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Nonprofit Boards and Their Responsibilities

Nonprofit boards are teams composed of individuals who work to govern the organization. They do this by holding regular meetings, with the aim of establishing strategy and direction, managing resources and oversight. Boards are also able to engage in philanthropic activities including fundraising and providing professional services free of charge to the nonprofit.

Most states set the minimum number of board members that a nonprofit has to have, and some require that boards be diverse to maintain their tax-exempt status. The requirement for diversity isn’t intended to be a political plaything, though: Diversity should be based on having no conflicts of interest, or any other reason that could prevent an individual from serving on a nonprofit board.

The board’s responsibilities include appointing the committees, deciding on the CEO and remuneration, establishing the budget and managing legal matters, examining and approving financial reports making decisions about the compensation of senior staff members and developing the strategy. Boards also help represent the organization in the community and in discussions with government entities donors, media and.

Boards are not just required to appoint committees, select and pay the CEO, and set the budget, but they must also conduct due diligence on potential donors to ensure that they are legitimate and are able for donations to nonprofits. They must also scrutinize the financial reports and approve them, and keep a record of each meeting. A functioning board will be committed to its duties and work as a unit to succeed.

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