:
- The conflict of interest between being on the board and being paid by a nonprofit
- Inurement and self-dealing
- Why it is not a good practice for nonprofit to have paid staff also serve as board members.
- Three options Jessica has:
- Form a 3-way partnership (a for-profit business)
- Have a separate, independent board that hires teachers as staff
- Grow the board so the majority is not paid teachers
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How much will it cost?
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Thank you! You answered a question our group has been trying to answer competently and legally!
Thanks so much for this podcast. Brand new to your site, and it is an answer to prayer.
Wanted to just clarify on the topic of paid board members. The way we are setting up our coop involves providing a discount in cost to members who volunteer each week; so is that considered “being paid” and therefore making a conflict for board members. There is no discount or financial incentive to being a board member, but some of these board members would also be volunteers at the co-op, and therefore receive a reduced price on the classes.