Joining a Nonprofit Board? | RKL LLP
Posted on: September 3rd, 2014

Five Practical Questions to Ask Yourself before Joining a Nonprofit Board

Board service is a serious commitment that requires careful consideration.

Board service is a serious commitment that requires careful consideration.

Serving on the board of directors for a community benefit organization can be a very rewarding experience. For most, the investment of time, talent and treasure pays dividends in the satisfaction that comes from contributing to the greater good. However, as with any arrangement that will require your time and attention, it’s only practical that you have a clear picture of what to expect as a volunteer leader of any organization.

Considering a nonprofit board? A little due diligence can go a long way in matching your expectations with reality. Here are a few questions you’ll want to address:

  1. Does the organization’s mission and vision “jive” with me on a deeper level? The best board members are those who have a genuine passion for seeing the mission of the organization fulfilled. Take the time to do your homework and review the organization’s mission and vision carefully to clarify its ultimate goal and how the organization views itself in the community.
  2. Is the organization financially sound? As a board member, you have a fiduciary duty to the organization. Ask to review the audit and management letter of the most recent tax year as well as the current Form 990. If the organization is showing losses, you should inquire further: What is the nature of the losses? Does the organization have a strategy in place to stem these losses? What are the requirements of board members as it relates to fundraising?
  3. Are you expected to make a financial contribution to the organization? This may be the most uncomfortable question on the list, but it makes sense to enter into your board service with eyes wide open. Today, many organizations have a minimum expected financial contribution for their board members, ranging from as little as one dollar to thousands of dollars. If you don’t have the financial means to give to an organization, make that clear upfront. Most organizations will not turn away volunteer time and will find other ways you can contribute to the organization.
  4. What is the expected time commitment? Set up a meeting with the executive director and the board president to make sure you understand your expected role and the time commitment that it requires. How frequently will the board meet? Will you be expected to join a sub-committee? Is volunteer time expected?
  5. Is the board covered by insurance? Nonprofit boards should carry Directors and Officers Insurance – often called “D&O.” This insurance is offered as protection against a breach of duty by the directors and officers. D&O will pay for actual or alleged wrongdoings such as employment issues, failure to provide services and mismanagement of assets. D&O does not pay for bodily injury or property damage. Volunteer service is not a defense for improper acts.

Take the time to do your homework before making a commitment. Doing so will ensure a mutually rewarding experience for all involved.

To learn more about RKL’s wide range of services aimed at helping community benefit organizations succeed, visit our Not-for-Profit Services Group or contact Douglas L. Berman, CPA, at (717) 843-3804 or dberman@rklcpa.com.

smallContributed by Ruthann J. Woll, CPA, a manager in RKL’s Tax Services Group and member of our Not-for-Profit Services Group. Ruthann has 17 years experience in tax planning and compliance and specializes in serving individual and not-for-profit clients. 

 

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