Building a board

What the board is for

The board of directors holds final legal responsibility for the nonprofit. It sets direction, hires and oversees the executive, approves the budget, and makes sure the organization follows the law and its own mission. Directors owe the organization three duties.

• Care. Pay attention, read the materials, ask questions.
• Loyalty. Put the organization's interest ahead of personal interest.
• Obedience. Keep the organization within its mission and the law.

How many members

Many states require a minimum of three directors. Small organizations often start with three to seven. The IRS asks on Form 1023 about board composition and relationships among directors, and a board made up mostly of one family draws closer scrutiny.

Who to recruit

Look for people who bring a skill the organization needs, such as finance, law, fundraising, or lived experience of the problem you are addressing. At least one director should be comfortable reading financial statements. Independence matters. Directors who are paid staff or related to paid staff should be a minority.

Officers

Most bylaws call for a president or chair, a secretary who keeps minutes and records, and a treasurer who oversees finances. State law may require specific officers or prohibit one person from holding certain roles at once.

Policies to adopt early

Form 1023 asks whether you have adopted a conflict of interest policy. Adopt one at the organizational meeting. Consider also a whistleblower policy, a document retention policy, and an expense reimbursement policy. Directors and officers liability insurance is worth pricing once the organization holds any assets or has staff.