Can a Nonprofit Organization Require Board Members to Donate?

The simple answer is yes it can (and many do), but perhaps the bigger question is whether an organization really wants (or needs) to impose such a mandate?  It is legally permissible for a nonprofit organization to require its directors to make an annual cash contribution to the organization as a condition to joining the board of directors.  Some believe this is a great idea because, as leaders of the organization, board members should demonstrate their commitment to the organization and its charitable mission.  For some organizations, these mandatory contributions are a vital part of the organization’s budget.  Others disagree and suggest that imposing such a requirement or expectation on board members is a bad idea because it will deter otherwise qualified candidates from volunteering to serve.  This can also lead to a negative public perception of the organization as being elitist or discriminatory.

Requiring an annual financial contribution (especially a substantial one) can skew the composition of the board of directors and, thus, the nature of the organization itself.  In today’s world where the public is placing greater emphasis on diversity, equity, and inclusion, nonprofit organizations would be wise to consider that economic status is itself a form of diversity that may play an important role for the organization. Requiring a substantial annual contribution will likely reduce the universe of potential board candidates who are willing and able serve.  Query whether such a policy makes sense for your nonprofit when all relevant factors are taken into consideration.