Nonprofit Management - Choosing The Board

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					Nonprofit Management - Choosing The Board
So you have a pet cause and are thinking of forming a nonprofit, or have
recently done so. Whom do you invite to join your board? New public
charities are often founded by a group of individuals united in the same
mission. Environmentalists connect with green boards, teachers identify
with educational charities, creative types gravitate toward the arts, and
sympathetic souls align with humanitarian causes. Such camaraderie is
commendable but in their passion to make an impact, young boards often
lack the depth and breadth of skills needed to grow the charity beyond a
neighborhood periphery.
There were 845,233 public charities registered with the IRS in 2004, up
an astonishing 64.7 percent from just ten years earlier. Add private
foundations and that number topped 1.4 million registered charities in
If you got this far, you are familiar with Form 1023 and EIN, but what
happens when your charity starts to grow? All of a sudden you are hit
with a barrage of mysterious lingo -- NTEE Codes, D&O, 990, SOX, pro
formas, by-laws, quorums -- and you find this new vocabulary a little
different than what you and your friends discussed sitting around a
kitchen table when deciding to help victims of the latest catastrophe.
Nonprofit boards need members who have a whole lot more than just
enthusiasm for their cause. They need board members who have skill sets
in accounting, taxes, auditing, law, marketing, fundraising, event
management, grant writing, and more. Eventually you will retain
professionals in each of these fields, but you first have to reach a
level where you can afford these services. Most do not come cheap, and
while you can negotiate pro bono work, that sometimes only lasts for so
long before the provider expects remuneration for her/his services.
But even when you can afford the services of paid professionals, boards
need basic expertise in each of these areas. Contracting professional
services does not absolve the board of its fiduciary responsibilities.
For example, two-thirds of all charities have their 990 prepared by an
outside tax professional, so obviously the other third must be savvy
enough to do their own taxes, but perhaps not as obvious is that 100% of
all boards must know enough about accounting and taxes to scrutinize
their returns before mailing them to Uncle Sam, regardless of who
prepared them. Just how each of us is individually responsible for the
accuracy and timeliness of our own personal tax returns, the board is
ultimately responsible for the returns of its charitable organization.
Young charities do not necessarily need board members versed in all these
skills from day one; they can add them as and when needed, but the key
for young boards to heed is that they should identify their needs upfront
in order to prepare a board recruitment strategy appropriate for their
organization. This will enable them to know their requirements and timing
for expert skills, and allow them to recruit the correct talent when
necessary, thereby avoiding a board comprised of all "champions of the
cause" but lacking in these other vital competencies.
Dennis Abenanty is a Board Member of Brooklyn Ballet:
For more information on Dennis Abenanty, see his profile on Linked In: