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Contracts and retainers


Renee

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Hi All,

 

We are a New York not-for-profit club with about 300 members. The Board (10 in total) conducts business for the club and the Board does not allow the members in good standing to view contracts or the attorneys retainer. The Board clumps the fees for the contracts as one lump sum, not individually by contractor.

 

In our by-laws, it stipulates that we will follow Roberts Rules of Order when it is not in conflict with our own by-laws. 

 

Members petitioned for a special meeting and the special meeting was held. There was an item the membership (almost unanimously) wanted to take a vote on regarding the topic of the special meeting. At that time the Treasurer produced an email, who she claimed is the attorney retained by our club, as well as a good friend of hers.  (I won't address the question/ethics of the Board in contacting an attorney to prevent a vote they did not want and knew the membership wanted - but feel free to advise). The attorney's email did have his name, address and firm he was a partner at. This email stated that we cannot vote at the special meeting as per his interpretation of our by-laws. The membership did not agree with that interpretation of the by-laws. The membership was told there was no charge to the club for this legal advise, but that the attorneys email is legally binding on the membership.

 

The membership wanted to take a vote to suspend the rules and the attorneys email, but the Board told us we could not.

 

After the special meeting, a member gave a written request to see the attorney's retainer as well as the questions posed to the attorney in regard to the special meeting ruling. The members request was denied.

 

This person was told the board will respond to the written request when and if they deemed it necessary to do so.

 

I have never encountered this type of secrecy from a board in any of the not-for-profit organizations I have been a part of. I was of the impression (and I can be mistaken) that the board of a New York State not-for-profit club/organization represents the membership and acts on its behalf. I have tried looking on-line at NYS not-for-profit laws and IRS laws, but could not find the answer.

 

Is there anyone who can advise on how the membership can proceed to view these items or where the specific NYS not-for-profit or IRS laws can be found so that the membership can approach the board with the proper rules/laws as to their rights?

 

Thanking you in advance,

Renee

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RONR provides that any member may inspect the records of the Secretary.  See RONR pages 459-460.  In addition, state law may specify whether, and to what extent, members can inspect records of the corporation (if you are incorporated), but we cannot give legal advice in this forum.  IRS regulations might also  be relevant.  You will have to check out those angles for yourself.

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Is there anyone who can advise on how the membership can proceed to view these items or where the specific NYS not-for-profit or IRS laws can be found so that the membership can approach the board with the proper rules/laws as to their rights?

 

Sounds like the membership tried the "special meeting" route and were rebuffed - properly or improperly?  Nobody here can tell.

 

Perhaps draw up a carefully phrased brand new motion that insists on what you want and offer it in New Business at the next regular meeting.  It would become, I suspect, a "Standing Rule" if adopted.  Whether this works will depend, in part, on the exact phrasing of your bylaws, which specify the powers and authority of the Board vis a vis those of the membership.  See RONR p. 577 for some related wording(s).

 

As far as NY or IRS law goes, you will have to find legal help for those quests.

 

Failing all that, elect new board members next time around.

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I would suggest you contact the IRS and NYS Department of Revenue (or whatever they call the state's version of the iRS) and ask them to send you the regulations for your non-profit (you will have to do some research to figure out exactly what sort of non-profit the club is). 

Include the office of the Secretary of State in your quest for information.  (Your state's secretary of state.... not John Kerry's office!)

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