BOD spending association fees

We have a BOD member that sits on a board of a local fire department. Recently she made a motion to donate $200.00 from our association fees to the fire department. The motion was approved and the donation was made. It is my understanding that our association fees are specifically for "the upkeep and capital improvements of our community". My question is, is this legal for the BOD to use our fees for donating to charities?

Hey Mary, Thanks for your input! I have checked our CC&Rs and there is nothing that states how our fees are to be spent. However, in the NC HOA LAW it does state that association fees are for what I stated in my original question. I am presently checking with the AGs office to see if they have a representative that deals with HOA issues and concerns. Thanks again!

How about if the HOA gives $300 to a local church where they are getting a free room for their meetings. This is a charitable donation in lieu of a fee. Would you say this is not legal (given the same set of documents)?

Gary - ask what category line item the funds were taken from to make this "donation."

If your budget has a Community outreach/relations or a PR fund, then this would be appropriate.

While this amount is small, this gesture could be a slippery slope. Expect other charitable agencies to be pounding on the door.

Better that someone from the Association collect donations from members rather than taking it from association dues.

If she benefitted MONETARILY then it would be a conflict of interest.

Remember: the ENTIRE board approved this. You need to find out why and what category the money will be taken from.

Review the Mission of your HOA. Supporting community affairs and social interests of the community MAY be in your purpose statement.

Has anything like this been done before?

Good Morning everyone,

I just discovered this discussion forum last night, so this is my first post.

There are some excellent points regarding this donation. I wonder, is this a volunteer fire department? Not that it makes a difference from a legal standpoint but perhaps from an ethical standpoint it does. Similar to Mary's comment about the church
"Giving that church a "donation" is just the HOAs way of showing their appreciation for use of their meeting room"
maybe the Fire dept. donation is just the HOAs way of showing their appreciation for keeping the neighborhood safe?

Someone mentioned the slippery slope and I agree. If we make one donation then who else will expect the donation? Always a concern. Were the topic to arise at one of our meetings my suggestion would be that we donate to organization's that provide a direct benefit to our neighborhood with a dollar and frequency cap assigned for all.

I do not believe the current situation is a conflict of interest unless the individual board member profited directly from the donation. Since the entire board approved the donation I would certainly hope that at least one board member had the ethical and moral fortitude to determine if individual profit was a driver. As a board member in our HOA I know we scrutinize all spending as a Team to ensure the expenditure benefits the community whether a donation or purchase. Not that I recall any donations.

Someone mentioned inquiring the account this money came from. That is a simple question and a quick response would/should ensue. Another question for the board would be to ascertain their justification for the expenditure. I'd approach them directly, openly, and objectively, just you and board initially, if anything seems "off" with their responses you could involve more individuals.

Do you know what the money was used for at the local fire department?

I believe you are right to question this by the way.

not to get off topic but regarding the following statement Gary,

"And with the state of our economy we are having a hard time collecting our association dues as it is this year with approx. 25% outstanding."

To mitigate these risks in our own association we setup a quarterly assessment payment schedule for the HOA. The thought was that it is easier to pay 25% of the dues 4 times per year than to pay 50% twice or 100% once annually. HOs have the option to pay all or just 1/4 at one time. It works and many people have expressed their appreciation.

Mary, not to be a stickler, but what is a "community"? Could it be interpreted to be anything around you which might actually include things that are not part of the HOA? I don't think that was the intent, but you would have to agree that the definitions of some words are really ambiguous.

Mary, sorry, I missed a few words in your response.

I thought I would look up what my HOA CC&Rs say. Here it is -

"(a) discharging and performing the Association’s duties and
obligations under the Community Documents or applicable law; (b)
exercising the rights and powers granted to the Association by the
Community Documents or applicable law; (c) providing or promoting
activities and services the Board deems appropriate, necessary or
desirable to foster or promote the common good and general welfare of
the Project and the Owners, Lessees and Residents; (d) contracting
for services (including, without limitation, trash collection or
cable television) to be provided to Owners, Lessees and Residents;
and (e) taking such other action as the Board deems necessary,
appropriate or desirable for the management and administration of the
Association or the benefit of the Association or the Project."

Now, what do you think part c would include - community projects like charities? How about part e? This gets pretty hairy.

MaryA,

I agree this is a done deal but the board is not in place to "think" what is wrong or right. The board is to adhere to the covenants and as you said should be reminded of their responsibilities.

