Nonprofit Accounting Basics

Board's Role

Every nonprofit corporation needs a board. To be able to enjoy the various benefits of a nonprofit status, 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.