I am on a Non-Profit Board, Now What?!?

You made it! 
You have found the right non-profit organization and joined the board. The next question I hear most often is, “Now what do I do?” The answer to that question is both simple and complex. We are going to explore your responsibilities and the ramifications of your new role. 

Continue your investigations 
 
In the first 90 days after joining, you should do everything you can to learn more about the board. While your initial information-gathering gave you an overview, now is the time to dive deeper.  

• Get a list of all of the board members. 
• Attend a board meeting. 

• Schedule one-on-one meetings with the board chair, committee chairs and other board members. 
• Attend committee meetings, as few or as many as you are interested in. 
• Choose a committee to serve on and get involved. 

 
Spend time getting to know fellow board members and learning the ins and outs of the board, the committees and the organization. 
 
Understand your legal responsibilities as a board member 
 
In the State of Washington RCW 24.03.127 defines the Duties of a Director for a non-profit corporation. It requires directors to act ”in good faith, in a manner such director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.”  
 
Three basic duties to remember as you participate on the board of any organization are: 

• Good faith – acting in a manner you believe is in the best interest of the organization. 
• Loyalty – furthering the interest of the organization and refraining from actual or perceived conflicts of interest. 
• Care – Exercising due diligence in the oversight of corporate officers, reviewing all necessary information to make informed decisions, exercising independent judgement (otherwise known as the ‘prudent person’ rule – using the skill, caution and judgement that a prudent person would.) 

 
Jacobson Jarvis and Company offers an excellent resource for new and existing board members. What Board Members Need to Know About Not-for-Profit Finance and Accounting. I recommend it highly. 
 
Re-review the Board Manual 
 
In the course of your initial search, you became acquainted with the board manual on a macro level. Now’s the time to drill down into the detail. 
 
Understand the skills you bring to the organization. In what areas do your skills, passion and expertise overlap? When you’ve identified and prioritized those skills (as well as your available time for each) communicate them to the Executive Director, the Board Chair, the Development Director and the Chair of your chosen committee. Find the best ways the organization can leverage your skills to make the biggest impact on and for the organization. 
 
One word of caution – you have a fiduciary and liability responsibility to the organization. Understand what their Directors & Officers (D&O) insurance covers. This is for your own protection as well as the organization’s. You don’t want to invalidate the coverage through an unintentional act, even if it is done in good faith.  
 
A perfect example of this is volunteering to step in and fill a vacancy in the organization because it happens to be in your area of expertise. For instance, as an HR executive in the for-profit world you might be tempted to step in and fill a temporary vacancy as the non-profit’s HR director. Stop. Before you take what seems to be a natural and obvious step, consult the organization’s D&O policy.  
 
Governance Responsibilities 
​
The board, of which you are now a part, is responsible for the governance of the organization. Become familiar with these responsibilities so you can actively participate in the board and contribute to the well-being of the organization.  
 
 1. Determine the Mission and Purpose of the organization 

• Create the organization’s Mission & Purpose, if need be 
• Review annually and update every 2-3 years

 2. Select and evaluate the CEO or Executive Director 

• Ensure they have the internal support needed, both staff & board
• Determine that their skills continue to meet the organization’s needs as it changes/grows.  Organizations often need different skills at different organizational cycles.  

 3. Ensure effective planning; actively participate & assist in implementation 

• Creation & implementation of a strategic plan 
  (Note - a strategic plan has a lifespan of 3-5 years)
• This should be reviewed/updated annually 

 4. Responsibility to monitor and strengthen programs & services 

• Ensure programs and services are consistent with the organization’s mission 
• Monitor their effectiveness by quantifying focusing on results 
  (Note – this is not the same as creation or management or programs. Those functions are the responsibility of the executive director.)

 5. Ensure adequate financial resources to fulfill the organization’s mission 

• Coordinate efforts with the executive director, finance and development directors 

 6. Protect assets and provide proper financial oversight 

• Assist in the development of the annual budget 
• Monitor & review financial statements, reserve account(s), and endowment(s) 
• Ensure completion of annual audit (full or reviews)  - Address any issues found in a timely manner, annually 
• Review submission of IRS Form 990 (Return of Organization Exempt from Income Tax) 
• Ensure adequate financial controls are in place 

 7. Building a competent Board 

• Articulate prerequisites for board member candidates (job description, board packet, defined process for approval) 
• Encourage board and staff to refer potential candidates 
• Orient new board members 
• Periodically and comprehensively evaluate your own performance 

 8. Adhere to legal standards and ethical norms 

 9. Enhance the organization’s public standing 

• Be able to clearly articulate the organization’s Mission, Vision, Goals, and accomplishments to the public 
• Be open to attending meetings (city  council, state government,  networking) 

 10. Responsible for fundraising 

• Either with your time, talent, or treasure 
• Be open to attending to asks 

 11. Policies – understand them, ensure they exist, and are in the Board Manual. Including: 

• Conflict of Interest, for the Board & Staff 
• Whistle Blower policy 
• Investment policy, including asset allocation & restrictions 
• Gift Acceptance, for the Board, Staff and organization (what donations will not be accepted e.g. art jewelry?) 
•  Including: what and how much 
• Diversity policy 

Policies are necessary for the protection of the organization and the Board, and for fundraising. Large donors will ask for them. They want to know that their money is in good hands and will support the Mission, not a legal claim. 

It’s important to note that more and more non-profit organizations are using Charity Navigator to assist in their fundraising efforts. Donors are savvier than ever before. Charity Navigator provides donors with a “look behind the scenes” to learn what percentage of an organization’s funds pay for programs (v. administration). 
 
Additional Best Practices 
 
As you move through the various board and committee meetings throughout the year, here are a few best practices to keep in mind. 
 
The staff of the organization is essential to understanding trends, finance, legal updates and fundraising status. Be sure to have them (not just the Executive Director) sit in on board meetings and contribute to the conversation. 
 
When it comes to committee selection, I recommend that everyone serves on the Finance Committee for at least a year. Regardless of your business background, you will learn more about the inner workings of your chosen organization by serving on the Finance Committee than any other. 
 
And while we’re on the topic of finances, remember that the organization’s finances are similar to your own when it comes to mitigating risk. It’s important to ensure diversity of investments to avoid the impacts of economic shifts. 
 
Periodic reviews should also include assessing the effectiveness of the organization’s investment management firm, accounting firm, bank, law firm and any other trusted professional service providers.  
 
At first, all of this may seem a bit overwhelming. As a member of the board of directors of your chosen non-profit organization you are now a part of the group that’s responsible for the long-term viability of the organization. Like anything else, once you get the hang of it, it will become second nature. Just remember why you selected this nonprofit; how it feeds your passions. 
 
Enjoy your time on the Board! 

About the Author

​Jacki Lorenz, Co-founder & Partner

Jacki Lorenz is a co-founder and partner of Valtas Group. With 40 years in the business community, Jacki’s career has spanned Fortune 100 corporations to national financial institutions.

​After leaving corporate America, Jacki’s latest full-time non-profit endeavor was as the major gifts director at the Millionair Club Charity in Seattle.

Since joining Valtas, Jacki continues to contribute to the non-profit community through her legendary network, enabling her to connect non-profit organizations to the right resources.  She holds several non-profit board positions in support of her non-profit passion for Basic Needs.
 
Connect with Jacki here >

The content of this article is for general information purposes only. It is not intended to be accounting, tax, or legal advice. Consult with your attorney for specific recommendations for your circumstances.