Become Familiar with These 501c3 Board of Directors Requirements Before You Launch
The Board of Directors’ role in a nonprofit is to provide a support system for the organization’s vision and mission. The Board of Directors’ duties can vary to fit the organization’s needs, but typically their oversight includes financial and donor management, organizational guidance, and the evaluation, hiring, and termination of executive directors and senior-level administrators.
While a 501c3’s Board of Directors’ requirements may vary depending on the state (or states) an organization operates in, a few rules are somewhat universal. These include:
- Having a minimum of three members not related to one another by family or marriage.
- The positions of President, Secretary, and Treasurer are elected by board members.
Be sure to check with your state’s specific guidelines for the Board of Directors’ duties to ensure compliance.
What Is the Role of the Board of Directors?
Before moving forward with incorporations and obtaining tax-exempt status, nonprofit entrepreneurs should understand their Board of Directors’ duties. This knowledge is vital to the long-term success of your organization. While every organization and Board is unique, there are general guidelines about a nonprofit board’s role that new nonprofits should follow.
The Top Five 501c3 Board of Directors Requirements Your Nonprofit Needs to Follow
- Uphold the nonprofit’s mission statement. Your organization’s mission statement defines your focus and scope. One of the primary duties of the Board of Directors is ensuring the mission is followed and that changes to it are discussed and voted on.
- CEO or Executive Director relations. Another primary role of the Board of Directors is overseeing the hiring and effectiveness of the organization’s Executive Director or CEO. This can sometimes be an uncomfortable position for first-time nonprofit entrepreneurs because the Board is legally obligated to ensure the CEO or ED slot is held by a person who can uphold the position’s responsibilities. While a Board removing a founder is rare, it can and does happen!
- Fundraising and Overseeing Financial Stability. At most start-up nonprofits, Board members must make financial contributions or actively help in soliciting monetary donations. Having Board members who can make corporate sponsorships or in-kind gifts, such as professional services or donations of tangible goods, is also valued. In addition, the Board of Directors’ duties also includes the regular review of the organization’s financials and balance sheets. This responsibility helps provide fiscal oversight and maintains the organization’s stability in the community.
- Adherence to Legal Regulations and Removing Conflicts of Interest. Another requirement for a 501c3 Board of Directors is ensuring the organization follows all ethical practices and legal regulations. Board members are strictly prohibited from using their influence for the betterment of their personal interests and ensuring any conflict of interest is addressed and, if possible, removed.
- Promote the Organization. While being on a nonprofit Board may seem like a great deal of work, there are some Board of Directors’ duties that are fun and exciting! Having a Board that enjoys promoting your organization’s positive public image helps to establish trust in the community you serve and can attract donors and volunteers.
Developing A Nonprofit Board of Directors
As you’re crafting your nonprofit strategy, paying close attention to the role of the Board of Directors and finding the right board members for each position helps ensure long-term effectiveness. While there aren’t any hard-and-fast requirements for establishing a 501c3 Board of Directors, we have a few suggestions to get started:
Four Suggestions for Organizing Your Board and Outlining Individual Board of Directors' Duties
- Designate each member’s role on the Board of Directors. This is similar to having a job description. Outlining what is expected of each Board role can help select people best qualified to fill the seat.
- Developing and following bylaws. Some states require all registered nonprofits to have a set of bylaws that govern the operation of the Board and the organization. Even if the state you’re registered in does not have this requirement, it’s a sound practice to follow. Bylaws help ensure that rules exist to govern all decision-making the Board undertakes.
- Advance your nonprofit’s mission. While Board members with specific skills are essential, so too are Board members that are passionate about your organization’s goals and mission.
- Attend to conflicts of interest. A Board member will not be able to uphold their ethical and legal responsibilities if personal or professional conflicts of interests exist. Therefore, it is crucial for nonprofit founders and current Board members to carefully vet potential or existing conflicts when reviewing incoming board members.
What Are the Board of Directors' Duties for Electing Officers?
While each state may have different regulations pertaining to requirements for a 501c3’s Board of Directors elected officers, typically, there are three elected officer positions on each nonprofit Board. Each elected officer position should be referenced in the organization’s bylaws along with their responsibilities. Note that in some states, the same person can hold two or more elected offices.
Nonprofit Board Elected Officer Positions
Board President. Duties of a nonprofit board’s President include having authority over responsibilities such as signing contracts and hiring (or terminating) senior-level employees.
Board Treasurer. The duties of a nonprofit Treasurer involve evaluating and offering advice on the budgeting and financial health of the organization.
Board Secretary: Duties of the Board of Directors Secretary may include organizing and scheduling Board meetings, communicating with Board members about meeting schedules and agendas, and recording and distributing minutes or notes from each meeting.
Trust BryteBridge to Help You With Your 501c3's Board of Directors Requirements
Forming your Board of Directors will help with everything from fundraising to marketing and public relations to hiring staff. When you have questions about how to best fulfill your nonprofit leadership goals and roles, contact BryteBridge Nonprofit Solutions. We’ve helped thousands of 501c3 organizations create their Board of Directors who support and collaborate in ensuring an organization’s mission and purpose. We look forward to hearing from you!