The governing body of your organization is empowered and responsible for setting direction, corporate decision-making, compliance, operating-policy setting, and overall accountability for the organization in fulfilling its vision. Choosing the best governing structure is vital to ensuring the success and the growth and development of your nonprofit organization. It’s critical to understand the difference between a governing structure that is board of directors-only, or also includes a governing membership.
Board of Directors Only
Board members are typically nominated and elected by the existing directors. The board members accept responsibility for setting direction, making decisions, and managing the activities of the organization, whether they hire others (staff or independent contractors) to carry it out or use volunteers. In this governing framework, the board is not accountable to another body.
This typically involves individuals (the members) who are allowed to vote on some or all of the following: matters of governance, direction, approval of budgets, activities, staffing, and/or substantial financial obligations that the organization might undertake, such as purchase of buildings or equipment, or the approval of long term contracts. This structure may include members voting to appoint a board of directors or executive committee to manage the day to day operations of the organization and then the membership only votes on specific actions as necessary for the success of the organization. The Board may bring those types of issues before the members as necessary. Membership may require membership dues in order to be a voting member of the organization, or not. Membership may also include benefits, such as discounts to participate in activities of the organization where participants are required to pay fees, or perhaps have access to special activities for members only. Membership must be defined as to criteria for membership, fees required if any, how fees are set, what are member benefits and responsibilities.
Membership by Affiliation Vs. Governing Membership
There is often a misunderstanding with use of the term membership. It’s common for many nonprofits to have “members” who are bought into the ideals of the organization and are considered insiders, but they don’t have governance rights. That is perfectly OK, but there is a legal distinction between such affiliate “membership” and members having governing authority. Many states require nonprofits to declare whether they have a governing membership when the organization first incorporates. If membership is affiliate-only, the nonprofit is NOT a member organization by legal definition.