Should You Join a Nonprofit Board? Investigate Before You Make a Decision

Abstract

It is considered an honor to serve on the board of a nonprofit, whether it be an educational institution or another type of organization. But, as in most everything else in life, it pays to do your homework. First and foremost, be sure that you have the time to devote to service on the board. Bear in mind that attendance at board meetings is (or should be) only the half of it. Board members frequently are appointed to committees, and those committees meet and do a fair amount of work apart from the formal meetings of the full board. It goes without saying that you should strongly support the mission of the institution whose board you join and be willing to devote time, energy, and resources (often financial) to it. As much as you think you may know about the nonprofit on whose board you wish to serve, there is an online resource that can help you learn about it, especially its financial status. The website of Guidestar.org offers free access (after registration) to an online search engine that supplies information on nonprofits. Especially helpful is the link to the Internal Revenue Service Form 990 that nonprofits file each year. A close look at this online information, and scrutiny of the 990s from past years to the present, will give you an excellent picture of the financial situation, the salary structure, and the philanthropic profile. For instance, if you look at two or three 990s before the most recent one and can do some basic calculations, you can calculate the burn rate of an institution. If it seems that the nonprofit's administration is burning through the cash and not replacing it with donations and other revenue sources, a red flag should go up. It may be time to think carefully about joining the board of a mismanaged organization. It also pays to investigate the current administration of the nonprofit. News reports in recent years have been rife with accounts of financial shenanigans and sometimes outright fraud by higher-ups in nonprofits, an area of corporations that the government used to all but ignore. That has changed, and every year or so an eminent organization finds itself in the throes of financial difficulty or scandals that may even become criminal in nature. Meet with members of the administration and gauge their trustworthiness, business acumen, and track record. Ask about how regularly the meetings are held, inquire about term limits (a best practice that some too-cozy nonprofits ignore), and insist upon a full disclosure of all pertinent details. After all, if your service is being solicited, you have the right to know and the absolute duty to inquire. If you receive no cooperation in your inquiries, gracefully excuse yourself and vow not to contribute to that organization again! If your investigation turns out more positively, be sure to ask these questions: Does the board have a conflict of interest policy? If so, how is it policed and enforced? What type Editor’s Note: