As a nonprofit board member, you'll be given the opportunity to serve in an advisory capacity. Your responsibilities will vary depending on the type of organization and its needs. For example, if your organization is looking for ways to expand or improve services, you might work with other board members and staff to decide what strategies would best meet those goals. Other times you may need to make decisions about personnel (hiring new staff), finances (allocating funds) or fundraising. Ultimately, there's no one way of doing these things right; it really depends on the situation at hand and what your organization needs most from its board members at that point in time.
Although every nonprofit is unique, almost all board members must uphold the basic responsibilities of overseeing the organization’s strategy, financial health, legal requirements, and governance.
Let’s look at each of these focus areas in more detail:
Board members have a responsibility to carry out the mission, vision and values of the organization. To further this goal, certain strategic responsibilities are expected from each board member. Board members need to maintain a high level of awareness of the needs of the organization and its constituents. In addition to understanding the mission of the nonprofit, board members should also understand who is involved with it including but not limited to donors, staff and volunteers. They should possess a basic knowledge of the organization and how it operates. This will help them make better decisions and avoid putting the full burden on others to explain every detail about the structure of the organization.
Finance and Financial Oversight
Nonprofit boards are tasked with overseeing the financial sustainability of the organization. Nonprofit board members are legally responsible for ensuring that their organizations operate within the law and have a sound financial foundation. Nonprofit board members must understand the difference between nonprofit accounting, which is used to report an organization's accomplishments, and corporate accounting, which is used to measure profitability against revenue generated. Boards must also monitor finances in order to ensure they meet state requirements for tax exemption. Additionally, nonprofit board members need to know how to keep nonprofit assets separate from personal assets in order to maintain transparency and protect themselves from allegations of insider dealing or misuse of resources.
Nonprofit board members are required to fulfill many legal responsibilities, such as completing their duties in good faith and within the nonprofit's bylaws. These requirements can be found under both state and federal laws that govern the organization. A nonprofit board member must always act in the best interest of the organization itself. This means they cannot take any actions that benefit themselves or certain people or groups at the expense of the organization's success. To maintain this high standard of moral conduct, it is critical that all board members re-evaluate their roles on a regular basis. They should ensure that they're fulfilling their duties in accordance with applicable rules for keeping good records.
The responsibilities of a nonprofit board member can be described as the duty to perform the following functions:
Actively participate in setting policy and oversight
Ensure that an organization's work is both useful and relevant
To provide leadership, strategic direction for the organization
Seek out opportunities for continued learning about issues related to an organization's mission
Build connections with other people working on similar issues
Understand legal requirements and constraints
Monitor organizational vulnerabilities by being aware of potential threats
Nonprofit board members are responsible for ensuring their organization is in compliance with the law, ethical standards, and best practices. They also have to make sure that everything they do maintains or improves its financial health. Board members play a variety of roles depending on what your nonprofit needs at different stages in its life cycle, but all board member positions require legal, ethical, and financial responsibility to protect the organization you care about most. Our free certificate program in Nonprofit Board Member Essentials is a fantastic way to Learn more about how nonprofits operate and how you can become a high-impact nonprofit board member.