the individual owes a duty of loyalty to the nonprofit
I don’t think this is true. This is not what their board seat is for.
a conflict between Claire being involved in proposing a grant and in making a recommendation on whether to fund that grant
I don’t really think this either. I think suggesting that the org is worth supporting is her job. She doesn’t have a conflict of interest here, this is the job of a grantmaker, right?
The duties of a non-profit board member / trustee, including a duty of loyalty to the non-profit, are established by law. I’m not aware of any authority to create board seats whose occupants lack the most fundamental duty of a member / trustee. For example, the Charity Commission (UK) explains that a trustee must “do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes,” and that this duty is not about serving “the personal interests of supporters, funders or donors.”[1]
Thus, in their role as a trustee, the dual-hatted individual must act in the “charity’s best interests.” But in their role as a grantmaker, they owe a duty to their donor(s) to provide the best possible advice. I’d characterize a grantmaker’s job as neutrally evaluating all the grant proposals on their desk and recommending a funding allocation. This advice will not necessarily further the best interests of the charity on whose board the grantmaker sits.
So you have one person performing two different roles (an advocacy-like role and a comparative-evaluation role) on the same grant, each involving a duty of loyalty to a different entity (the organization on whose board the person sits, the donor who the person is advising). That’s a conflict to me, albeit often a waivable one by the donor.
Even on a for-profit board, board members have a fiduciary duty to all shareholders as a whole. A board member who is also a major investor is not exempt from that duty.
I don’t think this is true. This is not what their board seat is for.
I don’t really think this either. I think suggesting that the org is worth supporting is her job. She doesn’t have a conflict of interest here, this is the job of a grantmaker, right?
The duties of a non-profit board member / trustee, including a duty of loyalty to the non-profit, are established by law. I’m not aware of any authority to create board seats whose occupants lack the most fundamental duty of a member / trustee. For example, the Charity Commission (UK) explains that a trustee must “do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes,” and that this duty is not about serving “the personal interests of supporters, funders or donors.”[1]
Thus, in their role as a trustee, the dual-hatted individual must act in the “charity’s best interests.” But in their role as a grantmaker, they owe a duty to their donor(s) to provide the best possible advice. I’d characterize a grantmaker’s job as neutrally evaluating all the grant proposals on their desk and recommending a funding allocation. This advice will not necessarily further the best interests of the charity on whose board the grantmaker sits.
So you have one person performing two different roles (an advocacy-like role and a comparative-evaluation role) on the same grant, each involving a duty of loyalty to a different entity (the organization on whose board the person sits, the donor who the person is advising). That’s a conflict to me, albeit often a waivable one by the donor.
Even on a for-profit board, board members have a fiduciary duty to all shareholders as a whole. A board member who is also a major investor is not exempt from that duty.