I’m often asked whether and how a nonprofit corporation should report to its members. There are various ways in which a nonprofit corporation can report to its members. I’ve included some of these methods here:
- By personal delivery;
- By mail or other written communication, addressed to the member at the address on the corporation’s books or the address the member has given to the corporation for notice purposes;
- By electronic transmission by the corporation;
- By including the report in a public benefit’s news letter, magazine or other publication regularly send to members, addressed and mailed or delivered to each member;
- By mail or other written communication, addressed to the member at the corporation’s principal office; or,
- By publication in a newspaper of general circulation in the same county as the corporation’s principal office.
It is also important for a nonprofit to know that on a member’s request, a public benefit or mutual benefit corporation must send the member a copy of any periodic report on assets held in a charitable trust filed with the Registrar of Charitable Trusts.
Certain public benefit corporations and trusts, which, among other things, have annual revenue in excess of two million dollars, exclusive of grants or contracts for services with governmental entities, are subject to additional reporting requirements under the California Nonprofit Integrity Act.
A religious corporation typically is not required to report to its directors unless such reporting is expressly required by its bylaws. However, each director of a religious corporation has the right at any reasonable time to inspect and copy all books, records and documents of every kind, and to inspect the physical properties of the corporation, for any purpose reasonably related to that person’s interests as a director.
Reporting to a nonprofit’s members is an important responsibility of the nonprofit’s board of directors. Directors should therefore be aware and vigilant of this responsibility.