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End-of-Year Prep: Is Your Board Ready?

Finally– you can see the light at the end of the tunnel. Your end of fiscal year is approaching, but your work is not quite done yet. Budget and financial matters are typically the focus for the end of the fiscal year. However, this time also provides an excellent opportunity for nonprofit board members to look back on the year and perform some much-needed housekeeping.

For example, looking back on your board governance and organization management should definitely be done annually. What better opportunity than the end of the fiscal year? Here are some thoughts on what will make a useful end-of-year checklist.

nonprofit board of directors
 

End of Year Board Preparation Checklist

Financial Oversight

Meeting a board member’s legal or fiduciary duties is a much greater task than most board members initially realize. Protecting the organization financially is a big task, and just maintaining a status quo usually doesn’t cut it. A thorough review of the budget and all the possibilities for how to spend any surplus monies is definitely worth it. Taking the time to truly tie your budget to your mission can better serve your organization.

Before the new fiscal year begins, review and approve the budget for the upcoming year. This is an important planning exercise that confirms your mission and strategic plan. Take the time to ask the executive director and staff how they developed the budget so that the board understands the direction.

Most tax exempt organizations file one form of the IRS Form 990, which must be filed the 15th day of the fifth month after the end of the fiscal year. Boards should always review the prepared 990 before it is submitted. In fact, most boards have a Form 990 review policy documented.

Staffing

The end of the fiscal year is a good time to do board elections and staffing assessments. Many boards do elect the director at this time, as well as any other officer or committee positions. Just make sure you are holding these elections in a manner consistent with your bylaws. Don’t forget to ask the executive director what staff additions or adjustments are probable in the coming year.

Often, boards also review the executive director’s performance at this time. Boards should have a formal review to provide candid and useful feedback to the director. The executive director’s job often changes as the organization changes, so an annual review is helpful to everyone. The formal review allows the board a consistent way to grow and evolve this job description (and compensation).

The board should also review its own performance, as well as its current composition. This will provide insight and a future plan for recruiting new board members and making committee changes that are needed.

RELATED: Board Member Exit Interviews: Do You Do Them?

Legal Compliance

The end of the year presents an ideal opportunity to review any legal matters that arose over the last year. Doing so prepares boards for any open legal issues being carried into the new year, as well as planning for future issues. This is also a good time to verify required licenses, permits, insurance, and other compliance issues are in order for the new year.

Planning

Many boards focus just on compliance matters at the end of the fiscal year, but this time is a great time for planning. Review your mission statement. Are you doing activities that are outside of the scope of that mission? If so, does your mission need to change? Assess your organization’s risk areas, and develop a risk management policy. Schedule future meetings to ask questions about what you can do to make your organization more successful.

RELATED: 6 Tips for Perfect Board Meeting Preparation

Nonprofit Board End-of-Year Planning: An Ongoing Process

You probably can’t do all this in one meeting, but the end of the year is a perfect time to get discussions started. Many boards plan their end-of-year meetings to make sure they cover all these topics. Some boards spread these meetings over the entire year to make sure they discuss everything. The schedule is best left to you, but these topics will help you close out the year with an eye on the bigger future picture.


Interested in how to make your board of directors more productive through the effective use of technology? Boardable is a software platform that centralizes all communication between you and your board. Find the best meeting times, securely store all of your documents, archive discussion threads and more—all in one place. Click below to schedule a demo with a member of our Boardable team.

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