Selecting the Board of Directors
A non-profit organization may have a few volunteers or it may have hundreds. Without a strong board of directors to steer the organization, their efforts will not be fully realized, and the aims of the organization may not be effectively met. To allow your directors to run the organization effectively, they'll need to know what is expected of them. Without some sort of job description, directors will not be able to focus their efforts — and the efforts of others — toward specific goals.
In determining what you need from directors, it's a good idea to make a list of required skills and a list of current board members. By cross-referencing the lists, you can not only assign specific duties to existing board members, but also determine which holes need to be filled.
Another good idea is to consider having both an accountant and attorney on the board of directors. These sorts of professionals have specific knowledge that can be critical to your organization. Keep in mind, however, that while the advice and insight gained may be extremely helpful, conflicts of interest may prevent them from representing your organization in an official capacity.
Types of Charities
The Income Tax Act currently recognizes three types of charities:
- Charitable organizations
- Public foundations
- Private foundations
The specific type of organization may also restrict who may or may not be a director depending on how the individuals are related through blood, adoption, marriage, common-law or close business ties.
In a private foundation, 50% or more of the directors may be related persons. In a public foundation or charitable organization, less than 50% of the directors may be related persons.
While it may seem like a good idea to have your friends and family sit on your board of directors, it may not be an option, and in any case, may not be the best thing for those you wish to help.
Remember, your organization exists to help your community and the rules governing the structure of the board are in place to ensure that all registered non-profit organizations are working to that end.