Establishing a Board of Directors for Your Nonprofit

The hands-on work performed a nonprofit is often seen as the driving force behind its cause. Whether stocking canned food at a pantry, walking a dog at a shelter or providing medical care for children in low income families, the tireless volunteer is what many people associate with these organizations and their impact on the community.

Equally important, however, is an effective board of directors – a governing body that keeps the organization focused on its mission and helps manage the business side of nonprofit work. Without an engaged and visionary board, a nonprofit can easily veer from its goals or lose control of its financial well-being.

The board of a nonprofit focuses on the organization’s strategy, mission and goals instead of its day-to-day operations. While members should be updated regularly on events and issues that arise, the actual work they perform addresses more high-level tasks and challenges. The board provides a touchstone for the organization’s staff when it gets so immersed in operations that the overall picture is difficult to see. By “righting the ship” in such instances, a board of directors helps the organization stay focused and stable.

The first step in establishing a board is to determine its structure, including size and scope of responsibilities. It is important that this structure addresses the needs of your organization, so several aspects of your nonprofit should be considered, including:

  • size, complexity and geographical range
  • fundraising needs
  • mission
  • maturity (how established your nonprofit is)
  • staff size and abilities

You might also consider establishing committees that address specific issues under the board’s jurisdiction such as finance, audit, fundraising or strategic planning. With larger nonprofits, some of these areas require more work than a board can handle on its own. In such a case, a committee performs some or all of those tasks and then brings results and decisions to the board of directors.

Once you’ve decided upon the size and roles of your board, choose people to serve as members. They should possess skills suited to the functions they’ll perform – a CPA to serve as treasurer, a human resources professional to oversee employment matters, etc. You should also consider the level of passion they have for your cause; board members should be emotionally invested in the work your nonprofit performs for its constituents.

Board members must be financially independent of the organization. For example, they should not receive compensation from the nonprofit as an employee or officer. Additionally, if a board member is an independent contractor that works with the nonprofit, there are also restrictions on how much he or she can be paid for work performed. Additionally, make sure they are aware of and can attend scheduled meetings (most experts suggest at least four meetings per year at regular intervals).

Finally, establish policies for your board to make sure the work they do is in compliance with applicable laws and regulations. The National Council of Nonprofits recommends having these in place for conflict of interest, public whistleblower protection, written document retention/destruction, gift acceptance and several other areas of concern. (These are also highlighted on IRS Form 990.)

A strong and capable board is an essential contributor to a nonprofit’s success. By carefully planning and creating your board to suit your organization, you’ll be better able to help those in need for many years to come.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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