9 Core Responsibilities of Nonprofit Board Members
Nonprofit boards are technically the most powerful entity within a nonprofit. However, too many nonprofit boards and board members don’t fully understand their core responsibilities.
This can result in a range of problems – from finances to fundraising to long-term sustainability.
Despite how many nonprofit boards are struggling, board leadership and management does not have to be complicated.
In this article, I’ll break down the nine core responsibilities of nonprofit boards in the United States. Note that this is for US 501(c)(3) public charities, not private foundations.
We’ll also cover resources and easy-to-use tools that can quickly help make your board more effective.
If you’re struggling with your nonprofit board’s performance, check out my free board primer to Transform Your Board in 90 Days.
Responsibility 1: Nonprofit Boards Set and Enforce Policy
At the most basic level, boards are the governing body of the nonprofit organization. Every nonprofit organization starts by incorporating, like any company, in a state or similar jurisdiction. The laws and rules of that state govern the makeup of the board and these rules normally make it into the bylaws when the nonprofit entity is formed. For example, state law might dictate that there must be at least three board members and three officers.
Boards must then follow the Duty of Obedience. This means that the board should follow local, state, and federal law and its own bylaws.
All US 501(c)(3) nonprofits should have a conflict of interest policy, a whistleblower policy, and a document retention and destruction policy. These policies may developed in committees or at the full board level.
Additional policies the board may consider include: a rainy day policy, a gift acceptance policy, a non-discrimination policy, and a “give or get” fundraising policy. In a perfect world, this would be codified into a board agreement. If your nonprofit don’t have one yet, you can grab this sample board agreement.
Boards must follow their own policies and bylaws or they open themselves to risk, lawsuits, or reputational damage.
“Boards must follow their own policies and bylaws or they open themselves to risk, lawsuits, or reputational damage. ”
Responsibility 2: Boards Govern and Provide Due Diligence
9 Core Responsibilities of Nonprofit Board Members
The most fundamental responsibility nonprofit boards have is to… meet. Yep!
Most states require that a board meets regularly, at least once a year.
Most nonprofit boards also do nearly all their governing work during meetings, including full board meetings and committee meetings.
It’s during meetings that boards review policies, practices, milestones, financial data, goals, work plans, and executive director reports.
Plus, nonprofit boards shine when they get together and talk, socialize, conduct training, review materials, ask questions, and carve up their division of labor.
Board members must also follow the Duty of Care, which means when they act as board members for the nonprofit, they must protect the organization’s assets and reputation and put all other interests aside.
“Board members must also follow the Duty of Care, which means when they act as board members for the nonprofit, they must protect the organization’s assets and reputation and put all other interests aside. ”
Nonprofit boards are responsible for ensuring the organization is operating morally, ethically, and legally and in alignment with its purpose or mission. This includes managing risk. Some risk is acceptable because you must take some risks to succeed.
Some risk you transfer with insurance. But other times you must mitigate and reduce risk. Boards must balance financial and reputational risk with opportunities for the organization.
Responsibility 3: Boards Hire, Fire, and Evaluate the Executive Director
One of the most important tasks of a board is to hire, evaluate, and possibly fire its chief executive.
As nonprofits grow and get older they tend to professionalize, become more sophisticated and start to delegate to and empower experts. If your organization is lucky enough to hire an executive director, the board (possibly in conjunction with a search firm) will create a job description and an annual executive director evaluation tool.
Boards must understand the division of labor and how to use it effectively. Check out my free infographic to help you get on the right path.
Responsibility 4: Nonprofit Boards Set the Future
In general, nonprofit boards are responsible for setting the long-term vision for the organization. In reality, boards typically do this with the executive director.
In either case, the board should be bought into the mission, vision, and values of the nonprofit. After this vision is set through a strategic planning or goal-setting process, the staff will then implement and operationalize that plan.
