I found a law school exam blue book among my papers recently. It was for the final exam in Non-Profit Law and Management 102. I should have gotten an A.
Question 1 (20 points): Identify the legal issues presented by the facts.
Answer to Question 1: There is no time to enumerate all the legal issues. This non-profit organization with a volunteer board has too many serious problems to waste time on paperwork. See my answer to Question 2 below.
Answer to Question 2: For godsakes! Quickly hire an attorney experienced in non-profit governance. Make sure the attorney has plenty of gray hair and ample gravitas. Then call a special meeting of the board for a presentation from your new attorney. He or she should give a forceful lecture about the legal duties of directors of non-profits, preferably with legal horror stories that will scare the board into realizing their volunteer positions come with serious responsibilities. Ask for resignations from those unwilling to accept those responsibilities. Call for another vote on the executive director's contract. Pay the lawyer without asking for a non-profit discount.