What You Should Know Before Joining a Nonprofit Board (Part II)

By James V. D’Ambrosio

Building on the last column, the following are additional items to consider before joining a nonprofit board:

What is the organization’s financial status?  Ask for a copy of the agency’s most recent IRS Form 990, a detailed financial document nonprofits are required to file each year with the IRS and make available publicly (agencies with less than $25,000 income are exempt). In addition to revenue and expenditures, the 990 breaks out how funds are allocated and shows compensation for the highest paid employee(s), usually the executive director/CEO and top management.

What is the board size? In general, the smaller the board, the more will be asked of you. For example, an agency with 4-6 trustees is often associated with a young nonprofit with fewer resources, relying on trustees to help with the agency’s work. In contrast, an agency with 18-24 trustees likely indicates an established nonprofit, and will focus primarily on governance and strategic planning. And some nonprofits will fall in-between.

What committees does the board have? This is important. New board members are often asked to serve on a committee. Common committees include finance, nominating, development, program, communications/PR, and audit. Make sure to join a committee that aligns with your interests and experience.

Are there any ongoing/prior lawsuits against the board? You should know about  any legal issues — board members are only protected from liability if their actions are within the agency’s established boundaries. A lawsuit may indicate the board operates beyond its scope of authority. That said, there are many frivolous lawsuits of no consequence. So if there is a legal issue(s), understand it’s nature and decide if it’s really a problem.

This series is a general guide for prospective board members — not a comprehensive listing . What else do you think is important to know before joining a nonprofit board?

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