California nonprofit operations question. Is it legal for a board member to conduct a business not related to the nonprofit he/she is involved in?

All boards, for profit and non-profit, have board members who work for, operate or even own other businesses. This is not a problem, unless the companies compete directly or do business with each other. There are ways to deal with such transactions. For example, an contract with a board member is presumed to be unfair to the company unless a majority of the board not including the conflicted member  approve the transaction. On the other hand, it is only presumed to be unfair, and that presumption can be disproved if the contract is in fact fair to the company. How do you prove that? Depends on the facts. The problems of conflicts is really the donor's problem, since he can be required to return any compensation his company receives back to the non-profit. It's in his best interests to guard against that. Donations are not a conflict. Contracts between the donor's other company or a company owned or run by any director, officer or employee and the non-profit could pose conflicts. Call me if any of those come up. Dana Sack 510-286-2200 ds@sackrosendin.com www.sackrosendin.com