Yours in Service and Success: How to Accept and Fulfill Your Fiduciary Responsibility on a Nonprofit Board of Directors in Pennsylvania

by Judith Harris

A prominent community leader who serves on the nominating committee of a dynamic local nonprofit organization recently called you to inquire as to your interest in serving on the board of directors of that organization. You found her call a surprise but an honor, given the stature of this leader in the business and professional community and the historic and
current achievements of the organization.

The organization is a 501(c)(3) charitable organization serving the health care/educational/social service needs in the Lehigh Valley and one whose mission and values you find very appealing. Perhaps you have contributed to the organization in past years or served as one of its volunteers. Or perhaps you or someone you know enjoyed the benefits or services provided by this entity. You are an active but relatively young member of the business community with certain areas of expertise and well-honed skills needed by many businesses and nonprofit organizations but have never before considered service on the board of such an organization. Daunting? Not all. Fascinating? Absolutely.

Your casual meeting with the nominating committee Chair, the Executive Director, and two other committee members exceeded your expectations and answered your questions about the organization. In your efforts to prepare for the meeting, you had wisely visited the organization’s website and identified the current Board members and officers there, updated your curriculum vitae to present at the meeting, and, after having spoken to a few valued colleagues and mentors, you also decided to ask the following questions in person at the meeting:

  1. What is the organization’s mission and demographic and geographic scope of the people it serves?
  2. Is the organization an independent entity or a local or regional chapter of a larger organization? Is the entity organized as a corporation, a trust, or some other form?
  3. What are the organization’s most notable strengths, weaknesses, opportunities, and threats? (This is sometimes called a “SWOT” analysis.) Is there currently a strategic plan in place for the organization? When did the Board adopt the plan, and over what time period is it to be implemented?
  4. What is the financial condition of the organization? What are its revenue sources and budget for the year? Are the needs of the population served by it expected to change in the next 3 to 5 years, and if so, how and why?
  5. Could you provide me with a copy of the Bylaws and the most recent annual report of the entity for my review? (A mentor already advised you how to locate a copy of the most recent Federal Tax Return of this tax-exempt entity—IRS Form 990—online, and it provided you with much helpful information.)
  6. What kind of service is expected, generally and specifically, of a Board member of this organization? What is the annual schedule of Board meetings, and are meetings held in person, virtually, or a hybrid? What are the organization’s standing committees (for example, executive, finance, legal, governance, audit, development, strategic planning, etc.), and am I expected to serve on one or more of such committees?
  1. In what specific ways does the nominating committee think I can add specific value and strength to the organization? Do any aspects of my profession/ occupation, my clients, my interests, or my personal life or values create the potential for a conflict of interest in my board service?
  2. What is the financial contribution or commitment expected of each Board member each year? Am I expected to meet this requirement with my own contributions, or are contributions by other people I have solicited included in this goal?

After answering your questions, the Chair reviewed with you the fiduciary responsibilities of a Board member under Pennsylvania law: most notably, the duty of care and due diligence, the duty of loyalty and good faith, and the avoidance of conflicts of interest and even the appearance thereof.

The Chair then asked whether the committee could nominate you for election to the Board at its next meeting. You enthusiastically agreed and were elected. Congratulations! Your service as an exemplary nonprofit Board member—and your service to your community–are off to an auspicious start!

Related Articles