What are Nonprofit Board Responsibilities?

The article provides information on the legal and financial aspects of the activities of nonprofit board responsibilities (including tax regulation and methods of raising funds for activities).

The Main Nonprofit Board Responsibilities

In developed countries, the third sector of the economy is in constant development, and non-profit organizations are an important subject of social and economic activity. The UN Department of Economic and Social Affairs has identified several distinctive features that justify the reasons for separating non-profit organizations into separate sectors. The characteristic features of non-profit organizations include non-profit nature, management structure, income structure, staffing, legal regime, and others.

The main nonprofit board responsibilities are:

  1. Ensure Adequate Resources.
  2. Determine the Organization’s Mission and Purpose.
  3. Provide Proper Financial Oversight.
  4. Recruit and Orient New Board Members and Assess Board Performance.
  5. Select the Executive Director.
  6. Enhance the Organization’s Public Standing.
  7. Support the Chief Executive and Assess His/Her Performance.
  8. Ensure Effective Organizational Planning.
  9. Determine, Monitor, and Strengthen the Organization’s Programs and Services.
  10. Ensure Legal and Ethical Integrity and Maintain Accountability.

A retrospective look at non-profit organizations emphasizes the influence on their development of the peculiarities of cultural, social, and political processes taking place in the country. The prototype of non-profit organizations can be considered charity based on the church, which for a long time played an important role in the lives of people. Religious statutes were the primary means of regulating charitable activities.

Nonprofit Board Organization. What to Pay Attention to?

Today there are a lot of examples when initiative board groups that work stably and successfully, make big plans for the future, and have every reason to form a non-profit organization avoid legal registration. Why? People are afraid of legal issues, numerous difficulties, which are rather difficult to overcome without the help of a professional lawyer. Those who have already embarked on this path and registered a non-profit organization know: yes, it is difficult, yes, you need to know a lot of subtleties, but this is a feasible task, you just have to drop your fears and start. You need to start with the “minimum program”.

The requirement for keeping records of all organizations is established by the legislation. What categories of documents should the nonprofit board leader pay attention to?

  • Notifications of registration with extra-budgetary funds, of the possibility to apply a simplified taxation system, and others; provisions: on the audit commission, on membership (if provided by the charter), and other internal documents, the presence of which is provided for by the charter of the organization.
  • Protocols and decisions of governing bodies: for example, on the election of governing bodies, on participation in competitions for state support, etc.
  • Labor documents: staffing table, orders for appointment to a position, orders for vacations, employment contracts, personal cards of employees, etc.
  • Civil documents: contracts with counterparties (individuals and legal entities), acts on the provision of services, etc.
  • Accounting and tax reporting: balance sheets, tax returns, reports to off-budget funds, etc.

Documents leave no room for knowledge. The difference between what is reflected in the documents, which were based on certain ideas about what is happening, and the actual state of affairs, can be great. Documents are usually static and quickly become out of date. If you regularly submit monthly reports, this still does not give reason to omit anything in the annual report. If management thoroughly knew and understood the monthly reports, they would not need annual reports.