Nonprofit Board of Directors: Structure, Roles & Responsibilities (+ a Free Checklist)

Let’s picture Jessica, for example, who started Bright Futures with a clear mission: to offer after-school programs for underserved communities. To legally incorporate, she recruited close friends and family as the nonprofit board, who believed in her vision but lacked any governance experience.

On paper, Bright Futures had a board. In reality, they had a shaky foundation. Within the first few months of incorporation, the organization began struggling with compliance risks, unclear financial oversight, and decisions that were consistently delayed.

The problem wasn’t a lack of passion, but rather a lack of proper governance to turn that passion into a sustainable impact.

Setting up a nonprofit board isn’t just about gathering people who care about your cause. It’s about building a leadership structure that holds your mission accountable, ensures financial transparency, and guarantees your organization thrives beyond its founder.

So, whether you’re assembling your first board, strengthening your current one, or considering joining one yourself, this guide has you covered. It breaks down everything you need to know about nonprofit board responsibilities and how to fulfill them effectively.

What is a nonprofit board of directors?

A nonprofit board of directors is a group of individuals legally responsible for governing your organization. Think of them like a compass that points and directs you towards the right destination.

They oversee strategy, ensure financial accountability, and make decisions that align with the mission while keeping the organization compliant with federal and state regulations. 

Most states require nonprofits to have a board with a minimum of three members to set up and incorporate their organization legally. 

Note: The IRS does not dictate board size; states set the minimum (often 1-3). Check your state statute.

How to structure your nonprofit governing board?

There is no one-size-fits-all setup for a nonprofit board. The right structure depends on your organization’s size, mission, and most importantly, where it is located. 

Usually, small nonprofits operate with a board of three to five members, while mid to large organizations have anywhere between five and fifteen members.

However, most nonprofit boards are made up of these three common positions:

1. Chair

The chair or the board president is the board member who serves as the leader and supervises all the affairs of the nonprofit board.

• Leads board meetings and sets the agenda
• Acts as the primary liaison between the board and the executive director
• Ensures the board fulfills its governance responsibilities
• Represents the organization publicly when needed

2. Secretary 

The secretary maintains accurate records and ensures your board stays compliant with legal requirements.

• Records and maintains accurate meeting minutes
• Manages official documents and board records
• Ensures compliance with bylaws and legal requirements
• Handles board correspondence and communications

3. Treasurer 

The treasurer oversees your organization’s finances and keeps the board informed about financial health.

• Oversees the organization’s finances and budget
• Reviews financial reports and ensures accuracy
• Works with staff to maintain financial transparency
• Reports financial status to the board regularly

Beyond these roles, you can also add vice chairs, committee chairs, and at-large members depending on your needs. 

The goal isn’t to have the biggest board but to build one with diverse skills and perspectives that can guide your mission toward sustainable growth.

3 key fiduciary duties of board members 

Every board member carries legal responsibilities known as fiduciary duties. These duties apply equally to all directors, regardless of the title, background, or committee role. 

Here’s what every board member must uphold:

1. Duty of care 

The duty of care requires directors to perform their responsibilities in good faith and with careful attention. They must act with the same diligence they would use in managing their own affairs.

Here’s how nonprofit directors can exercise the duty of care:

• Ensure prudent use of all nonprofit assets, including people, facility, and nonprofit donations
• Be well-versed with the organization’s mission, bylaws, and key policies
• Regularly attend meetings and stay informed of its programs 

2. Duty of loyalty 

The duty of loyalty means putting the nonprofit first. Board members must set aside personal interests and avoid situations where their judgment could be compromised. Every decision should advance the organization’s mission, not individual gain.

Here’s how nonprofit directors can exercise the duty of loyalty:

• Avoid or disclose conflicts of interest, such as personal or financial ties to vendors, grantees, or staff
• Maintain confidentiality around board discussions and sensitive data
• Never use the organization’s opportunities, assets, or information for personal gain

3. Duty of obedience 

Following the duty of obedience, directors must ensure the nonprofit stays true to its mission and operates within required legal and ethical boundaries. 

