How Many Board Members Should My Nonprofit Have?
Though every organization needs a board, the nonprofit board structure varies from organization to organization. Even still, finding the most qualified individuals to fill these roles is critical to ensuring that your mission is in capable hands. With decisive leadership guiding the ship, you can stimulate growth within your nonprofit and spearhead a program that makes a substantial difference in the world.
Here is a glimpse of what we will be discussing around this topic:
- Why Does a Nonprofit Need Board Members?
- How Many Board Members Does a Nonprofit Need?
- How To Choose Nonprofit Board Members
- Final Thoughts
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Why Does a Nonprofit Need Board Members?
Any organization that wants to perform at optimum levels needs leadership. Among seemingly unending duties and responsibilities, these individuals make tough decisions, uphold nonprofit standards, and set goals to steer the organization toward success.
However, there are other reasons why nonprofit board member positions are a necessity for organizations:
Nonprofit charities are under the jurisdiction of state and national laws, so they must comply with both legal systems. With that in mind, the federal government requires a minimum of three board members to acquire coveted 501c3 tax-exempt status.
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As a basic rule of thumb, three is the magic number. However, some states may require a higher minimum, so always consult your regional laws to ensure that you are also meeting those expectations.
While the IRS does not impose any maximum limitations, an efficient range for many nonprofits is between eight and 14 members. Some organizations have as many as 20 or more, but this is not ideal because it is difficult to govern this many individuals.
How a Board Benefits a Nonprofit
In addition to ensuring legal compliance, the board serves many important leadership roles within your organization. Here are some ways that these members can help your nonprofit:
Planning and organizing: The board is responsible for drafting, maintaining, and enforcing your bylaws, articles of incorporation, and other vital documents. From hiring and training staff members to planning and hosting fundraising events, they run nearly all aspects of your organization.
Ensuring legal compliance: The directors are responsible for ensuring that the nonprofit is performing within the confines of the law in all aspects of its operation.
Managing resource acquisition and allocation: Officers ensure that the nonprofit has enough funds and resources. They also allocate them for maximum effectiveness.
Hiring the CEO: One of the most significant contributions from the board is the selection of the CEO as well as their salary and benefits package.
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How Many Board Members Does a Nonprofit Need?
What is an "ideal" board size for one organization may not be for another, as many factors come into play. Contemplate the following as you consider what size board is necessary for your nonprofit:
Legal compliance: First and foremost, maintain the minimum number of board members that both the state and federal laws require.
Essential roles: Decide what board roles are absolutely necessary. If you have several smaller roles, consider combining them into one position.
Balance: Remember that the more board members you have, the more projects you must maintain. Even though most boards are made up of volunteers, holding additional events and staffing them can affect your bottom line.
On the other end of the spectrum, too many responsibilities for a single officer, especially a volunteer, can quickly lead to burnout and turnover.
So, here are our suggestions for an appropriate board number:
Board Structure for a Small Nonprofit
For a new nonprofit, the primary concern is meeting the minimum board requirements. This generally means a board composition of three positions: president, secretary, and treasurer.
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The president serves as the board leader, or chair. They are mainly responsible for maintaining legal compliance and managing board behavior.
Nonprofit secretary responsibilities often include creating and distributing meeting agendas and keeping immaculate records. The board secretary job description is the most versatile within small boards, as this officer tends to wear many hats to ensure that the board and organization can perform at an optimum level. As a result, some nonprofits opt to budget a nonprofit secretary salary to reward this board member for taking on additional responsibilities.
The third requirement is the treasurer, aka the guru of all things finances. This valued officer prepares financial documents, establishes and maintains the budget, and ensures reporting accuracy.
If you can add a fourth board member, that person should fill the co-chair position. This versatility provides a suitable backup leader in case the chair is unavailable and offers another body to bounce ideas off of.
Note that while the nonprofit founder is generally a member of the board, they do not have to be the president. In fact, the founder does not even have to be on the board at all.
Board Structure for a Medium Nonprofit
Medium-sized nonprofits generally have more freedom to bring in additional roles, resulting in an average of eight or nine directors. These nonprofits may also have the budget to offer compensation, which generally results in greater commitment and less turnover.
With more board members, you can delineate and expand responsibilities. Here are some roles in which additional board members can prove helpful:
Board Structure for a Large Nonprofit
While small boards are typically called "working boards" because their officers spend more time actively producing outcomes for the nonprofit, large boards serve a less hands-on governing role. They often have paid board members with enough positions and committees so that they can focus on the "big picture," finding new ways to improve growth and awareness.
That being said, remember the axiom "quality over quantity." Too many directors can affect the bottom line, using valuable funds that your nonprofit could redirect toward the greater good. It can also be more difficult to achieve a quorum for voting with so many people involved.
Ideally, a large board should contain around 14 members to function properly, but use your discretion to make the final determination.
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How To Choose Nonprofit Board Members
Before you even think about the qualities that a potential board member possesses, first consider the individual’s passion for the mission. Does your vision align with their personal beliefs? Are they willing to go above and beyond for your cause?
If you answer "yes" to these questions, you can move on to determining if they meet the following criteria.
What Qualities Define an Effective Board Member?
Look for candidates who exhibit these traits:
Availability: No matter how effective and impressive the person may be, your organization can only benefit from them if they are around to perform their job.
Business skills: Someone who has in-depth know-how for the given role can prove more effective than someone who is learning the job responsibilities from scratch.
Motivation: All of the skills in the world can only do good if the person is motivated to make the best use of them. Seek out people who intend to set goals and follow through on them.
Integrity: Your organization’s reputation is its lifeblood, so you want to ensure that the people you choose for leadership are moral and just.
Adaptability: Leaders who are prepared to learn new skills can be invaluable for the long haul. They make useful mentors, wear many hats, and serve as examples for others.
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Who Should Not Be a Board Member?
Watch out for conflicts of interest. This means that anyone who can benefit personally, professionally, or financially from your organization should not be in a position of governance. This is crucial because if the IRS deems a board member as a person with a conflict of interest, you could lose your tax-exempt status.
Furthermore, anyone with a negative attitude or criminal history should not be a board member. Remember the values your organization holds dear — does the person who you are considering embody those virtues?
Pro Tip: Investigate a candidate before putting them on your nonprofit board of directors. You can hire an outside firm to conduct a background check for you.
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Ultimately, the number of board members you choose should correlate with the needs of your organization. If you can handle more officers without sacrificing your mission, it opens the door to more opportunities for growth.
However, be wary of having too many board members or board members who do not align with your organizational values. This can harm your reputation, damage your bottom line, and interrupt your workflow.
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💡How many board members should a nonprofit have?
It largely depends on the size of the nonprofit. However, the IRS requires a minimum of three board members for tax-exempt status. Find out more.
🔑 How does a nonprofit choose board members?
Look for board candidates who have passion, motivation, know-how, availability, integrity, and adaptability. Find out more.
📝 Why does a nonprofit need a board?
A board of directors is required for legal compliance, but it also has many benefits, especially in drafting policies and procedures. Find out more.