This series of blogs are dedicated to the steps needed to set up a nonprofit corporation. It includes steps on applying for tax-exemption with the IRS. The next steps will be included in upcoming posts. Some items are Texas-specific; please contact us to get help in your own state.
Step 3: Recruit Directors
Serving as a director for a nonprofit organization is an important role. The members of the board of directors are the governing body of your nonprofit and are legally accountable for its actions. They are accountable to the public, to your supporters, and to your beneficiaries to oversee the accomplishment of the organization’s purposes.
What Do Directors Do?
Among other items, the board of directors is entrusted to:
- Determine the organization’s mission and purpose.
- Provide proper financial oversight, including budgeting, planning, making sure finances are secure.
- Ensure adequate resources.
- Ensure legal and ethical integrity and maintain accountability.
- Select the chief executive and decide her role.
- Ensure effective organizational planning, including making sure programs are in place to further the mission and goals of the organization.
- Recruit and orient new board members and assess board performance.
- Enhance the organization’s public standing.
- Determine, monitor, and strengthen the organization’s programs and services.
- Support the chief executive and assess his or her performance.
Who should serve as a member of the Board of Directors?
For a board to excellently serve the community, it should to be made of people from diverse backgrounds and perspectives, with relevant experience and expertise based on the work and mission of the nonprofit, with the networks to achieve financial success for the nonprofit, and with a willingness to give it their all.
Whether your nonprofit organization is just getting started and establishing an initial board of directors, or if your organization is more established and you are filling board vacancies, the same principles apply. Each person serving as a board member needs to bring value in addition to passion for the cause.
Ideally, board members will possess a certain level of business or organizational competency. They should be strategic thinkers. They should always understand that their role is to set guiding principles for the organization – to help set the mission and establish programs to fulfill the mission. They should not have a conflict of interest concerning management and other key personnel. They should have backgrounds that differ from but complement those of other directors. They should be willing to meet and exceed the required time commitments.
Note: In Texas, you must have at least three directors for your nonprofit corporation. Directors do not have to reside within Texas.*
*Texas Business Organizations Code §22.204(a)
This series of blog posts describes ten steps to set up a nonprofit organization:
1: Make a Plan
6: Draft Bylaws
The Cullinane Law Group‘s favorite work is setting-up new nonprofits. We work with the founders to make their visions come alive. We create strong and legally compliant nonprofits that have solid bases for long-term success. We help nonprofits, foundations, religious organizations, and social entrepreneurs throughout the United States who seek to create positive change. Please contact us when you are ready to start a new nonprofit.