The Redville Community Center, a nonprofit organization, was facing a

The Redville Community Center, a nonprofit organization, was facing a budgetary crisis due to rising utility costs and expensive building repairs that were necessary to keep the center open. The board of directors decided to raise the membership fees and assess a building fee to raise the necessary funds. Toward the end of the year the board discovered that the costs were less than they thought and the fee changes actually gave the center a budget surplus. The board decided to use the surplus funds to buy a new van to shuttle people from the nearby nursing home to the center even though the old van was still serviceable. But before doing so, the board should obtain permission from the members who paid the additional fees.

Which one of the following policies, if put into effect, would most justify the position advocated above and yet place the least restriction on the use of funds by community centers?


(A) Beneficiaries of a nonprofit organization with a vested fee-based interest should be considered to be placing their trust in the directors of those organizations to use the money wisely according to whatever circumstance might arise.

(B) Beneficiaries of a nonprofit organization with a vested fee-based interest cannot delegate to the directors of those organizations the responsibility of allocating the funds received for various purposes consonant with the purposes of the organization as the directors of the organization see fit.

(C) Directors of nonprofit organizations cannot allocate assessments to any purposes for which the directors had not specifically earmarked the funds in advance.

(D) Fees assessed by a nonprofit organization for a specific purpose should only be used for that purpose, or if that is unable to happen then should only be used according to the express wishes of those who pay the assessments.

(E) Directors of nonprofit organizations who assess additional fees for specific purposes must return funds received from such assessments if more money is received than can practicably be used for the specified purpose of the assessment.
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