Responsibility 5: The “Future” Includes Passing a Budget
Part of the board’s responsibility for “setting the future” includes passing a budget that creates a financial plan for how the money will be raised and spent in the next year, consistent with the Duty of Care.
The budget should be passed before the fiscal year begins. In a perfect world, the board-approved budget should allow some flexibility for staff leaders to achieve the organization’s goals while also providing guardrails that can be updated over time.
Budgets are also moral documents telling the world, including staff and stakeholders, what you prioritize. If you care about professional development, you’ll put it in the budget. If you can pay people what they are worth, you’ll put it in the budget.
Passing a budget is not merely voting on numbers, it is charting a future and the norms and values of an organization.
“Passing a budget is not merely voting on numbers, it is charting a future and the norms and values of an organization. ”
Responsibility 6: Nonprofit Boards Fundraise
As we mentioned above, all boards have a Duty of Care. This means they must protect the organization. For nonprofit boards, part of the Duty of Care is making sure the organization can pay its bills – which requires fundraising.
After an organization creates and passes a budget, boards need to ensure they resource that budget. Boards can’t just be there for the spending part, they must be there for the fundraising part.
Board fundraising is often a sensitive subject and a perpetual challenge. That’s why I created this easy-to-implement Board Fundraising Toolkit.
Responsibility 7: Nonprofit Boards Develop Themselves
Nonprofit boards should improve over time. This is a key but often overlooked responsibility.
Boards should use various tools to recruit top talent, retain existing talent, and remove board members who are not honoring their commitments. Since most organizations plan to be around for a long time, boards should be permanently working to make the board sustainable.
For some boards, this may mean term limits to keep the organization from entrenched thinking. For other boards, it includes using governance and nomination functions to create a talent pool to draw on for future board leadership.
Just like nonprofit staff leaders, nonprofit boards need to think about culture and representation too.
For example, if an organization is in a predominantly Latinx community, it should consider making sure there is authentic and inclusive representation on the board of the service population and/or the geographic community it serves. The same goes for youth, people with disabilities, etc.
For board and staff leaders looking to improve their board’s development, be sure you are providing a strong board member orientation, ongoing training, and time for relationship-building and a little fun!
Responsibility 8: Boards Develop the Organization
Boards should not be content with the status quo or decline. Nonprofit boards are responsible for working toward mission attainment. This means there will always be people to meet, dollars to raise, coalitions to join, positions to take, and documents to review.
One of the biggest responsibilities of a nonprofit board is the ambassadorial role. Board members should use their personal and professional networks, skills, talents, and superpowers to strengthen the organization.
This brings us to the Duty of Loyalty. Board members should not put any other organization or self-interest ahead of the organization. Board members should be constantly moving the organization forward and creating the conditions for success.
Responsibility 9: Balanced Engagement
This may seem redundant but I want to call out the single biggest problem with volunteer boards - engagement.
Most board members of most nonprofit organizations are checked out and not fully participating. Sometimes this is because board members dump all the work on paid staff. Other times, it is because of “social loafing” or “free riding,” which is the phenomenon that groups are lazy. The more members there are in a group, the more likely they are to assume others will pick up the slack. Regardless, many board members are not responding to emails, reviewing critical materials, attending meetings, raising money, or other vital tasks.
On the flip side, some nonprofit members are overly involved by either micro-managing or pitching in where it isn’t needed. Board members should get clear on what constitutes great board engagement and then reinforce that norm.
We all have our nonprofit love languages, and some show up by asking great questions and others want to lick envelopes. Still, others think staying out of the way is the best way to let the staff lead. Every organization must find its own balance and then reinforce those practices.
Conclusion
Being a board member of a nonprofit carries with it a lot of responsibility and a lot of respect, but no compensation because the motives should be impact, not profit.
Board members are the closest things to “owners” of the not-for-profit corporation which means they have responsibilities to each other, to the government, and to stakeholders. Feel free to use the nine core responsibilities described in this article like a checklist to gauge your own or your board’s performance.