Here’s how nonprofit directors can exercise the duty of obedience:

• Adhere to the organization’s bylaws and ensure that all actions align with its stated purpose
• Comply with state and federal laws governing nonprofits, including tax-exempt regulations
• Protect the organization’s public reputation and ensure funds are used for their intended charitable purposes

6 core responsibilities of the nonprofit board members

Beyond fiduciary duties, your board members have responsibilities that directly impact how your nonprofit operates and deliver on its mission. 

Let’s take a look at these areas where they make a big difference:

1. Hire and oversee the executive director

Your board is responsible for recruiting, hiring, and setting compensation for the executive director.

They also conduct annual performance reviews, provide constructive feedback, and guide the ED in their responsibilities.

2. Set strategic direction

Board members define long-term goals, approve the strategic roadmap for growth, and help create a fundraising plan. They evaluate major initiatives, allocate resources accordingly, and keep the organization aligned with its mission.

3. Oversee financial stewardship and budgeting

The board approves the annual budget and monitors spending throughout the year. They ensure the organization operates within its means and makes sound financial decisions that support long-term sustainability.

4. Raise funds and secure resources

Every board member contributes to fundraising efforts. This means making donations, opening doors to potential supporters, and actively participating in fundraising events and donor cultivation efforts.

Note: Adopt a board‑giving policy that fits your org; 100% participation is a common best practice, not a legal mandate.

5. Monitor performance and compliance

The board tracks progress against goals using key nonprofit metrics and organizational reports. They establish internal controls, assess risks, and hold leadership accountable for maintaining ethical standards across operations.

6. Advocate for the mission

Board members represent your nonprofit in public events, communities and professional circles. They articulate your impact, build strategic partnerships, and create visibility for your cause among potential supporters.

9 important things to keep in mind for an effective nonprofit board

Setting up a nonprofit board isn’t just about having qualified professionals. You need to follow certain essential guidelines to ensure that your board runs in the right direction and maintains accountability. Here are some rules to consider:

1. Term lengths and limits 

Typically, board members serve terms of two to three years, with many nonprofits offering the option to renew. However, many organizations require a one-year break between terms before a member can rejoin.

With term limits, you can keep the board dynamic, bringing in new perspectives and preventing leadership fatigue. 

2. Compensation and reimbursement

Board members usually serve without pay, but you can reimburse them for out-of-pocket expenses like travel, meals or lodging. Your nonprofit bylaws should clarify whether board members receive payment, under what circumstances, and how it is determined. 

The IRS considers reasonable compensation acceptable, though it hasn’t clearly defined what “reasonable” means. But if it passes these three conditions, the IRS can consider it appropriate:

• The compensation is comparable to what similar organizations pay for similar services
•  It’s approved by independent board members without a conflict of interest
• The organization documents the decision-making process with an adequate record

3. Meeting frequency 

Most states require the board to meet at least once a year, but quarterly meetings work better for staying on track. Also, set clear attendance expectations so members stay engaged and take their role seriously.

Nonprofit bylaws must specify how often the board meets, notice requirements, and quorum rules. 

4. Voting and decision-making 

Define clear rules for how your board makes decisions, taking into note whether votes need a simple majority, supermajority, or unanimous agreement. Remote participation is often allowed, but director proxy voting is commonly prohibited. Check your state statute.

Record every vote in your meeting minutes to protect your organization legally and maintain transparency.

5. Committee participation

Every board member should serve on at least one committee. These are small groups that focus on specific areas, including finance, fundraising, and nonprofit programs. 

This keeps your members involved beyond board meetings, giving them a chance to connect with others and share their expertise.

6. Diversity and independence

Your board should include people from different backgrounds, industries, and perspectives to strengthen decision-making. 

Additionally, make sure your board members aren’t employees, contractors, or family members of staff. This prevents personal conflicts and ensures your board can offer unbiased oversight.

7. Auditing requirements   

Once your nonprofit reaches certain revenue levels, some states require you to conduct independent financial audits and form audit committees to review them. California, for example, sets this requirement at $2 million in annual revenue.

