Nonprofit Boards vs. Committees. Why are you confused?

The most asked question I get from nonprofit organizations (501c3 and c6) is about Boards versus Committees.  There is a hard division between the two, yet this visible line is crossed almost daily.

I am starting a series of blogs regarding the differences.  Today is about What is the job of a Board of Directors?

Let’s start with nonprofit Boards of Directors. What IS their job? GOVERNANCE. Oh, and GOVERNANCE.  Unknown

This includes all legal and financial responsibility and hiring/firing of the top level executive, such as an Executive Director of a 501c3 or President/CEO of a 501c6.

A Board can consist of no less than three (3) elected or appointed members and should not be more than fifteen (15). I say that because even getting fifteen people to decide on ONE thing can be difficult! A good Board should be around ten (10).

They are the vision and planners for the organization moving forward. They are the only voting group of people for an organization (more on that later). They are the first line of defense for the support of their paid leader (Executive Director or President/CEO). They set goals for the organization. They are responsible for creating an annual budget for their nonprofit and making any changes throughout the year (financial accountability such as listed in Sarbanes-Oxley 2003).

The Board is held to a high lawful standard that includes confidentiality, knowledge of Anti-Trust, conflict of interest, diversity, and additional nonprofit compliance rules and regulations. They keep an accurate accounting of the agendas and minutes of the Board meetings, review and update, if needed, the Bylaws or GOVERNING DOCUMENT, and prepare — either as a unit or with the top paid leader — all policies of the nonprofit. (Legal responsibilities)

They vote on the committees, assignments, motions for mission-involved movement, to hire and/or fire top level paid employee(s), meeting dates, times and locations, insurance and banks — including which ones to use. They fundraise when needed, they gather new and retain current members (501c6). They continually receive training and make sure their top paid executive does as well.

This group of people are on file with both the State in which the nonprofit is organized (Secretary of State and Attorney General) and with the IRS. These are THOSE people.

Next up will be What Does a Committee Do.  Stay tuned!

~ Sally

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