Every nonprofit has a Board of Directors. Yet most people don’t understand what exactly the Board’s job is.
It’s surprising how many Board members themselves are confused about their role.
Some Executive Directors are a little unsure what their Board should be doing, but they’re pretty sure it’s more than what they’re doing now!
And you know what? If your Board members and staff aren’t clear about the Board’s responsibilities, the nonprofit is set up for a big mess. People are going to be frustrated and unhappy, and ultimately Board members will resign.
Whether you’re just starting out or already have a Board in place, you need to understand the role of your Board so you can support people to understand and do their job.
You see, your nonprofit’s Board is ultimately responsible for your organization, interfacing between your organization and the community.
Someone once said a Board has to provide foresight, oversight, and insight.
In other words, your Board should help you see problems before they occur, they should evaluate how well things are working, and they should help you find new and better solutions.
So, what EXACTLY should your Board be doing? And what should they NOT be doing?
Let’s look at the 10 basic roles and responsibilities of a nonprofit Board of Directors.
What a Nonprofit Board does
Your nonprofit’s Board of Directors exists to make sure that your organization fulfills its mission.
Plain and simple.
It’s also responsible for making sure the organization meets its regulatory responsibilities and files appropriate paperwork with government agencies.
Plus, it’s responsible for ensuring that you meet goals and keep promises to the public, donors, and beneficiaries.
It’s a much bigger responsibility than most people understand.
Unfortunately, most people who serve on nonprofit Boards have no clue what they’ve gotten themselves into.
They don’t understand their fiscal or legal responsibility nor their ethical responsibility.
You see, there’s no “Board School” where people go to get a basic understanding of how nonprofit Boards work.
And in the absence of understanding, people do whatever they think is right, which leaves the organization open to micromanaging, mismanagement, and more.
It pays big in the long run to take the time to make sure everyone is on the same page and understands their role so you can build a cohesive group of people who have your back when you need them.
Your Nonprofit Board of Directors’ 10 Basic Roles and Responsibilities
There are 10 basic roles and responsibilities for a nonprofit Board.
1. Determine the Organization’s Mission and Purpose
Your Board is responsible for determining the mission of the organization. Normally that seems like something they would do during the startup phase of the nonprofit, but missions can change over time. During the growth of your nonprofit, your Board is responsible for keeping the organization focused so mission creep doesn’t happen. Board members should be able to help you decide if the programs and services you currently have are pertinent to the mission. They should also help create new programs and services that accomplish your mission and help raise the funds to keep your dreams alive.
2. Select the Executive Director
The nonprofit Board of Directors is responsible for hiring and overseeing the Executive Director or CEO of the nonprofit. Initially, the Executive Director role is filled by the Founder. Later, the Board may need to recruit and hire an Executive Director and decide on a pay scale. Either way, the Board has one employee to oversee: the Executive Director. The Executive Director is responsible for managing staff and volunteers and running day-to-day operations. Ideally, the Board and Executive Director will work together as partners to lead the nonprofit, especially on the strategic plan, fundraising, and overall evaluation of the organization.
3. Provide Proper Financial Oversight
It’s the Board’s job to provide financial oversight for the organization. The Board will be responsible for monitoring how closely financial activity matches the actual budget, looking into how much programs and services cost, and whether that cost is appropriate. They should put internal controls in place and help write policies to prevent loss, theft, or confusion, using current best practices. For instance, they may create a policy that requires two signatures on the back of a check to make sure that no one person can remove money from the bank account. The Board should inspect your balance sheet and income statement regularly, preferably monthly, and they are responsible for making sure you meet your legal and tax obligations. A Board that is serious about this role can be very helpful when you approach potential donors because it can alleviate concerns about where their money is being spent!
