Why the First Board of Directors for Your Nonprofit Is So Important
Questions and Answers About Your Founding Board
A nonprofit is a corporation and, just like its for-profit cousins, nonprofit corporations exist independently of the people who founded them. It is a legal requirement for a nonprofit to have a board of directors.
The state in which your nonprofit incorporates has standards for nonprofit boards. They usually include several "duties," such as the Duty of Care, Loyalty, and Obedience. Those duties involve the responsibility to make sure that the nonprofit follows nonprofit law, adheres to its mission, and stays financially stable.
Who Should Be On My Nonprofit's First Board?
Founding board members are very special. They usually know the people who started the organization and believe strongly in its cause.
The board might be made up of those people who were interested in your mission early on, or it could be a group of individuals who came up with the idea of the organization and worked together to get it started.
Either way, the founding board guides the nonprofit as it organizes as a not-for-profit corporation and applies to the IRS for tax-exempt status. Being on a founding board is hard work, so members need to be willing to give considerable time and energy to the organization. Those first board members may have to do a lot of the group's work and fundraise extensively.
How Many Board Members Does a Startup Nonprofit Need?
The state in which you incorporate will set the guidelines for the minimum number of board members.
A minimum of three is typical. The minimum number will be on your state's incorporation documents. The size beyond the minimum depends on the organization's needs.
Make a list of the tasks that need to be done and match your board members to those. Jobs and board members should be well matched so that everyone has enough to do, but no one is overwhelmed.
Should Board Member Terms Be Staggered?
Yes, staggering board member terms ensures that there is always fresh talent coming on your board.
If you start with, say, three board members, ask them to agree to staggered terms.
For instance, one could serve one year, one could serve two years, and the third could serve for three years. You will want to specify in your articles of incorporation and bylaws what the maximum term is for board members going forward.
What Skills Should Be Represented on a Startup Nonprofit Board?
This depends on your organization's mission. However, it is nice to have a mix of core competencies that could include financial, marketing, technical, entrepreneurial, legal, and social service skills.
Don't overlook the value of people who are not professionals, such as a parent of a child your nonprofit serves or a volunteer who is heavily involved in your work. Passion and commitment are just as important, if not more so than specific professional skills.
Skill should not be the only criteria for choosing board members. Peri Pakroo, in his book, Starting & Building a Nonprofit: A Practical Guide (Nolo), says that specific attributes are typical of a good board member, such as:
- Passion for the organization's mission
- Willingness to help with the practical work - the nitty-gritty of getting a nonprofit up and running
- Strong ties to the community which the nonprofit will be serving
- Adding diversity by age, gender, race religion and the willingness to work with diverse people
- Desire to help the nonprofit raise money
What Should Every Nonprofit Board Member Know About Serving?
That serving on a nonprofit board has serious fiduciary, legal, and ethical responsibilities. Board members can be held accountable for dereliction of their duties. They must avoid conflicts of interest and take an active part in decision making. The board hires the executive director and makes sure that he or she does not endanger the financial future of the nonprofit or engage in unlawful acts that could put the organization in legal jeopardy.
Board members are expected to help support the organization financially and to help raise funds. Board members must understand that they must be involved in fundraising. They can do this in many ways, from donating their own money, finding people who will give substantial amounts of money, to making personal pitches to major donors. Board members who shy away from personal contact with potential donors can still help by making phone calls, writing thank you notes, or hosting fundraising events.
Board members need to understand the difference between the responsibilities of the board and the staff. They will need to walk a fine line between being appropriately involved and interfering with the staff.
For instance, the board sets policy, and the staff implements those policies. The board hires the executive director, but the ED employs and supervises the rest of the staff and runs the organization.
To make sure that the board runs smoothly, the first board members should set up a nominating committee whose job will be to find new board members to both expand the board and to fill open positions as they come up. Other committees should include a finance committee to ensure that the organization stays solvent and a development committee to work on fundraising.
An excellent founding board will not micromanage the staff, but concern itself with stabilizing the organization financially and using each board member's contacts to broaden the nonprofit's reach and influence.