Q: I live in a trailer park that is part of the city's low-income housing, purchased by a 501(c)(3) non-profit for the purpose of lessening the burden of government in the application of the low-income housing section. The park was purchased with tax-exempt bonds Can the residents maintain all of the seats of the Board of the 501(c)(3) that owns the park, as long as we maintain the purpose set forth within the approved 501(c)(3)? Is there a ruling needed by the IRS?

A: This an interesting question, as many new charities are unsure of how to structure their boards. Generally, a charity is free to invite anyone it likes to be a board member. However, you should be sure no one that has a personal conflict of interest has undue influence over the board. Your state may have specific requirements. Check with your state charity regulator to find out.æ

Often, boards are staffed with other nonprofit leaders and people who have knowledge of the organization's subject matter. Board members are sometimes chosen for abilities in other areas as well, such as fundraising or community outreach.

In your specific case, there are two possibilities. If the park was purchased by an established 501(c)(3) that is also involved with other low-income housing, there is no need for residents to replace the current board, although it would be a good idea to have residents represented on the board.

If a new charity was established for the specific purpose of running the park, then you need to make sure the IRS will not deny tax exempt status because the resources of the organization provide personal benefit to the resident board members. Because you suggest a board that is solely made up of people living in the trailer park, members may have a chance to make decisions for the charity that could benefit them privately. You should consult with a lawyer on this issue. The city may be able to refer you someone, or you can try Pro Bono Net (www.probono.net), which matches volunteers with groups that need legal services.

Aside from any legal issues, you may want to include some outsiders, who have expertise in running low-income housing, especially in the beginning. You may also want to consider someone from the city's low-income housing department, depending on how involved the city will be in the future (for example, by referring new residents). You may want to have someone with other outside expertise as a resource. Since tax-exempt bonds are being used to finance the project, there may be specific requirements from that funding source.

An excellent source for any question on nonprofit boards is BoardSource, which is on the web at www.boardsource.org. They have information on starting up your board, as well as answers to legal questions and just about anything else in their "Q&A" section.

Another interesting resource for nonprofits interested in finding board members is BoardnetUSA, which serves as a kind of presonals site for those interested in serving on boards, and those looking for board members. Available online at (you guessed it) www.boardnetusa.org.