fbpx

What does a nonprofit board do? A guide to nonprofit boards.

Building a nonprofit board of directors is one responsibility that usually falls within the early stages of nonprofit formation. After finishing your competitive assessment and getting a good grasp of the surrounding nonprofit landscape, you’ll need to name your organization, and assemble your nonprofit board members.

What does a nonprofit board do?

A competent nonprofit board will offer strategic oversight, assist with fundraising and provide guidance. Generally, your board will have three or more members, with the average being 16 voting members. Your nonprofit board leads your nonprofit. Likewise, what they bring to the table, their insight and drive are what define the organization’s governing body.  

What are the different nonprofit board member roles?

You’ll outline your nonprofit board member roles in your written bylaws. The bylaws operate as a policy and procedural manual for the organization. Some of the main roles of a nonprofit board along with a brief description are:

Board President or Board Chairperson

The nonprofit board president oversees the governance of the board and the nonprofit organization. Note that this role is different than the role of a nonprofit director, who manages and executes operations. One person can hold both positions, but the roles and responsibilities are different.The board president sets the tone for the culture of the board and steers progress toward the set goals. Specific tasks can include determining the number of meetings, setting the agenda for the board, and giving final approval on proposed fundraising initiatives.

Board Vice President or Board Vice Chairperson

The nonprofit board vice president is next in line should the board president be unable to fulfill their member duties or step down from their role. The board vice president runs meetings and helps to set the agenda.

Board Secretary

The nonprofit board secretary is in charge of keeping meeting minutes and maintaining important documents for the organization. They work in collaboration with the other board members.

Board Treasurer

The board treasurer oversees the financial management of the organization. These duties can include financial reports, budgets, tax documents, and more. Ultimately, the main responsibility of the board treasurer is to make sure that financial records are kept, maintained, and available.

Board Member

Other nonprofit board members perform duties based on their skill sets or connections. For example, a board member could help to oversee fundraising, or marketing specifically. 

What are the responsibilities of a nonprofit board member?

The responsibilities of nonprofit board members can vary by organization. Talent, time, and treasure, though helpful, are but a short wish-list of attributes a leadership team can bring. 

More specific board member responsibilities, when met, help to ensure sound operating practices. Good Governance documentation from the Internal Revenue Service includes this broad responsibilities outline:

  • Mission
    • “A clearly articulated mission, adopted by the board of directors, serves to explain and popularize the charity’s purpose and guide its work. It also addresses why the charity exists, what it hopes to accomplish, and what activities it will undertake, where, and for whom.”
  • Organizational Documentation
    • “must have organizational documents that provide the framework for its governance and management.”
  • Governing Body
    • Be active, engaged, and informed
    • Privy to all charitable operations and finances
    • Seek the best interest of charitable and public interests
  • Governance and management policies
    • The IRS will review if the organization “has implemented policies relating to executive compensation, conflicts of interest, investments, fundraising, documenting governance decisions, document retention and destruction, and whistleblower claims”
  • Financial statements
    • “ensure that financial resources are used to further charitable purposes and that the organization’s funds are appropriately accounted for by regularly receiving and reviewing up-to-date financial statements and any auditor’s letters or finance and audit committee reports”
  • Transparency and accountability 
    • make available “full and accurate information about its mission, activities, finance, and governance publicly”

Do nonprofit board members get paid?

Great people with great skills have joined your great organization. Should you pay them or should they receive compensation of some kind? After all, their time is valuable and it’s likely they have full-time jobs in addition to time spent serving the community. 

It is not illegal to compensate board members, but it is uncommon for nonprofit board members to be paid. In one benchmark research study from ASAE, it was found that less than 13% of associations have compensation arrangements for the chief elected officer, such as an annual stipend or per-meeting fee. Payment for other board member positions was even less common. 

The IRS does not require charities to use a particular formula when determining compensation for directors, officers, “key employees,” or those who are in a position of substantial influence. However, they do advise that compensation should be reasonable for the services rendered and should not be excessive. 

