The board of a charitable organization should include members with the diverse background (including, but not limited to, ethnicity, race, and gender perspectives), experience, and organizational and financial skills necessary to advance the organization’s mission.
Boards of charitable organizations generally strive to include individuals with expertise in budget and financial management, investments, personnel, fundraising, public relations and marketing, governance, advocacy, and leadership, as well as members knowledgeable about the charitable organization’s area of expertise or programs, or who have a special connection to its constituency. Some organizations seek to maintain a board that respects the culture of and reflects the community served by the organization. Boards are encouraged to be inclusive of and sensitive to diverse backgrounds when recruiting members, in addition to recruiting board members with expertise and professional or personal experiences that will be beneficial to the organization.
The full board is responsible for ensuring that the organization conducts its financial matters legally, ethically, and in accordance with proper accounting rules. To assist the board in fulfilling that duty, it should make every effort to ensure that at least one member has “financial literacy” — that is, the ability to understand nonprofit financial statements, to evaluate the bids of accounting firms that may undertake an audit or review, and to assist other members in using and interpreting relevant data to make sound financial decisions. If the board finds itself unable to recruit members with such skills, it should contract with or seek the pro bono services of a qualified accountant, other than its auditor, to assist it with its financial responsibilities.
Organizations should also consider the requirements of current and prospective funding sources regarding the composition of their boards. For example, some government grants require that a board’s membership include a specific number of representatives of the populations served by the organization.
Some private foundations wish to involve family members on the boards of their foundations to ensure that the donors’ philanthropic tradition will continue through future generations. If family members do not have the necessary expertise and experience to play the needed governance role, however, the board may wish to bring in advisors. Such boards should also consider the advantages of diversity and the perspective offered by representatives from outside the family.