Staying on the Ethical Straight and Narrow

To avoid any perception of impropriety, Schmidt says organizations and their board members can engage in arm’s length transactions, where the business is conducted as if the two parties were unrelated. Profiting from a nonprofit is, under both state and federal laws, absolutely unethical, but a board member can do business with a nonprofit as long as he or she doesn’t make more money through that relationship than if the two parties did not know each other and were negotiating a fair market price.