Generally, a board will not be saddled with a failing nonprofit's debt. But that's no reason to look the other way. A board member may be held personally liable for unpaid taxes and penalties for failure to file returns or see that payroll taxes are withheld and paid.

Also, if a board decision or lack of a decision is grossly negligent, board members are sometimes held personally responsible.

The bottom line is that it is best to resign from a loosely run board unless you are covered by an adequate D & O liability policy (directors and officers liability policy).