NPH Question: What Purpose does the Board of Directors serve?

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It is so important for all nonprofits to have a strong foundation, especially when they’re starting out. With that in mind, choosing your Board of Directors wisely is fundamental. But what role do these key players have within a nonprofit?

The Board of Directors acts as the governing body of your nonprofit. These individuals are responsible for overseeing the organization’s activities. Nonprofits do not have stockholders or singular owners. The organization will be the responsibility of the Board (you’ll all be like co-owners, fun!). Members of the Board will meet periodically to discuss and vote on matters pertaining to the nonprofit. These meetings should take place annually, ¬†with additional meetings to be scheduled as the need arises. A position on the Board is not usually permanent, and most organizations follow a term agreement as set up in their Bylaws. These terms are typically anywhere between two and five years.

You’ll want to find individuals in your community who are passionate about your mission, and will align themselves with your goals. There are no IRS limitations in place to determine who can serve on your Board, so anyone you deem fit can become a Board Member. However, there are some best practice guidelines that will help you to avoid inurement. For instance, you’ll want to make sure you have an odd number of Board Members to avoid a tied vote in meetings, and that board members that are not related outnumber those who are.

In an ideal situation, the Board of Directors will be different than the organization’s paid management staff. However, it is fairly common for small nonprofits and startups to also have Board members serving in these paid positions. If possible, you’ll want to avoid this scenario as having dual roles can often lead to problems. The Board of Directors should prioritize working on the organization’s mission, goals, and strategic plan, while staff members should be focused on implementing the plan.

Some members of the Board will be elected to serve as Officers. These Officers will have a higher level of responsibility than other board members. Initially, they are elected by the Board, and usually serve similar length terms. The most common and essential Officer roles are President, Secretary, and Treasurer. These roles and their terms should be defined in your bylaws. Keep in mind, an individual cannot be compensated to hold an officer position.

The President will head the Board, supervise its meetings, business, and affairs. The Secretary will keep minutes and insure the organization’s activities are in line with their Bylaws. The Treasurer will account for receipts and disbursements, and insure organization stays in good financial standing.

There are no requirements that suggest an organization cannot elect someone outside of the Board to serve as an Officer, but you are free to place such limitations in your organization’s Bylaws. An individual may hold two separate offices, except the President may not serve as the Secretary.

So go forth, and choose wisely! Your Board awaits.

 

 

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