Just like a for-profit company, a nonprofit relies on a board of directors to lead the organization and perform key functions to ensure they meet their goals. The only major differences between for-profit and nonprofit organization is a nonprofit does not pay taxes on it is income. A nonprofit should operate just like a business, but understanding its social impact. I like the term social enterprise rather than nonprofit. To grow and provide more services or funds year after year, a social enterprise needs to have excess revenue over expenses (income). While the roles and titles of board members in a social enterprise can vary widely, there are six vital responsibilities the board is tasked with.
Vision and Mission
Of all the responsibilities a board of directors has, this is arguably the most important. Having a clear and concise vision and mission statements will allow the entire organization to understand what their ultimate goals are and will allow them to keep any new initiative or project in line with them.
A strategic plan is a systematic process of envisioning a desired future, and translating this vision into broadly defined objectives and a sequence of steps to achieve the envisioned future.
Hire, supervise and review the Executive Director
The main focus of Chief Executive Officer is managing the day-to-day operations of organization based on the vision, mission and strategic plans and policies.
Friend and Fund Raising
A major responsibility of the board members is to develop friends of the organization, who could become committee members, board members, future leaders, and donors. Board members should be making gifts to the organizations on whose boards they serve.
Fiduciary and Financial oversight
The Board has budgetary responsibility. It projects the revenue and expenses in an operating budget. It has the responsibility to review the budget and financials on a regular basis. If the organization has reserve funds, the board acts as the trustees of the funds.
The board has the responsibility to set the operating policies of the organization with the help and input of the Chief Executive Officer.
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