Issue 22: 2012

We Want You: On Joining the Board

If a nonprofit organization invites you to join its board, be sure to do your homework before saying yes. That means asking plenty of questions — like these.


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Serving in a leadership role for a nonprofit organization can be one of the most fulfilling and memorable contributions you can make in your personal or professional life, an opportunity to lend your expertise to a cause that is dear to your heart. In fact, many of those who contribute their money to charitable organizations also contribute a significant amount of their time as volunteers.

But before you decide to accept a board position, we believe that it is prudent and practical to take a careful look at the requirements and responsibilities of a board member. If you have already accepted a board position, learning about the nonprofit should be your personal objective during the ?on boarding? process, helping you to get started in making a meaningful contribution.

How are board members nominated and selected?

We have developed a set of questions that a prospective or incoming board member should ask. These questions center around four key areas: mission and programs; financial status; board structure, member qualifications and responsibilities; governance, administration and legacy.

Each of these areas presents both opportunities and potential risks for the organization and its board of directors. By navigating these areas of responsibility with care, members of the board can provide leadership to the charitable organization to advance its mission and preserve its legacy.

Mission & Programs

Clearly, the board of directors is responsible for supporting the organization?s mission by providing leadership while overseeing the direction and effectiveness of its programs, since these are the most visible evidence of the benefits the organization provides. It?s not enough to fund programs — good stewardship of the nonprofit?s assets requires careful assessment of the benefits and impact provided to those they serve.

  • What is the organization?s mission?
  • How do the organization?s current programs relate to its current mission?
  • How does the group fund its programs?
  • How does the organization evaluate the effectiveness of its programs?
  • Does the organization have a disciplined strategy to revise or eliminate ineffective programs?

Financial Status

Since funding current programs and grants requires ongoing financial support, other key questions focus on the organization?s sources of income, and the prudent practices around managing the investment portfolio.

  • What is the organization?s spending policy? Is any endowment restricted? Is there a formal investment policy?
  • Does the investment committee balance prudent spending for today?s generation with preservation of portfolio value for future generations?
  • Is the nonprofit meeting operating budget goals?
  • How would it deal with a deficit?

Structure, Qualifications, Responsibilities

Careful attention to board structure, board policies and self-governance makes it more likely that the organization can continue to identify, attract and retain active and engaged board members.

  • How is the board structured?
  • How are board members nominated? Are their roles and responsibilities clearly defined?
  • How are committee assignments made, and what are the expectations and time commitments for each?
  • Does the board conduct an annual self-assessment?

This last question may be the most critical, since so much responsibility is entrusted to the board of directors. Leadership is crucial to an organization?s success, and a wise board should apply the same test of effectiveness to its leadership that it applies to its programs. This helps to demonstrate the board?s commitment to prudence and care in the exercise of its duties.

Governance, Administration, Legacy

The issue of governance — the principles and practices that guide a group?s actions — sometimes may be given less attention than it deserves, especially when long-standing policies and procedures have not been reviewed or updated for years. This situation brings significant risk, especially when an incident becomes public and the organization faces the threat of damage to its reputation.

Such damage, including the loss of key personnel, can have significant short-term consequences, such as the diversion of time, energy and resources to dealing with the problem at hand, resulting in a loss of focus on the mission and consequently a loss of revenue. Longer-term consequences may include the need to redevelop trust in key relationships, a decreased ability to attract donors and even damage to the organization?s standing and legacy.

  • What process is in place for reviewing governance, operations, investments and grant making to ensure that these activities comply with prudent policies and practices and industry standards? Does the organization conduct a formal periodic review of its regulatory and fiscal management policies and procedures?
  • What procedures and systems are in place to prevent conflicts of interest and other ethical problems at all levels of the organization, including the board and staff, beneficiary organizations, investment staff, donors, vendors and other constituents?
  • What programs are in place to engage board members in the cultivation and stewardship of key donor and community relationships?

Before You Say Yes. It?s clear that while board membership can be rewarding, it is a responsibility that requires a great deal of consideration and preparation at the outset. By examining a prospective philanthropic organization according to key areas of responsibility, with an eye toward mission, governance, administration and finance, potential board members (and new board members) can be more confident in their decision to accept the opportunity of philanthropic board membership.


Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.