The 5 Most Important Questions To Ask Before Joining A Nonprofit Board
Have you been asked to join a non-profit board? Do you feel like you don’t have enough information to make an informed decision about whether to join? You're not alone. Board responsibilities are often poorly communicated or misunderstood. And many nonprofits do not provide adequate information about the organization—including financial information, organizational impact or board governance. Before you take on the responsibility of board membership, you need to understand the financial health of the organization, the efficacy of its work, and the responsibilities you will have as a board member.
What questions should you, as a prospective board member, ask? Below are five of the most important question to ask the Board Chair.
1. What are my responsibilities as a board member?
Board members are the fiduciaries who guide a nonprofit by ensuring legal and ethical governance and sound financial management policies. Board members approve annual budgets, evaluate financial policies, and review financial reports to ensure the organization has the resources to implement the mission. However, nonprofits utilize board members in different ways and require different commitments. To better understand what is required, ask to review the board’s commitment letter and be prepared to ask the following questions:
· How often do you meet, and do you meet in person or virtually?
· What is the term length of board members?
· What is the fundraising responsibility or financial commitment of board members?
· If the nonprofit is an international organization, are board members required to do an on-site visit or participate in an annual retreat?
· Are there committee responsibilities? If so, about how much time per month is required of committee members?
2. What are the most important policies that govern your board?
Board bylaws serve as the organization’s operating manual. They define the size of the board and how it will function; rules and procedures for electing directors, holding meetings, and appointing officers; roles and duties of directors and officers; and other essential governance issues. Prospective board members can review bylaws to understand the governance structure and identify:
· Limits to personal liability of board members.
· Board term lengths and term limits.
· The conflict of interest policy.
· What committees exist, how members are appointed, and their responsibilities.
· How the bylaws can be changed.
3. Could you provide a snapshot of your finances?
It is important to understand the financial health of an organization before joining a board. A balance sheet, or statement of financial position, will provide a snapshot of the finances and will outline the assets, financial resources, debts and any other liabilities. In addition to asking for a balance sheet, prospective board members should ask:
· How many months of cash does the organization have?
· What are the main sources of revenue?
· Is the organization’s revenue reasonably diversified?
· What are the largest organizational expenditures?
· What financial tracking mechanisms are in place?
· What is the role of the Board Treasurer and the Finance Committee?
- Does the organization conduct periodic financial audits by an outside auditor?
4. What is the organization focused on for the next 3-5 years?
Prospective board members should understand the organization’s priorities and strategies. A 3-5 year strategic plan will provide prospective board members with a clearly articulated strategic direction and will define the impact they aim to achieve. The strategic plan, which should have a parallel financial plan to support growth, should include:
· A clearly defined mission, vision and value statement.
· A SWOT analysis, delineating organizational strengths, potential challenges, and external opportunities and threats.
· Specific goals and objectives, accompanied by financial projections.
· An organizational dashboard to monitor progress against established metrics.
5. How do you define your impact?
Many organizations perform valuable, mission-driven work. However, organizations often fail to create frameworks for measuring their impact. Prospective board members should understand what the organization aims to achieve, how they measure outcomes, and whether those outcomes demonstrate an effective approach. The questions prospective board members should ask include:
· What organizational and programmatic outcomes do you track?
· How do you know your approach is more impactful than organizations with a similar goal?
· How is your data used to improve your work?
· How do you communicate your evaluation findings with similar organizations?
In addition to asking these questions, it’s helpful to meet and talk with current board members. Conversations with board members will provide further insight into organizational culture as well as the board's vision for the organization’s future. Informal conversations with board members will help inform your decision beyond just policies and bylaws and help determine personal fit.