Larry,
What you say makes sense and what some of the others say, makes more sense, in view of the format the subject is being discussed. The conversation is all valid but the salient question is, should the BOD break the covenants to make this donation. I think if we agree they shouldn't, but really would like to, maybe it is best to get specific owners approval to stay above board. However, all of us posting here know, "if there is a will, there is a way." So, doesn't it seem rational to recognize this and at some point give up the argument, how ever you feel, and realize no matter what is posted, folks are going to pretty much do as the are driven.
I would imagine if I was looking for an answer to the question and read this posts I would conclude, if the motivation was weak, don't make the donation and wait for a better cause, if the motivation was strong, I would say, oh let's make the donation and cover it up. If the Bod was of a mind, they may even make it come hell or high water, and say sue me.
The covenants are just that and MUST be considered seriously by all associations. They may be hard to translate, and harder to enforce, and you will never always be right, but the demands of the contract with the associations is best met if they are fairly and wisely governed.

Mary,
I can understand why you draw this false impression. I don't think I explained myself very well. Maybe this will help. I don't see where we are far apart at all.

Try putting the documents aside for a second. We offer opinions of information we receive. We have certain convictions, as all people do. We have posted enough here to know that what we say is rightly filtered by other posters. I think some will be persuaded to act by other events going on in their associations and the "bent" of the Board. I can see them saying in a conversation about a "donation". "Yea, I know what the documents says but we as the Board are entitled to a little latitude and I think this is a worthy cause, so I am going to vote we spend the money."
And they do.

Now back to documents, you are right, we can take a leap and say you can't do this if your documents don't allow. Further, we can say, even if you want to change your documents, you must be sure you comply with and other laws and restrictions. We can suggest that maybe your documents won't allow you to do this under any circumstances.

But the deed is done, and will be done by someone else, with or without full knowledge of the documents. Now fortunately, we can not take action and correct the misdeed.
So, my bottom line is the same as yours. Don't violate the covenants and this question does not come up for vote. If the association wants to fix the problem, if they consider, it a problem, then the onus is on them.

No direct offense to anyone in particular on this thread, but I'm seeing a lot of "bloviating."

We "donated" about $100 to our local fire department last year.

The reason?

They provided all the equipment for our Chili Cookoff.

It's "free." But they do "accept donations."

All we had to do was determine a fair amount.

On the other hand, I can think of no earthly reason why a HOMEOWNERS ASSOCIATION would be "donating" money to a F.D. short of them providing some similar "free" service.

. . . my bloviation.

Michele,

I'd say you bloviate very well.

Bloviate. Bloviate. Bloviate.

Or as you say, "Splitting hairs."

I'm trying really hard to find where anyone is pretending that anything said above is "really legal" or using any "argument." I think we're all just providing "perspective."

Did you used to live in Indiana, by the way? Just curious.

Wow, did we really get off topic with this issue. Just to set everyone straight.....the fire department in question is not a "volunteer" FD. It is funded by the local tax payers. Having said that......they do accept donations for various things during each fiscal year as do most FDs. But what gives the right of the BOD to randomly act with the Associations funds to donate only because the BOD director brought it to motion because she sits on the board of the FD. These funds belong to the members of our association and the last time I checked the BOD is elected by the members to act in the best interest of ALL the members. In our CC&Rs, no where does it state that the BOD can make donations to charities or local services. It is designed for the upkeep and capital improvements of said community. Although a lot of good points have been discussed, I agree with I think it was Mary that the BOD is obligated to adhere to the gov docs when making a decision as to where they spend the Associations funds. It is obvious that there are a few BOD directors with personal agendas playing the role of trying to make a name for themselves in the local scene. The thing they sometimes forget is that they are dealing with the local towns monies, these funds are derived from the members dues. They should be spent with the best interest of the folks that contributed. And believe me, this particular fire station is not hurting by any means. Just to get back on topic, I guess the bottom line is that I feel that the BOD did not act in accordance with the gov. docs and should be accountable to their actions.

Gary,

I am in agreement with you. HOAS are NOT meant to fund charities or whatever the board wants. Assessments are to be for the betterment of the community. Period. What's next? Contribute to cancer, heart association, girl scouts, boy scouts, perhaps even political causes or whatever. I am not saying these are not good causes but it just goes to show where this could go. The board was WAY out of bounds and should be told in no uncertain terms that they are not to do this again with the MEMBERS' money.

Gary,

I agree; the board should be held accountable for their actions. But, what's done is done; they cannot take back the donation. But I do believe they should be put on notice that the members will not tolerate this type of irresponsibility in the future.