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Five Things I Wish Every New Nonprofit Board Member Knew

best practices board finance foundation Oct 31, 2024
 

Have you invited someone to serve as a new board member in your nonprofit? Well, here are five things I wish every new board member knew before their first board meeting. These are some tips to prepare them for their new role. 

     I've served on a ton of nonprofit boards and when I had the opportunity to actually start a nonprofit, I knew to begin with the end in mind. I created a Governance Policy Manual and this document acted as a set of guidelines that defined how the organization would be run, how to ensure transparency and accountability, and how to make sure that proper decision making was done by the board and the staff. It also outlined the framework for operations. Well, this document is one of the most valuable investments I've made and I'm excited to share it with students in my Financially Thriving Nonprofit Master Course. You can learn more about this signature A to Z course here. 

     Serving on a nonprofit board is an honorable commitment, and when approached thoughtfully, it requires a significant investment of your time, your skills, and your resources. However, many new board members walk into their first meeting unsure of what to expect both from themselves and from the board experience. Surely there must be a better way to prepare for this important role. So here are some things you'll need to know to lead your nonprofit. 

5 Things Every New Nonprofit Board Member Should Know

#1 Organizational History

     Take time to learn about the organization's history, including its founding, its major milestones and its past challenges. Understanding this context will help provide valuable insights as you engage with its mission and vision. Here's some questions to get you started: 

  •  Who started the organization? 
  •  Why was it started? 
  •  Has the mission or leadership changed over the years? 
  •  What are some of the organization’s successes and failures? 
  •  How is this nonprofit viewed in our community? 

#2 Compliance History

     Familiarize yourself with the organization’s compliance history. This includes any legal or regulatory issues it has faced n the past. Knowing this background will help you understand any potential risks and the importance of governance in protecting the organization. Here’s some questions to help you do your homework before you take your seat at the board table: 

  •  Is the organization legally incorporated? 
  •  Does it have a 501c3 status? 
  •  Is the 501c3 status current and active?
  •  Has the nonprofit filed its Form 990 for this year? 
  •  Is it registered to solicit donations in your state (if required) and who handles that?

#3  How to Read Financial Statements     

    This is a crucial skill for any board member, but I find that a lot of new board members struggle with this. So, get comfortable with each of the reports and ask yourself this question: “Is there something I should know about the finances that's not clear from the financial reports?” This knowledge will enable you to contribute effectively to financial discussions and decision making. 

#4  Ask Questions

     Don't hesitate to ask questions during meetings and even between meetings. Whether you're seeking clarification on financial data or curious about the rationale of a strategic decision, asking questions shows that you're engaged and committed to the organization's success. I guarantee you there are no dumb questions! Creating an atmosphere in the boardroom where all questions are welcome will foster a culture of open communication and effective collaboration. 

#5 Understand Your Role

     You should clarify your responsibilities and the expectations of your role on the board. This includes understanding fiduciary duties, as well as many other things that may be required in the nonprofit you serve, such as fundraising or service on a committee. Ask those questions. Asking detailed questions about your role and knowing what's expected will help you to contribute more effectively and confidently. 

     By focusing your preparation on these key areas, you'll be better equipped to make a meaningful impact. As a nonprofit board member, your commitment to learning and involvement will not only enhance your experience, but it will also strengthen the organization that you're there to serve. 

     If you have a new board member or you are a new board member, I want to direct you to a whole Youtube playlist of videos in which I dive deeper into this subject called Financial Training For Nonprofit Board Members. 

     You can also visit my website for some additional resources, including my free Board Financial Literacy Assessment. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Serving on a nonprofit board is an honorable commitment that requires an significant investment of your…

 

  • Time
  • Skills
  • Resources

 

But all too often, board members walk into their first board meeting with little knowledge of…

 

  • What is expected of them
  • What to expect from their first board meeting
  • How to prepare for their new role

 

So, today I’m sharing five things I wish every board member would learn as they prepare for their first board meeting! Check out the full article/video here! 

 

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