Who is on Your Board?

Posted on Wednesday, August 04, 2021

The IRS believes that a well-governed organization is more likely to obey the tax laws, safeguard charitable assets, and serve charitable interests than one with poor or lax governance.  It also believes that an active and engaged board is important to the success of an organization.

So who is on your board?

It has been said in passing that an organization should have an attorney, a CPA, and someone with a lot of connections on the board and while these three individuals can benefit an organization, you need to assess each potential board member as an individual to determine what they bring to the board.

An attorney is a great asset to an organization with their knowledge and legal skills.  As a board member, an attorney can likely provide general advice; however, it should be clear as to whether the individual is serving as a board member or as the organization's legal counsel.  Attorneys must follow professional standards and be mindful of any potential conflicts of interest.  

Many times an organization will seek out a CPA to serve as the board treasurer.  However, just because an individual has a CPA license, does not mean that they understand nonprofit accounting.  Nonprofits have unique accounting requirements and depending on the CPA's area of expertise, they may not have any understanding of nonprofit accounting.  It is better for an organization to have a board treasurer that does not have a CPA license and has experience with nonprofit accounting, than one with a CPA license and no experience with nonprofit accounting.

If an organization's board of directors is truly independent and diverse, as it should be, members represent various backgrounds and professions.  As such, each will have their own group of connections that they bring to the organization.  These connections can help share the mission of the organization in the community, as well as become supporters of the organization.  While it's not necessarily a must to have a board member with a long list of connections, each board member should be active enough in the community to have connections that they can introduce to the organization.

A nonprofit should also seek out individuals to fill its unique needs.  For example, depending on the size of the organization, it may or may not have paid staff that perform marketing, fundraising, or HR duties.  If an organization does not have staff to handle these responsibilities, it may seek out individuals with these specific backgrounds and experience to serve on its board.  Or an organization may seek out experts related to its programming.  For example, Habitat for Humanity may recruit home builders or Super Shot may recruit doctors as board members. 

It is also important to have representation on the board for those that your organization serves.  Clients of an organization bring an intimate knowledge of the people served, how the services are utilized, and if they are effective.  Inviting clients to serve as board members provides value to the organization.

Many nonprofits use a board matrix to inventory the skills and expertise of their board members and to determine where there are gaps.  Be careful in only using the matrix to recruit new board members so that you are not just  "checking the box."  Each board member should be considered individually to determine what they bring to the organization.  Finally, all of your board members should be passionate about your mission.  Board members that are truly interested and care about your organization are more likely to devote time, talent, and treasure to your organization.

Contributed by: Carrie Minnich, CPA, MAcct | Director | DWD CPAs & Advisors

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.