Responsibilities of Board Members
Nonprofits serve the public. Therefore, a Board of Directors is required to govern a nonprofit. Before you invite someone to serve on the Board of a nonprofit or agree to serve on a board, it’s essential to know the expectations and responsibilities of board members.
Here is a summary of the role of the Board of Directors:
Roles and Responsibilities of Board Members
- Attending board meetings
- Participating in committee work
- Strategic planning
- Defining the mission and goals of the organization
- Reviewing the nonprofit’s programs
- Program oversight and support (evaluating all programs and staff)
- Discerning funding needs
- Fiduciary responsibilities (approving the annual budget, controlling investment policies, managing capital and reserve funds, etc.)
- Fundraising (contributing personally, identifying and soliciting contributions from prospective donors and supporters)
Legal Responsibilities of Board Members
- Act in Good Faith or avoid actions that will hurt the nonprofit.
- Duty of Care, or acting reasonably as it relates to the nonprofit
- Duty of Loyalty, or putting the best interests of the nonprofit first
- Confidentiality, or not sharing sensitive information about the nonprofit with outside parties
- Non-competition, or not engaging in activities that compete with the nonprofit or undermine its mission
Create a Board Manual
A helpful practice is to host a Board Orientation and provide each of your directors with a written Board of Directors Manual. Creating a manual can be a simple process, although in order to avoid spending time reinventing the wheel, at Chisholm Law Firm, we prepare these for our clients. However, if you’d like to do it yourself, the Board of Directors Manual should include the following information:
Board Manual Table of Contents
- Welcome letter from the President
- Board Member information sheet
- Information about the organization
- Mission & Vision
- Corporate Structure
- Roles and Responsibilities of Board Members
- Legal Duties of Board Members
- Board meetings
- Committee work
- Strategic planning
- Fiduciary responsibilities
- Program oversight and support
- Annual planning
- Programming Plan (summer retreat)
- Fundraising Plan, Investment Plan, and Annual Budget
- Public Relations Plan
- Marketing Plan
- Strategic Plan
Why Nonprofits Need a Board of Directors
Now that we’ve established the responsibilities of a Board of Directors, it’s important to know why a nonprofit needs a Board.
Generally, when someone starts a nonprofit, they will initially invite individuals to serve on a board. In general, the IRS requires at least three board members for every nonprofit organization. A Board of Directors is legally responsible for your nonprofit’s governance, fiduciary, and strategic oversight.
The founder of the nonprofit will invite individuals to serve on the Board. From there, the nonprofit will establish guidelines for selecting, removing, and replacing Board Members and outline these procedures in their Bylaws.
Before a nonprofit hires its first staff member, the Board members are the people who start and run the nonprofit. Members of the Board will likely help draft organizational documents, find supplies and equipment, and begin fundraising. Members will also manage the day-to-day operations and run the programs of an all-volunteer organization.
In this context, fiduciary refers to the money and budget of an organization. Board members will discern the funding needs and act accordingly. Every year, the Board will set the budget and allocate funds towards specific programs within the nonprofit. Members may also donate some of their own money or help solicit donations from potential supporters.
The Board of Directors sees the bigger picture of the nonprofit. While they may have been handling daily affairs initially, once a nonprofit can hire other staff members, the Board Members will begin providing direction and securing the nonprofit’s mission. Members will work closely with management to ensure that the nonprofit is meeting goals successfully and ethically.
A Board of Directors is crucial for your nonprofit. Because they are so important, it is vital to outline the roles and responsibilities of a Board member so that the nonprofit can run and grow smoothly.
As previously mentioned, at Chisholm Law Firm, we offer services to help you create Bylaws and manuals for a Board of Directors. We have a 100% success rate for our clients, and you can rest assured that your nonprofit is in the best hands.
Call us today to schedule your free consultation.
And remember – it shouldn’t be this hard to be a superhero.