How Charity Boards Work

Responsibilities of Charity Boards

The primary responsibility of the board is to govern in the charity's best interest. It provides oversight and direction to a charity's paid staff. The board must also support the executives of the charity by providing regular and solid feedback. In other words, the board and the staff must always be on the same page (the mission statement outlines that page). And the board needs to provide the resources the executives need to run the organization on a day-to-day basis. They do this by generating and allocating funds.

As such, it's the board's responsibility to make sure the charity stays financially solvent -- that it pays its bills on time and follows through with promised pledges, for example. The board may conduct regular reviews of the budget as well as make any financial management policies or adjustments to those policies.

Moreso, the board must ensure that the charity is always compliant with state, federal, and other laws, especially fundraising, tax and nonprofit-specific laws. The board is ultimately responsible for the charity's performance; it merely delegates the execution of tasks to executives, which then answer to the board in the same way the leaders of a corporation have to answer to a board of directors or major stockholders.

Oftentimes, a charity board is responsible for generating fundraising ideas and determining how to execute them. The board is the financial and organizational brains, and its duty is to come up with creative ways to generate revenue, or, at the very least, to responsibly contract with professional fundraising organizations and then aggressively oversee their involvement with the charity.

Essentially, the board tries to anticipate, avoid or eliminate problems that are costly or legally entangling, so that the charity may pursue its philanthrophic goals uninterrupted.

Read on to see how charity boards are organized.