Nonprofit Director Conflict Transaction Approval Rules in New Hampshire
At a glance
| Governing act and covered transactions | RSA 7:19-a covers charitable-trust transactions involving a director, officer, or trustee; charitable organizations may be included (§§ 7:19-a(I), 7:21(II)) |
|---|---|
| Interest and related-person trigger | Direct/indirect financial interest over $500 annual aggregate; indirect interest includes specified family-linked proprietor, partner, employee, or officer (§ 7:19-a(I)(a)–(c)) |
| Disclosure and knowledge | Full, fair material-transaction disclosure to board, followed by notice and full board discussion; minute record required (§ 7:19-a(II)(b)(1), (3)) |
| Board or committee approval | At least two thirds of all disinterested governing-board members, meeting or exceeding bylaw quorum; best interest, ordinary-course value, and fairness also required (§ 7:19-a(II)(a)–(b)) |
| Member approval and vote | The statute requires the governing-board vote as one of its cumulative conditions (§ 7:19-a(II)(b)) |
| Fairness route and time | Fairness and actual, reasonable, or discounted value in ordinary-course goods/services are cumulative conditions, not an independent approval route (§ 7:19-a(II)(a)) |
| Interested participation and quorum | Interested or same-fiscal-year prior-benefit fiduciary absent from discussion/vote except to answer board questions; disinterested vote must satisfy bylaw quorum (§ 7:19-a(II)(b)(2)) |
| Burden, effect, and separate authorization | Violating transaction voidable; director of charitable trusts may enforce, and governing-board members may seek a voidness declaration (§ 7:19-a(VII)–(VIII)) |
| Special coverage and later changes | Private foundations excluded; religious organizations outside subdivision; $5,000 aggregate triggers advance newspaper and director notice; covered real estate needs prior probate-court approval (§§ 7:19(I), 7:19-a(I)(d), (II)(d), (VI)) |
Requirements one by one
Covered transactions and cumulative approval
Section 7:21(II) includes a qualifying charitable organization within the charitable-trust definition, even when organized as a corporation. Section 7:19-a(I) measures a fiduciary's financial interest above $500 in an annual aggregate and reaches specified family-linked interests. The exclusions include reasonable executive-director compensation, qualifying public-program benefits, and a transaction predating the fiduciary's service.
Section 7:19-a(II) prohibits a covered transaction unless it is in the charitable trust's best interest and meets all listed conditions. Goods or services must be in the ordinary course, at actual, reasonable, or discounted value, and fair to the trust. At least two thirds of all disinterested board members must vote yes; that number must also satisfy any bylaw quorum. Material transaction facts must be fully and fairly disclosed, followed by notice and full board discussion, with the action recorded in minutes.
What trips people up
An interested fiduciary, or one who had a pecuniary benefit transaction in the same fiscal year, is excluded from presence, participation, and voting except to answer the board's questions (§ 7:19-a(II)(b)(2)). The trust must keep a benefit list for board and contributor inspection and report it annually. A transaction or annual same-person aggregate of $5,000 or more also requires newspaper publication and written notice to the director of charitable trusts before consummation (§ 7:19-a(II)(c)–(d)).
Separate restrictions matter: loans to directors, officers, or trustees are prohibited (§ 7:19-a(V)); specified real-estate dealings require prior probate-court approval after a fairness finding (§ 7:19-a(VI)). Private foundations are excluded from this section (§ 7:19-a(I)(d)); § 7:19(I) excludes religious organizations from the subdivision. Hospital and educational staff compensation have limited exceptions in § 7:19-a(X)–(XI).
Common questions
Is fairness by itself enough?
No. Section 7:19-a(II) makes fairness and the required disinterested board vote cumulative conditions for a covered pecuniary benefit transaction.
What happens if the statute is violated?
The transaction is voidable. The director of charitable trusts may investigate and enforce the section, and a governing-board member may petition for a declaration that a pecuniary benefit transaction is void (§ 7:19-a(VII)–(VIII)).
Statutes and sources
- N.H. Rev. Stat. Ann. § 7:19-a(I)–(XI): covered interests, cumulative conditions, notices, exclusions, and effect. Official section, accessed 2026-10-02.
- N.H. Rev. Stat. Ann. § 7:21(II): charitable-trust and charitable-organization definitions. Official section, accessed 2026-10-02.
- N.H. Rev. Stat. Ann. § 7:19(I)–(II): subdivision reach and religious-organization exclusion. Official section, accessed 2026-10-02.
Source links
Every statute quoted above, linked, with the date we checked it.
What does New Hampshire law mean for your facts?
You just read the general rule. Ask your own question and see which parts of current New Hampshire law apply to your situation, with citations you can check.
Opens in Ezel Pro.
- Starts from the statutes this survey is built on
- Cites every source it relies on, so you can verify it
- Chat, drafting and research in one workspace