Page 100 - 2024 Orientation Manual

Terms Every Nonprofit Board Member Should Know

Advertising - Any message or other programming material which is broadcast or otherwise
transmitted, published, displayed or distributed, and which promotes or markets any trade or
business, or any service, facility or product. Advertising income is subject to UBIT.

Actual Authority - Authority a reasonable person in an officer/board position would ordinarily
believe and expect to have been conferred upon him/her by the corporation. Actual authority may
be expressly granted in the bylaws, board resolutions, or agreement by the board to similar actions
in the past.

Apparent Authority - Authority that third parties reasonably believe an officer/board member may
exercise even though it may not have been actually granted. Acts committed with apparent authority
are ordinarily binding on the corporation.

Endorsement - A specific recommendation, actual or implied, that the organization has reviewed
and recommends a program or service.

Insurance Coverages
Auto/Hired Car - Covers instances where employees utilize their personal vehicles and/or
rental vehicles while traveling on association business.

Directors and Officers Liability Coverage - Covers wrongful intentional actions and
decisions of the Board.

Employee Dishonesty/Fidelity Bond - Covers loss from fraudulent or dishonest acts
committed by an employee whether acting alone or in collusion with others.

ERISA Bond - Covers loss from fraudulent or dishonest acts committed by an employee
while handling employee retirement funds.

General Liability Coverage - Typically the "core" coverage for nonprofits, it covers a
wide range of negligent acts which result in bodily injury, personal injury and property
damage to a third party.

Worker's Compensation - Covers instances where employees are injured in the normal
course of performing their job duties.

IRS 501(c)(6) - A tax-exempt trade or professional association, such as the LSBA, that provides
benefits and services to its members and is permitted to engage in lobbying activities.