Nonprofit Boards

Those to whom the board answers

The ownership of a nonprofit is not easy to nail down. Contributors to fund-raising by the organization are certainly investors, but as they do not legally ‘own’ the organization their expectations may vary. Some investors wish to remain anonymous, and therefore can be unknown not only to beneficiaries but even to members of the staff. Others, after they have donated, do not wish to be involved in the direction or control of the nonprofits. Others have very specific expectations and spell them out in the terms of the donation. So the board has the task of defining its ownership, those to whom the board (and the entire nonprofit) must answer. Some nonprofits broadly define their ownership to include existing and potential donors, so that the act of ‘answering’ to owners becomes part of the advertising that seeks to expand the resources and the mission of the organization.

Those whose interests are served

A nonprofit board carefully defines those who receive services provided by the nonprofit, and measures success by the extent to which those services are provided.

Overlapping Roles

Nonprofit boards typically have a duty to raise funds for their core enterprise, and to increase the number of stakeholders who care about the core purpose and are therefore willing to invest in it. So, as explained above, the entity to which a nonprofit board must answer is hard to pin down. It is not easily defined, and is subject to changes in composition, hopefully because it is being increased due to the efforts of the organization.