Responsibilities of a Nonprofit Board By: Maria Peeler
So you’ve been asked to serve on a nonprofit board. What an honor! If you have agreed to serve, the organization is either one that has long been close to your heart or it’s an organization, new to you, that demonstrated its worthiness as it recruited you. They do great work that you are excited to be part of.
But what does being part of it mean? If it’s your first board assignment, you may not know what to expect. If you are fortunate, the organization will have a robust new-board-member training program during which staff and other, usually more tenured, board members will explain the organization and your role in its governance. Some boards will even partner you with a “board buddy” whose job it is to help you acclimate to the organization and your new role.
Unfortunately, not all non-profit organizations have a robust board member on-boarding process. Fortunately, there are responsibilities that are basic to every nonprofit board. Knowing those responsibilities will help you determine your individual contribution to the collective effort and ensure that your board term is successful, fulfilling, and beneficial to the mission of the organization.
The top seven responsibilities of a nonprofit board include:
- Determining the mission and strategic direction of the organization. Nonprofit organizations need to have mission statements that tell the board, the staff, and the community why the organization exists and what it does. The board, along with the management staff, should review the mission periodically to ensure that it is accurate and up-to-date. The board is responsible for ensuring that a planning process takes place that translates the board’s mission into action.
- Providing financial oversight. A nonprofit board has a fiduciary responsibility to ensure the financial accountability and transparency of the organization. They must use the proper tools and ask the right questions to ensure that the assets of the organization are well-managed.
- Ensuring legal and ethical compliance. It is the board’s responsibility to not only ensure compliance with applicable local, state, and federal laws, but to ensure that the organization maintains the appearance and reality of transparency and accountability.
- Ensure appropriate funding. Nonprofits typically obtain funding through private grants, government contracts, donation solicitations, and fundraising events. The board must ensure that the funding source utilized is reliable and sufficient, and they must develop additional funding sources as necessary. The board’s leadership and public support is particularly critical when fundraising efforts include soliciting donations or holding events. Board members are usually expected to personally donate to the organization, as well.
- Hire, evaluate, and set compensation for the chief executive. Attracting and ensuring the placement of a capable and well-qualified chief executive is an important board responsibility. The board evaluates the chief executive and, rather than relying solely on a once-a-year evaluation process, the effective board engages in an ongoing process of feedback and dialogue with the chief executive. Hand-in-hand with the responsibilities of financial and ethical oversight talked about above, the board must insure that the chief executive is fairly and appropriately compensated given the specifics of the position and the organization.
- Advocating for the organization. When you begin board service, you become a vital link between the organization and the larger community. Your job is to help the organization effectively communicate its story and build a positive public image.
- Build an appropriate and competent board. Effective boards regularly assess their strengths, needs, and performance. They develop strategies to strengthen the board through the intentional recruitment of new board members and the development of all board members.