With many governmental authorities expanding restrictions on group gatherings and issuing “stay at home” orders, FLB has provided answers (below) to some of the important questions that many individuals involved with Pennsylvania nonprofit corporations may have. We will continue to update our online postings and offer general advice on recurrent issues as they arise:
What happens if we have an annual meeting that is required to take place during the pandemic?
The performance of formalities such as annual meetings are generally governed by the nonprofit corporation’s specific bylaws. These bylaws usually specify that an annual meeting must be held to manage the nonprofit corporation’s annual activities, finalize the budget, elect the Board of Directors, and conduct other general governance matters. The Pennsylvania Nonprofit Corporation Law of 1988, specifically 15 Pa.C.S.A. § 5509, permits any nonprofit corporation to adopt emergency bylaws during an emergency event. An emergency event may include a catastrophe in which a quorum of the board cannot readily assemble. As part of its emergency powers, a nonprofit corporation may appropriately modify its meeting, quorum and notice procedures.
What happens if a Board member acts in violation of an emergency bylaw?
Generally, absent willful misconduct, a Board member will not be deemed personally liable for adhering to its emergency bylaws or for any action taken during an emergency if such action is conducted in good faith and in furtherance of the ordinary business affairs of the nonprofit corporation. It is also worth mentioning that the regular bylaws of the nonprofit corporation will remain intact unless it directly conflicts with an emergency bylaw.
These are highly fact-specific considerations that should be considered and implemented in consultation with professional management and legal counsel. In light of current events, the attorneys here at FLB are ready to assist your nonprofit corporation in crafting precise and effective emergency bylaws or procedures.
Can Boards hold conference calls or video conferences during the pandemic rather than face-to-face meetings?
Yes, a Board may hold conference calls or video conferences during the pandemic rather than face-to-face. As of March 16, 2020, the Center for Disease Control (the “CDC”) recommended that social gatherings of 10 people or more be cancelled or held virtually and other governmental mandates may restrict gatherings. The CDC, along with other federal, state and local government institutions, are working hard to educate the public in preventing the further spread of COVID-19. Your Pennsylvania nonprofit corporation should be no different.
It’s not too late to act:
Even if your nonprofit corporation does not currently have an emergency plan and/or bylaws, it is not too late to develop one. Even in these current times, it is better to discuss and create a plan to address the COVID-19 problem rather than do nothing. Further, remaining consistent and communicating the plan will help you and the nonprofit corporation’s members, board members, volunteers and beneficiaries maintain vigilance in these trying times.
The attorneys at FLB can discuss your rights and options regarding enacting an emergency plan/bylaws and assist while remaining compliant with Pennsylvania nonprofit corporation law during this ongoing pandemic. Please contact us using the form below, or give us a call at 610-797-9000. We wish you well during these extraordinary times.