Your board plays a critical role in this process by overseeing the audit process, reviewing findings, and addressing any financial concerns that arise. 

Check your state’s specific thresholds to ensure you meet these compliance obligations.

8. Board policies

Your board needs formal policies to guide the organization’s decisions, protect your mission from legal risks, and demonstrate accountability to donors and regulators. These frameworks ensure transparency and give your board clear guidelines when handling sensitive situations.

Here are the policies to adopt to strengthen your governance:

• Conflict-of-interest policy: Requires board members to disclose potential conflicts and step back from related decisions.
• Whistleblower policy: Creates safe channels for reporting concerns about financial misconduct or ethical violations.
• Document retention and destruction policy: Establishes rules for how long to keep records and when to dispose of them properly.
• Gift acceptance policy: Sets guidelines for what donations your organization will accept and under what conditions.

9. Charitable-Solicitation Registration

If your nonprofit asks for donations outside your home state—or even online—many states require registration before soliciting funds. Check each state’s requirements to ensure your fundraising activities are fully compliant.

A quick checklist for building a strong nonprofit board

Finding a great board member takes more than posting a job description. You need to assess whether they are the right fit for your nonprofit and offer proper guidance in the initial phase. Here’s how to do it right:

Phase 1: Finding potential board members

• Ask your staff to look for qualified professionals in the community who align with your mission beyond their personal network. 
• Post board openings on platforms like Bridgespan, BoardStrong, and LinkedIn to reach professionals actively seeking board roles.
• Attend networking events, conferences, and community gatherings to meet mission-aligned professionals.
• Reach out to alumni associations, local chambers of commerce, and Rotary clubs for qualified candidates.
• Partner with corporate CSR departments at local businesses that place employees on nonprofit boards.

Phase 2: Evaluating and selecting candidates

• Look for genuine interest in your mission and willingness to commit time and resources.
• Assess whether they bring needed skills like financial expertise, legal knowledge, marketing experience, or fundraising connections.
• Check for conflicts of interest through their business relationships, vendor connections, and other board affiliations.
• Look for candidates with a track record of follow-through in volunteer work or professional achievements.
• Consider how their background and perspective add diversity to your board’s decision-making.

Phase 3: Setting new members up for success

• Provide an onboarding packet with your mission, bylaws, financial reports, and strategic plan. 
• Schedule orientation with your board chair, founder and executive director to review expectations and governance structure.
• Assign an experienced board member as a mentor for their first six months, or pair new members together if building your first board.
• Clarify expectations for meeting attendance, committee work, annual giving, and fundraising involvement from the start.
• Invite them to a program site visit, community event, or staff meeting before their first official board meeting.

How to become a nonprofit board member?

If you’re interested in becoming a nonprofit board member, you’ll need the right mix of experience, skills, and commitment. Here’s what nonprofit organizations typically look for:

• Relevant experience: Most value candidates with professional backgrounds in areas like finance, management, marketing, or social issues. 
• Volunteer involvement: Look for commitment to the community and public interest – how involved you are with social work. 
• Governance knowledge: Understanding of fiduciary duties that you can develop by reading up, attending nonprofit workshops, or taking courses. 
• Time and financial commitment: Board service requires availability for meetings, events, and committee work, plus participation in fundraising campaigns.

Creating a board that drives mission success!

Building a strong nonprofit board goes beyond filling seats. It’s about creating a foundation that carries your organization through challenges and growth.

Your board’s strength lies in how well they understand their responsibilities, work together toward common goals, and hold themselves accountable to the communities you serve. With clear expectations and the right governance practices in place, your board becomes the driving force behind your organization’s success.

With that said, fundraising is one critical area where your board’s involvement makes a real difference. 

RallyUp (an end-to-end fundraising platform) makes it easier by offering multiple fundraising options, pre-designed templates, and done-for-you services that take the complexity out of running campaigns.

Your nonprofit can focus on connecting with donors while RallyUp handles the fundraising side, helping you reach your financial goals faster.

FAQs on nonprofit board members