The Role of a Nonprofit Board

The boarf of directors plays a critical role in the success of a nonprofit. The board is responsible for setting the org's strategic direction and ensuring the org, has the necessary resources to achieve it's goals. The board is also responsible for ensuring that the org operates within legal and ethical guidlines.

Fidiciary Duty

One of the key things the board has to do is provide financial oversight. The board is responsible for approving the orgs budget, making sure that the org is operating within it's means, and ensuring that the org is in compliance (theres that word again) with financial regulations. The board is also responsible for ensuring that the org has yada yada repeat repeat

But it’s not just oversight. Fiduciary duty means you have to treat the organization’s assets like they’re your own. You, the nonprofit board member, are fully responsible for the management, or mismanagement, of those resources.

Overseeing Management

The board of directors is also responsible for hiring and overseeing the organization’s executive director or CEO. The board sets the CEO’s compensation, evaluates their performance, and provides guidance and support to ensure that the organization is operating effectively. More on that below.

Legal Concerns

Another important role of the board is to ensure that the organization operates in compliance with legal and ethical standards. The board is responsible for ensuring that the organization is complying with all laws and regulations, and for ensuring that the organization is operating ethically and with integrity.

Mission!

Finally, the board of directors is responsible for ensuring that the organization is fulfilling its mission and achieving its goals. The board is responsible for setting the organization’s mission, vision, and values, and for ensuring that the organization is making progress towards achieving its goals.

Don't Confuse Governance for Management

A key principle to highlight here is that most boards function best when they limit themselves to governance.

Governance is high level:

• strategy

• oversight

• accountability

By contrast, management is the day-to-day operations of a nonprofit.

Ideally, a nonprofit’s governance team is different from its management team, which is made up of paid or volunteer staff members. While many small nonprofits…especially those in the startup phase…have board members serving in management positions, the ultimate goal is to have board members separate from paid staff members as much as possible. The board of directors, as a governing body, should focus on the organization’s mission, strategy, and goals. Staff members are responsible for the implementation of the mission.

Having dual-capacity board members can sometimes lead to problems between a nonprofit’s mission and how it operates. However, we have to quickly acknowledge that is not always possible in very small organizations. I served for many years on a neighborhood homeowners association board of directors, and my fellow directors and I did pretty much everything. Is that ideal? No, not at all. But sometimes it is reality in micro-sized nonprofits.

• YouGuys have enough Problems

The Role Of Officers

Organizations should also have Officers, typically chosen from among the board members, who are given a higher level of responsibility compared to other board members. Initial officers are elected by the board; this vote usually takes place during the organization’s first meeting. Much like board members, officers usually serve terms.

Typically, a nonprofit has three officers serving the role of President, Secretary, and Treasurer. Officer roles and their terms should be specifically defined in the organization’s bylaws.

The President - Me - The President heads up the board and supervices all of youguys and the business and affairs of the board. While the president can also serve as the CEO, or Executive Director of the organization, keep in mind that these two roles are seperate. Returning to an earlier point, the role of the president is a matter of governance, while the role of CEO/ED (Executive Director) No dysfunction here. is management.

The Secretary - Has to be at least an 8 - The Secretary records and archives the minutes, or record of discussion and votes, of each meeting of the Board of Directors. Additionally, the Secretary is responsible for keeping track of the organization’s activities to make sure the actions of the organization are in accordance to the organization’s Bylaws. The Secretary is usually the officer who keeps board members’ contact information in order to inform them about upcoming meetings of the board. - 8 minimum. There always has to be mad tension.

The Treasurer - Handles all of the Organizations Treasure - The Treasurer is the officer accountable for keeping accurate accounting records of the receipts and disbursements of the organization. This person is usually a signatory on all bank accounts, though he or she shouldn’t be the only signatory. Additionally the Treasurer is responsible for keeping track of the organization’s financial condition. This is an important role because it keeps the other officers and board members informed about the financials.

Meeting The Term Lengths

Term Length

Board memberships are not set up to be permanent positions; most organizations have terms set up for board members, which typically fall between two and five years. That said, most states allow nonprofit board members to serve indefinitely, and the IRS doesn’t say anything about that subject at all.

But even if your nonprofit wants board members to serve for a long time, we recommend setting up reasonable term lengths, say 2 or 3 years, and reelect those members whose terms are expiring, but there is mutual interest in their continued service.

Don’t be fearful of bringing new members, however. Sometimes fresh ideas are exactly what a nonprofit needs in order to thrive.

How to Be an Effective Nonprofit Board of Directors

Being an effective nonprofit board of directors requires a deep commitment to the organization’s mission and a willingness to devote time and energy to the organization’s success. Here are some tips for being an effective nonprofit board member:

1. Understand your role: It’s critical to understand the responsibilities of being a board member and to be prepared to fulfill those responsibilities. Board members should be knowledgeable about the organization’s mission, goals, and strategy, and should be fully aware of the organization’s finances and operations.

2. Attend meetings: Boards typically have to meet at least annually, but effective boards will meet much more often than that. Board members should attend all board meetings and come prepared to actively participate in discussions and decision-making.

3. Support fundraising efforts: Board members should be willing to support fundraising efforts, whether through personal donations or by helping to identify and cultivate donors.

4. Provide transparency and accountability: Board members should promote transparency and accountability by ensuring that the organization is operating in compliance with legal and ethical standards, and by being open and transparent about the organization’s operations and finances.

5. Engage with stakeholders: Board members should engage with the organization’s stakeholders, including staff, volunteers, donors, and community members. This includes listening to their concerns and feedback, and working to build relationships and partnerships that support the organization’s mission.

Who Makes a Great Board Member?

There are no IRS guidelines in place to determine who is certified to be on a board; most any individual can become a board member. It is best practice to find individuals within the community who have the passion and experience that aligns with the nonprofit’s mission. In addition, you probably want to choose board members who have experience in overseeing business affairs at some level. These persons will be better prepared to advise your nonprofit, compared to those with no management experience.