What are the basic fiduciary duties of a foundation board member?
Foundations can be organized either as trusts or corporations, and the fiduciary standards for governing members of trusts and corporations have developed somewhat separately under state law. Essentially, however, a board member of a foundation owes two fiduciary duties to the foundation: a duty of loyalty and a duty of care. A third duty is sometimes mentioned, the duty of obedience. The Duty of Loyalty requires the board member, when making a decision or acting on behalf of the foundation, to set aside personal or conflicting interests and act solely in the best interest of the foundation. The Duty of Care requires a board member to devote the time, attention and resources necessary to understand and prudently oversee the affairs of the foundation. The Duty of Obedience requires the board member to obey all laws pertaining to the foundation and act in furtherance of the foundation’s charitable purposes.
