Nonprofit Accounting Basics
Every nonprofit corporation needs a board. To be able to enjoy the various benefits of a nonprofit status, the state laws require articles of incorporation designating a board that stands for the organization. The board is the accountable body that:
- determines the direction for the organization
- guards its mission
- sets the standards and ethical guidelines
- monitors its performance
- ensures the organization is managed in a responsible manner
As nonprofits do not have owners per se, the board as a collective body acts as the moral leader and ensures the organization meets the expectations of its constituencies. Ultimately, the board is legally liable for the actions of the organization.