4. Ensure Adequate Resources
Board members should want your organization to succeed! And they should be willing to help raise money to ensure the organization has the resources it needs to succeed. All board members should be involved in fundraising in some capacity during the year. It may be helpful to put your expectations for Board members in writing so it’s clear what you consider “participation in fundraising.” You should also acknowledge that your Board members each have different skills and personalities, and some will be better at asking for money than others. Try to find them a place to help where they can excel instead of asking every Board member to do the same job (which won’t work). Encourage them to leverage their professional and social relationships to bring new supporters to the table. Who do they know that could be potential donors for your organization? Your Board should also make personal financial contributions to the nonprofit that they serve on the Board of. Having 100% Board giving is important for getting grants and also lets donors know that the entire Board is fully behind the nonprofit.
5. Ensure Legal and Ethical Integrity and Maintain Accountability
The Board is responsible for making sure that the nonprofit operates with the laws that govern it at the local, state, and national level. That can mean things like submitting annual corporate paperwork to the state, submitting revenue/tax information to appropriate agencies (in the US it’s the IRS), and renewing solicitation permits. Every Board member should be familiar with your organization’s bylaws and adhere to them. Your bylaws are the organization’s internal rules of operation and if they are out of date or not followed, your nonprofit is out of integrity with itself. The Board should make sure the organization has a system for keeping accurate records in case they are requested by government agencies or donors. The Board should help create and maintain a code of ethics for the organization. Ultimately, your Board is responsible for making sure that the nonprofit is in compliance with all relevant laws and regulations.
6. Ensure Effective Organizational Planning
The Board is responsible for both short-term and long-term strategic planning. In conjunction with key staff and volunteers, the Board needs to make realistic plans that take into account the organization’s vision, the community’s needs, and the external context in which your nonprofit operates. The Board should also be involved in planning for accountability and evaluation of the strategic plan once it’s implemented. This means reviewing the cost of operating programs, appropriate levels of cost, and whether programs or services should be initiated or discontinued.
7. Recruit and Orient New Board Members and Assess Board Performance
The Board is responsible for recruiting new board members, although it’s best done in partnership with your Executive Director. Start by identifying the skills, expertise, and connections you need in new Board members to take your organization to the next level. Once you recruit new Board members, it’s the Board’s job to orient them to help them understand their roles. Your Board members with just a year’s experience can be very helpful in this process since they’re the last ones to come through it. Your Board should also periodically perform a self-assessment to evaluate their performance and identify areas for development. This is different from an overall evaluation of the organization. It’s simply to evaluate how the Board might be more effective in their role. These evaluations need not be judgmental or focus only on the negative. Give the Board room to pat itself on the back for things that are going right! If there are issues or conflicts, you and your Board members might find that an outside consultant can be a lot of help in facilitating the assessment.
8. Enhance the Organization’s Public Standing
Board members should always be prepared to speak well of the organization and advocate for its services. They are a bridge between your nonprofit and the community, the media, and government entities. Because they donate their time, people in the community tend to respect the fact that they are part of something they really believe in. Each Board member should remember that they may be the only ambassador of your organization that some people meet. The Board should work to create the public brand of the organization as well. Together with the Executive Director, they should decide who the public spokesperson is, what they should say, and how they should interface with the media.
9. Determine, Monitor, and Strengthen the Organization’s Programs and Services
Board members should have detailed knowledge of who participates in or takes advantage of your major programs and services. They should be watching for participation trends in the numbers and categories of people served. Your nonprofit Board of Directors will be helping you decide what portion of the annual budget is devoted to programs and services, so it’s important to know what’s working, what’s not working, and what needs to be improved on. Your Board should work with the Executive Director to develop a way to measure the success of your programs and participants’ satisfaction with their experience in your programs.
10. Support the Chief Executive and Assess His/Her Performance
Your Board is responsible for providing an annual performance evaluation for the Executive Director. The Board should create a clear process for conducting this evaluation and identify specific Board members to carry out the evaluation on behalf of the entire Board. Everyone should be very clear about when and how evaluations should take place, preferably done at the same time each year.
The Bottom Line
Your nonprofit Board of Directors has a specific job to do and a clear set of roles and responsibilities.
If you want to see your exciting vision for the future come true, get your Board trained so they understand and embrace their roles and responsibilities.
For lots of extra information about nonprofit Bards go to boardsource.org
The Board Member’s Guide to Fund Raising by Fisher Howe