Despite their motivation, so often, great civic-minded business leaders don’t understand their fiduciary role as nonprofit board members.
“Nonprofits are those organizations in the trenches doing good work, changing lives, making communities better,” said Mark McCrary, executive director of the Mississippi Center for Non-Profits. “An executive who wants to understand a certain section of the community, such as health or the arts, would do well to consider board service on an organization that is aligned with their interests — and not just to serve on a board to put it on a resume. A well-organized nonprofit with a professional staff will have systems to train board members, keep them informed and engage them in ways that they might not ever be able to do by themselves. One of our biggest compliments is when I have board members tell me they learned something about the nonprofit field at a board meeting.”
The biggest benefit that executives should gain from volunteerism is a sense of doing something positive for the community that they may not be able to do alone, he said.
When an executive calls the Mississippi Center for Non-Profits to inquire about serving nonprofits, McCrary recommends considering three things before making a decision:
Ability to make the time
Board members should actively serve on the board and on one committee. The leadership is critical here for two reasons: it gives them an opportunity to really understand the organization from a governance perspective and it allows them to become focused on one area through committee work. If an executive is serving on several boards and someone approaches him about a new board, he needs to really think about the time commitment and what he is trying to give to the organization.
The other side of that coin is, if an organization suggests they don’t have to give much time, that should raise a red flag because it is probably a “rubber stamp” organization, which compromises the board’s fiduciary responsibility.
Ability to give financially and ensure that the organization has adequate resources to do its job
Every board member of a nonprofit should be (or be prepared to be) a financial contributor, even if the organization doesn’t specifically have it in its by-laws. A personal financial contribution says a great deal about the organization’s leadership. Many funders ask how many board members give. If the answer isn’t 100% (of the board), then it suggests that board isn’t all that supportive of the organization. If the board isn’t supportive, why should a funder be supportive?
Focus on fiduciary responsibility
Every board member, no matter what station in life, should understand that service is serious business. They are ultimately responsible for the organization, making sure they follow by-laws and other legal documents. They also should be prepared to understand and follow regulatory mandates from both the Internal Revenue Service and the Mississippi Secretary of State. Financial statements are also a critical piece of the board’s oversight responsibility. Someone who has been asked to serve should have access to the organization’s 990s, budget and information about programs and services. The bottom-line here is making sure the board is aware of its responsibilities, given the tools to be responsible, and ask the types of questions that make them believe the organization is working toward its mission.
“Everyone should know it will take at least a year for a board member to get a grasp of the organization’s ebb and flow of programs, services and finances,” said McCrary. “It’s a very dynamic field and must rely on professionalism, commitment and sound management practices by both board and staff. And for goodness sake, a board is a group of individuals who have volunteered their time to ensure the organization is focusing on its mission, is financially sound and makes decisions for the good of those it serves.”
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.