How many people must be on the board of directors of a U.S. nonprofit organization?

Question

Non-legally-savvy individual in Pennsylvania (PA) in the U.S. here. I've been learning a little about nonprofit corporations recently, and have had trouble finding a definitive answer to the question:

How many people must be on the board of directors of a U.S. nonprofit organization?

I understand this is ill-defined and state dependent; to be more precise, I'm most interested in finding out:

1. What is the minimum number of distinct people that are required to be on the board of directors at the time of filing of incorporation documents for a PA nonprofit corporation?
2. What is the minimum number of distinct people that are required to be on the board of directors by the IRS at the time of a nonprofit corps. 501(c)(3) application (in order to possibly be granted status)?

I'm mainly interested in the minimum number of people, so if e.g. three "titles" or "positions" are required on the board in PA, but they can all be filled by one person, I am trying to ask the question whose answer would be 1 in that case.

I'm interested in the answers to these questions, but only insofar as those answers can be justified by:

• Official documentation or guidance from the IRS or PA government
• State or federal laws or
• Relevant cases that might motivate a suggested de facto answer.

For context, I've tried to search for the answer to these questions, and mostly found via google a slew of articles, blog posts and tutorials written by independent non-government sources, and from those sources I've found a few different answers, even among the reputable-looking sources. I'm looking for evidence that can make one confident that a particular answer is correct, if such an answer exists. The closest I have come is finding official-ish looking sources that mention the issue, but don't stipulate an exact requirement.

For example

• This handbook from the PA attorney general's office: https://www.attorneygeneral.gov/wp-content/uploads/2018/02/nonprofitbooklet.pdf says

In order to avoid the appearance of impropriety, it is best not to give one individual too much control over the corporation. [...] A corporation may have as many officers with as many different titles as it deems necessary.

which suggests an nonprofit corp. with one board member might come under scrutiny or be frowned upon. However, it's unclear to me what relation this document has to the actual law, aside from of course reflecting the opinions of one individual who is involved with upholding it in practice.

• This document: https://www.legis.state.pa.us/cfdocs/legis/LI/consCheck.cfm?txtType=HTM&ttl=15&div=0&chpt=57 seems to reference part of PA state law (but maybe I've been duped and this is just some person's website...), and Subchapter C Section 5723. seems to explicitly discuss my question. It states:

The board of directors of a nonprofit corporation shall consist of one or more members. The number of directors shall be fixed by or in the manner provided in the bylaws. If not so fixed, the number of directors shall be the same as that stated in the articles or three if no number is so stated.

Which seems to suggest 1 director may form a perfectly valid board for a PA nonprofit corporation.

I have not found the official documentation or guidance for any relevant IRS regulations pertaining to 501(c)(3) status, only third parties claiming various things about what that guidance is.

Any help on these questions would be much appreciated!

Answer 1

The law related to the internal organization of corporations is a matter of state law. You cite the correct authority:

The board of directors of a nonprofit corporation shall consist of one or more members. The number of directors shall be fixed by or in the manner provided in the bylaws. If not so fixed, the number of directors shall be the same as that stated in the articles or three if no number is so stated.

15 Pa. Stat. and Consol. Stat. Ann. § 5723 (West).

The statement of the state attorney general is merely a suggestion. Although, in an entity with audited financial statements the audited financial reports must disclose that the organization lacks "adequate internal financial controls".

But, non-profit entities such as charitable trusts or "corporations sole" (such as most legally distinct entities in the Roman Catholic Church) have only a single person with full control over everything that a Board of Directors does.

The IRS likewise does not impose a minimum number of directors for a 501(c)(3) organization, or for any other kind of corporation. Nothing in the relevant statue requires that it have more than one, and many non-profits (e.g. probably a majority of churches) have only one director.

Answer 2

As for the second part of your question, in my experience forming nonprofits, the IRS will expect three unique individuals as directors. That part of the process does not take into account whether the three are related or have other conflicts of interest; in other words, there is no independence requirement in the mere naming of directors.

(State law will very often bring you to three directors.) While 501(c)(3) does not include a minimum director requirement, a board that has too many conflicts may generate a rejection, as a practical matter, without regard to the number of directors. The more directors there are, the more likely it is that the board can function reasonably in the face of conflicts and resolve them in a way that doesn't hurt the organization.