You have just been invited to join a respected nonprofit’s board of directors. Sounds flattering, right? Absolutely – and it should be. Nonprofit organizations provide critical services to those in need and have the ability to change lives, add culture, and/or improve our environment for the better. However, before immediately accepting this key position within your community, consider that this will likely be a long-term commitment (often between two and four years, or longer) and one in which you are expected to contribute your time, professional expertise, and, quite often, financial donations. In order to make sure that this will be a beneficial relationship for both you and the nonprofit itself, there are a few questions to ponder and documents to review.
Take time to thoroughly research the nonprofit and thoughtfully decide if accepting the offer of a board position will be mutually beneficial to both yourself and the organization. In order to assess the organization and what is expected of you, it is beneficial to ask the board Chair or Executive Director the following questions:
- What is the organization’s mission? This should be a focused statement that tells you what the nonprofit does and, more importantly, why it exists. If you do not understand the mission clearly, or do not feel a strong commitment to what the organization does, it is unlikely that you and the board are a good match for success in the long run.
- Why are you being asked to serve on this board? Asking this question can reveal quite a bit about what will be expected of you. There should be direct ways that you can contribute to support the nonprofit other than because you are a friend of the Executive Director or one of the board members, or simply to fill an empty seat at board meetings. As sad as that sounds, unfortunately, many board positions are filled for these reasons – hurting the agency and those it serves.
- Are you expected to join a committee in addition to your general role as a board member? Do you have the time available and the necessary expertise to adequately contribute to the committee(s), or are you presently committed to other roles and responsibilities that would prevent you from adequately fulfilling an obligation of this magnitude at this time in your life?
- What kind of orientation and board development activities are planned? Ideally, there is a formal onboarding process that will introduce you to both the board of directors and the nonprofit organization itself. You will want to be fully educated so that you can be a strategic partner from the beginning rather than merely showing up for your first meeting and having to piece together everything that is happening around you without the proper guidance from the members with whom you will be working throughout your board tenure.
- What are the responsibilities of the board? Is it focused on strategic planning, policy-making, and program evaluation, or is it primarily engaged in fundraising activities? Perhaps it is a multitude of things. It is important that you understand each of these and agree to partake in whatever is expected of you as a contributing board member.
- What is the organization’s current financial condition? Are they anticipating any financial problems? The board must assist in developing the annual budget, ensuring proper funding levels and verifying that proper financial controls are in place.
- What are the organization’s major fundraising and program goals for the next three years? Asking to see the agency’s long-term strategic plan and inquiring about the planning process is a solid place to start.
- Is there a personal financial commitment expected of you? Meaning, are they a “contributing board” and if so, how large of a donation is expected (and how often)? You may be expected to either give funds directly and/or make connections with individuals and corporations within your professional circle. Are you willing and able to fulfill any required financial commitments?
- Is the board active, focused on strategic goals, and able to function cohesively, or are there major factions amongst board members? Unfortunately, there are some nonprofit boards that are divided into factions or have a rogue member who either causes stagnation or problems within the group. All board members do not need to have homogeneous personalities, but they all should be able to work together, agree to disagree at times and keep a strategic focus on the nonprofit and its mission.
Your orientation should also include reviewing various documents in order to learn more about the nonprofit’s governance process and current financial position. If these documents are not readily available, it may raise questions about the sophistication of the board and/or the organization itself and should be taken into consideration before making a decision to accept the invitation. The key documents to review are:
- Bylaws – Are you able to clearly understand what is written, and do the internal governance policies make sense? What, if any, term limits are in place?
- Long-term strategic plan – This is the roadmap for the future of the organization and typically spans a period of three to five years. Goals should fully support the mission of the organization and be specific, measurable, and realistic.
- Conflict of interest policy – Not only is reading this policy important, but it should provide you with the opportunity to report any actual or potential conflicts of interest.
- Directors and Officers Insurance (AKA a D&O policy) – This is an insurance policy that offers liability coverage for directors and officers to protect them from personal claims which may arise from the decisions and actions taken within the scope of their regular duties as active members of the organization. (For more detailed information about D&O insurance, click here)
- Indemnification Policy – Generally contained within the bylaws, this policy outlines the intent of the nonprofit to cover the legal fees a board member might incur in defending an action made by the individual on behalf of the agency, as well as paying settlements or judgments related to serving on the board (this varies from state to state).
- Form 990 – Nonprofits are required by law to file and publicly disclose annual tax returns. If you wish to research a nonprofit’s Form 990 (which contains more than just financial information) on your own, visit guidestar.org.
- Current financial statements – (audited, if available).
- List of current board members – Do you know and respect any current members? Are there any potential conflicts of interest or personality issues to consider? You may also want to contact current board members and inquire about their experiences thus far, i.e. the “real scoop”, to help determine whether joining the board is something you truly want to do.
- Job description for board members – The job description goes a long way in verifying what will be expected of the board as a whole and of you as an individual board member.
If you are comfortable with the answers to your questions, and the documents you were able to review, then the next step is to visit the nonprofit’s administrative and program locations. This will provide you with an opportunity to meet the individuals involved in the operations and to observe the general organizational culture of the agency. Many people find that this first-hand experience also helps them to be a goodwill ambassador for the organization.
Keep in mind that your role as a nonprofit board member is a volunteer position requiring your wholehearted commitment to the organization and its mission. It is critical that you find your efforts to be rewarding and that you are able to contribute to the fulfillment of the organization’s future successes. Be sure that you are clear on what is being expected of you, that your responsibilities and duties are understandable and realistic and that you have the time and desire to fulfill this role. With this thorough understanding and desire in place, your tenure as a nonprofit board member can be a very rewarding experience!