For Professional Advisors: Counseling Clients Who Serve On Board

One of the most important questions you can ask a client is whether the client serves on boards of directors of nonprofit organizations. Not only will the answers give you insights into the client's community and philanthropy priorities, but you'll also have an opportunity to discuss fiduciary obligations when your client asks you for advice.
Community Foundation Boulder County's team is a terrific resource for learning more about serving on boards of directors in the community, whether you are advising a client who is serving on a board or you're interested in serving on a board yourself.
To get you started with information you can share with your clients, here’s a handy checklist of the three key responsibilities of board members:
  1. Mission. The board is in charge of making sure the organization is achieving measurable goals to carry out the charity’s purpose. Charitable status carries with it a host of requirements under state corporate law, overseen by the attorney general, as well as tax laws set out in the Internal Revenue Code. In addition, the board is ultimately responsible for ensuring that the charity’s programs are actually working.
  2. Leadership. The person responsible for the day-to-day business of the charity is the executive director, chief executive officer, or a person in some other designated position charged with oversight of the charity’s operations and programs. The board’s responsibility is to oversee this person, including hiring and firing the position. Additionally, the board has to govern itself and elect new members and officers according to its bylaws to make sure the governing body stays healthy and active.
  3. Money. A big responsibility of directors is to ensure that the organization has the financial resources to carry out its mission. This responsibility includes compensating employees, covering overhead, and paying for the expenses of the programs that are delivering on the charity’s mission. In addition, the board needs to be sure proper financial oversight is in place with all the right legal and accounting controls. Finally, most boards expect directors to give financial support in some form, whether that is in the form of personal gifts, gifts from the director’s company, or through the director’s own efforts to fundraise on behalf of the charity.
Fulfilling responsibilities as a board member requires a big commitment of time. For instance, BoardSource reports that nearly half of all charity boards meet more than six times a year, and 75 percent of charities ask board members to participate in an annual retreat.
Not everyone is up for the fiduciary responsibility and time commitment of the director role. That’s okay! There are other methods of serving the charities and causes you and your clients love. For example, serving on a committee or task force does not carry the same fiduciary responsibility that comes with serving as a director, although it’s still a big commitment of time and effort.
Understanding your clients' community board activities gives you an important connection point as their advisor, and it can open the door for community opportunities for you, too. Community Foundation Boulder County's team would love to explore this topic with you. We invite you to get in touch!   PhilanthropicServices@commfound.org | 303.442.0436