Donors want to be sure that the money they give is used honestly and effectively to carry out the organisation’s aims. They see a strong governing board as a safety net to protect the survival of your NPO.
Donors and the public usually have more trust and faith in organisations when:
- They are non-profit because board and staff do not take any profits the organisation makes.
- Board members are volunteers who do not gain financially from the NPO.
- The board has the vision and courage to lead and to respond to change.
The key roles and responsibilities of a board:
- Giving strategic direction
- Ensuring sufficient resources
- Oversight – monitoring financial, legal, ethical and performance issues
Here’s a list of some practical examples on how your board can fulfil its key roles and responsibilities to govern your NPO effectively:
Meetings & Decisions
- Prepare for and regularly attend board meetings
- Participate actively in meeting discussions
- Work together to make decisions on direction, resources and monitoring
Vision, mission, policies & strategy
- Understand and support the organisation’s vision, mission, policies and strategy
- Review the vision and mission
- Live out the organisation’s values
- Direct long-term planning
- Approve short-term planning
- Draw in views of relevant stakeholders
Ensuring Sufficient Resources
- Develop a fundraising plan
- Identify funding sources and build relationships with donors
- Understand and approve budget
- Recruit and support CEO or Director
- Ensure proper employee policies and staff development
- Recruit, orientate, train and assess board members
Back up CEO or Director
- Provide advice when requested
- Give expert help when needed
- Be an ambassador for the organisation
- Encourage community involvement
- Represent a community on the board
Monitoring Financial, Legal, Ethical and Performance Issues
- Develop and review budget guidelines and financial policies
- Check financial statements, and arrange for and approve annual audits
- Review financial procedures and controls
Legal & Ethical
- Develop and review policies on legal and ethical responsibilities
- Review legally required reports
- Have final responsibility on legal and ethical issues, including legal liability
Programmes & CEO/Director
- Ensure Director effectively leads the organisation
- Monitor services, programme performance and risks affecting the organisation
- Evaluate and give feedback on performance of CEO/Director
Your board taking overall responsibility for the NPO’s direction and affairs means:
- Having a duty to the public and donors to actively check and analyse your NPO’s activities, resources, finances and legal affairs.
- Being answerable to all stakeholders through annual financial audits and sharing information, for example, through publications, annual general meetings and websites.
- Reviewing your vision, mission and strategies to make sure you keep to your aims and use money for the purpose it was raised for.
- Having a legal responsibility to keep up to date with changes in laws and to ensure that your NPO is carrying out all its legal duties with donors and authorities such as government departments and tax regulators.
- Realising that not carrying out your legal duties can lead to serious consequences like the organisation losing its registration status or criminal charges against board members.