Questions to Ask Before Joining a Board
Have you been asked to join a nonprofit board? Before you say yes, here are some questions that you should ask and why.
Who are the current board members?
The IRS believes a nonprofit’s board should be independent and represent a broad public interest. Too many family or business relationships on a board could hinder its ability to act in the best interest of the organization.
What is the board term?
Most organizations have a set number of years that an individual can serve as a board member; however, some organizations do not have term limits. The bylaws of each organization determine the length of board service. It is important to know the length of term you will be serving before committing to the role.
When does the board meet?
The frequency of board meetings varies by organizations. A majority of organizations meet monthly with the exception of July and December, while other organizations meet quarterly. It is also important to know the time of day and day of the week the board meets to be sure that you can attend the meetings. Most boards have an expectation that members will attend a certain percentage of board meetings.
What is the time commitment?
Aside from board meetings, many boards require members to serve on at least one committee and attend all fundraising events. It is important to know how often these are held and when.
What is the financial commitment?
One of the responsibilities of board members is ensuring the organization has adequate financial resources. This includes making a personal contribution to the organization. Some organizations require that each board member donate a set dollar amount while others simply ask for a “significant gift.”
Does the organization have D&O insurance?
The board of directors is ultimately responsible for the organization. Directors and officers (D&O) insurance is not required but is common and necessary. D&O insurance protects against allegations of poor management decisions by the board.
Is the organization current on its payroll taxes?
Nonprofit organizations must withhold and pay payroll taxes like any other business. The proper recording of salaries and payroll taxes, along with timely remittance of payroll taxes is a key area of concern with the IRS. An organization that has not timely paid payroll taxes can be subject to penalties and any responsible person (board members) can be held personally liable.
When was the last time a strategic plan was done?
A strategic plan identifies goals of the organization and strategies to meet those goals. To make sure that the organization is advancing its mission, it is important that the organization has a current plan in place. In the past, a 5-year strategic plan was common; however, due to the ever-changing environment, a shorter plan is more useful.
Can I see a copy of the organization’s 990?
The organization’s 990 provides a wealth of information about the organization – finances, mission, programming, and policies. You will also be able to ensure that the organization is current on its required IRS filings.
Contributed by Carrie Minnich, MAcct, CPA | Partner | DWD CPAs & Advisors
Contact Us
"*" indicates required fields