This document discusses key questions accountants should ask before agreeing to serve on the board of a nonprofit organization. It recommends asking why the organization wants you to join, taking a tour to meet staff and get a sense of the culture and mission, understanding the organization's financial status and fundraising goals, and clarifying the board-level responsibilities and time commitment required. Asking these questions upfront will help both the prospective board member and the organization understand what to expect from the relationship.

1. 4 The PPC Nonprofit Update, april 2015, Volume 22, No. 4
Overboard on Board
Service
Eventually, at some point in the career of every
accountant or CPA, the invitation invariably arrives,
and it’s usually in the form of gentle persuasion from a
friend or business associate: “You know, we’re looking
for new board members for our not-for-profit organiza-
tion. You’d be perfect!” And in truth, accountants and
CPAs are very often an excellent and logical fit as board
members assuming that the mission of the not-for-
profit (NFP) organization speaks to them personally
and schedules and time commitments allow for board
service. However, before embarking on the journey into
board service, there are a few questions that should be
asked in advance so that both sides of the relationship
are clear.
Key Questions to Ask
Why Me? Board service, like any relationship, is a
two-way street. The organization has a need they are
looking to fill. In a healthy NFP, that need could be a
skill set that has been identified and is lacking at the
board level, or it could be a strategic decision to grow
the NFP donor base and the prospective member is
well-connected in the community. In exchange, the
prospective member gains the personal satisfaction of
working with an organization about whose mission they
feel strongly, as well as the prestige and recognition
that demonstrates leadership and credibility in the com-
munity. Regardless of the motivation, the foundation
of this relationship is honesty and understanding about
these expectations.
Can I Take a Tour? Nothing beats firsthand experience
when investigating a prospective NFP, so ask to take
a tour of the office to meet members of the execu-
tive management team and get a feel for the facility.
Engage the management team about the mission of
the organization and the general feeling about ethics
and transparency. The tone at the top established by
management coupled with management’s relationship
with the board will speak volumes about how the orga-
nization functions. Clear lines of communication in both
directions and an environment of openness and trans-
parency tend to indicate an organization that is aligned
and moving forward with a clear focus.
What Is the Organization’s Financial Status? This
question is a tricky but essential one, and the answers
will vary greatly. However, the cornerstone of most
NFP organizations is the classification as a tax-exempt
organization for purposes of federal taxes under
IRC Section 501(c). Ensure that the necessary filings
are up to date and that the organization has main-
tained its tax-exempt status. Further, inquire about the
additional legal documents (such as articles of incor-
poration, by-laws, charter, and mission statement) to
verify that these are in place and current. The corporate
documents should be reviewed at least annually. Lastly,
because board members have a fiduciary responsibil-
ity to the organization and donors, ask if the NFP has a
Directors & Officers (D&O) insurance policy and if it is
current.
What Are the Fundraising Goals and Financial Com-
mitment? Even though the organization is an NFP,
successful ones are still run like for-profit businesses. A
positive cash flow is needed to serve the NFP’s con-
stituency, pay the staff, and keep the lights on. To do
that, there needs to be a plan encompassing both the
short- and long-term strategic goals. Asking about the
fundraising activities to meet these goals will highlight
aspects of the strategic plan and vision of manage-
ment and the board; it will also identify shortcomings
in the strategic plan like overreliance on contributions
or a handful of donors. Part of the fundraising goal will
almost always be a personal contribution by each board
member. In fact, often when an NFP applies for grants
from foundations or other funding agencies, the grantor
will require near 100% participation at the board level
in terms of contributed support. It begs the question, if
the board isn’t willing to support the organization, why
should the grantor?
What Are the Board-level and Individual Responsi-
bilities? A staple of board service is collaborating on
committees within the board. Depending on the size
of the organization, there could be several committees,
the most common being governance, membership,
finance, investment, and audit. Ad hoc committees
come together for and disband after a short-term pur-
pose, but often, most committees are standing com-
mittees with members rotating on and off according to
schedule. As part of the time commitment to the NFP,
ask about committee collaboration and the extent of
that involvement.
Final Thoughts
This list is by no means exhaustive; in fact, in some ways,
it only scratches the surface. However, these questions
do serve as a jumping off point and dialogue starter
about what it means in terms of time and commitment
to service on a board. Use them and continue to ask
questions while determining if board service and the
prospective organization are a good fit.
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