Non-Profit Board Responsibilities

Serving on the board for a non-profit close to your heart is one of the best ways to get deeply involved and make a difference. However, there is a lot of responsibility that comes with being on the board. Legal, ethical, and moral obligations come into play when you are part of the decision-making process for a non-profit organization. You must consider the organization’s values while you seek to accomplish objectives, the mission statement, and various goals alongside the rest of the team. Whether you are familiar or clueless about serving on a non-profit board, this post is intended to acquaint you with the responsibilities.

Common Objectives of a Non-Profit Board:

• Set strategic objectives to be accomplished
• Create policies to guide the implementation of activities designed to assist the entity in meeting its strategic objectives
• Serve as content matter experts and a sounding board for the chief executive
• Hire the chief executive and monitor his or her progress toward meeting strategic objectives
•  Establish a governance process and assess its performance in meeting its objectives
• Assume responsibility for the entity’s compliance with laws and regulations and provisions of funding source agreements

(Source: AICPA: Serve on a Not-for-Profit Board? A Primer on Board Responsibilities)

Responsibilities of the Board:

1. Strategic. The strategies of the board should always be aimed at accomplishing the mission statement of the organization. These responsibilities may include large tasks such as hiring the CEO, devising the strategic plan, compensation of the executive members, and evaluating the board.
2. Legal. Failure to comply with the legalities of the non-profit can put the entire organization in jeopardy. The board must consider the duty of care, duty of loyalty, and the duty of obedience that is consistent with the federal and local laws of the non-profit (AICPA).
3. Fiduciary. A fiduciary responsibility always acts in the best interest of the other party. The reputation, financials, and assets must always be regarded in every decision of the board. Board members may be required to complete simple financial tasks especially if the organization is of a smaller composure.

While this is only a broad overview of the tasks and responsibilities of non-profit board members, there is a great return in being able to work towards bettering your community from the inside out. Of course, serving on a board comes with liabilities for failure to meet the regulations and responsibilities of a board member. However, if your personal drive is deeply invested in the mission statement of the organization, you should highly consider serving on a non-profit board. It is essential to be aware of the obligations of becoming a non-profit board member, but these organizations would not be able to function without the people that serve on them. SME CPAs is proud to say that several of our employees give back by serving on a few non-profit boards! It’s a lot of responsibility but the changes being made make it worth it.

For more information, read more in this guide.