Joining a nonprofit board can be an exciting opportunity to contribute to a cause you care about. However before saying yes, it’s important to consider what board service involves – both in terms of your time and financial commitment.

At Lumix CPAs and Advisors we help nonprofits navigate financial challenges and achieve long term sustainability. We’ve seen firsthand how important the role of board members is to the success of these organizations. If you’re thinking about joining a nonprofit board, here are five key things to keep in mind:

  1. Time and Responsibilities

Serving on a board requires more than just attending a few meetings a year. Be sure to ask how often the board meets, how long meetings last, and what kind of preparation will be expected of you. You may also be asked to attend fundraisers, community events, or other organizational activities.

Being a board member means taking on a leadership role. If you enjoy overseeing an organization and decision making, this could be a great fit. However if you prefer more hands-on work, being on a board may not be for you.

  1. Financial Commitment

Nonprofit board members are often expected to make financial contributions or participate in fundraising efforts. It’s important to know what level of support is required and whether you’re comfortable with that. Some companies offer matching gift programs, which can help reduce the financial burden. So make sure to check with your employer.

  1. Legal Responsibilities

Due to the important decisions board members have to make about the direction of the organization, you will have legal responsibilities. If the organization faces legal action, you could be held personally responsible for your role in its decision making. It’s important to check that the organization has Directors and Officers insurance to protect board members from personal liability. It’s also a good idea to consider adding a personal umbrella insurance policy for extra coverage.

  1. The Organization’s Financial Health

Before committing to a board position, take a close look at the nonprofit’s financial health. You should request key documents like the budget, profit and loss statements, and IRS Form 990. These will give you an idea of how the organization manages its finances. At Lumix CPAs and Advisors, we know the importance of having a clear view of a nonprofit’s financial stability.

If the nonprofit is reluctant to share these documents, it could be a sign of underlying problems. Transparency is key to understanding the organization’s ability to succeed.

  1. The Nonprofit’s Track Record

Finally, consider the nonprofit’s overall effectiveness in achieving its mission. Are they spending money wisely? Are employees fairly compensated? Is the board managing the organization’s resources well? It’s also important to see if the board is made up of individuals with the right skills and experience to lead the organization.

Understanding these factors will help you decide if the nonprofit is on the right path and if you can make a positive difference.

Is It Worth It?

Joining a nonprofit board can be a rewarding experience, but it’s important to weigh the commitment carefully. By doing your homework ahead of time, you’ll be better prepared to contribute to the organization’s success and get the most out of the experience.

At Lumix CPAs and Advisors, we support nonprofits and their board members in managing the financial challenges of running a successful organization. If you’re thinking about joining a board, we’d be happy to help you understand the financial health of the nonprofit and how you can make a difference. Contact us today. 

Posted in Board Member, Leadership, Nonprofit Accounting and tagged