Your organization should have a written compensation policy if it intends to compensate board members for their time spent at meetings or for other member-incurred expenses. This policy should also be reviewed against bylaws and state laws, to protect all parties and the organization. Additionally, the organization’s financial officers will be responsible for issuing Form 990, as it covers the organization’s compensation arrangements where applicable. However, if a member is paid more than $600 per year, then the organization must issue a form 1099 Msc.  

How often should a nonprofit board of directors meet?

As a guideline, here are some interesting nonprofit board statistics:

• The average number of board meetings per year is 6.9

• The average board meeting lasts 3.3 hours

• Members average 10 hours per month on Board/Committee Business

• Most Common Board Terms: 3 years – 70%

Additionally, nonprofit board member meetings are a required responsibility and attendance is expected of those serving. Clearly communicate the time commitments needed by board members before they join your organization.

Tools to make your nonprofit board happy.

Ribbon is an all-in-one platform designed to help nonprofits manage fiscal sponsorships and charitable individuals start new nonprofits quicker. Get all the tools you’ll need to make your board happy with Ribbon.


Does it really matter who is on my nonprofit board?

It matters who is on your board, in the same way it matters that you put strong stakes in your camping tent. Your nonprofit board members are the framework of your organization!

The Internal Revenue Service agrees too, “a well-governed charity is more likely to obey the tax laws, safeguard charitable assets, and serve charitable interests than one with poor or lax governance. A charity that has clearly articulated purposes that describe its mission, a knowledgeable and committed governing body and management team, and sound management practices is more likely to operate effectively and consistent with tax law requirements.”

While some nonprofit founders may rush to assemble their board, it is worth slowing down and vetting members.  Board members will generally serve for two-to-three year periods and seek consecutive terms. Board member turnover can stem from a lack of unity in the mission, opposing ideas for strategy, lack of applicable skill, or not fully understanding the expected responsibilities of a board member. Because each member’s role is key to the momentum of the organization, any board member turnover, even that of a lackluster contributor, will affect the growth of the organization. Experienced nonprofit professionals will tell you that just because someone supports your cause does not mean that they are qualified to govern it. 

How can I build/recruit/find nonprofit board members?

Your nonprofit board should not be an assembly of your weekend BBQ buddies and cousins – but should be a group of strategic thinkers, who can focus on the shared mission. 

Seek out individuals who can delegate, manage details, and collaborate with other. We recognize this can be a challenge for many founders. Forty-four percent of organizations have reported that attracting quality leadership and board members is a high or moderate-level challenge.

A few ways to better process board member candidates can include implementing:

  • Strong recruitment and vetting based on finding desired skills and values.
  • Clear expectations that define responsibilities and time commitments.
  • Board member development plans that cover governance practices, financial knowledge, organizational structure, and transition plans.

Joining a nonprofit board is similar to joining a new job – and most new jobs require some training! Thorough organizations will have a plan for board member training and development.

How can I be a great nonprofit board member?

The Council of Nonprofits released this guide a few years ago that holds some great self-evaluation questions for those considering nonprofit leadership positions. For example, a few stand-out principles gleaned are:

  • A great board member will be grateful for the opportunity to serve.
  • A great board member will bring a passion for the cause to the organization.
  • A great board member will ask self-evaluation questions, showing that they are serious about the commitment and have intent to stick around.

“Without question, all successful board members must possess two essential qualities: integrity and an open mind. Board members must be people of principle. On a board, any appearance of shady or slick dealings is altogether out of the question. Any conflict of interest, actual or perceived, is troublesome in deliberations and potentially damaging to the organization. The best trustees bring to the table neither their prejudices nor their own agendas. … They aren’t stuck on winning every issue. They are team players.” – Fisher Howe, in Welcome to the Board 

Overall, your nonprofit board members are vital to the success of your organization. Although, you can expect that there will be turnover and learning curves for members. By vetting your candidates and being selective with who joins your board, you’ll get a smoother board member recruitment and retention process.

Disclaimer

This article contains general information intended to be educational and does not constitute legal advice. Ribbon is not a law firm nor a substitute for an attorney.

Other great posts

Nonprofit support

How to evaluate a nonprofit

Evaluating a nonprofit can be a monumental task. According to data from the National Center for Charitable Statistics, there are more

Read More

Get started with Ribbon today

Make building and managing your nonprofit easier by joining Ribbon today.