A little known, but vital fact: a Board member’s personal assets are at stake if a non-profit organization fails to pay its federal employee taxes. Even more concerning – donors can sue trustees for alleged misuse of gifts, grants, or assets.
An ounce of prevention is worth a pound of cure. Before joining a charity Board, do a small amount of homework to gain insight into the organization.
Five essential questions to explore before joining a Board:
1. Is there a stated shared vision between the Board and the Chief Executive?
2. Do the organization’s bylaws make it clear day-to-day operations are the responsibility of staff, not the Board?
3. Does the organization have a current Strategic Plan, and is that plan being followed?
4. Do Board members sign a Conflict of Interest Statement annually?
5. Will the organization provide you with Directors’ and Officers’ insurance coverage?
Extra Credit: Review past Board meeting minutes and up to three years of financial statements, tax filings, and financial audits with accompanying management letters.
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