Endowment Board Member Job Description
The money you donate to your local nonprofit organization often goes to an endowment fund. Management of the endowment and disbursement of its funds for the nonprofit's work is generally not handled by the nonprofit itself. Rather, it is usually handled by endowment board members, a separate group. Here is an overview of how they work to make sure your donation supports your charitable cause.
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Duties
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An endowment fund is an accumulation of invested capital. Endowment funds are usually placed in investments that generate income, and both preserve and conservatively grow capital. Board members determine financial goals and the appropriate investment vehicles to meet those goals. Annual income derived from an endowment fund is usually administered through the board to the organization for operating or other expenses. It is the duty of the board members to ensure these funds are spent wisely. By keeping endowment management separate from the nonprofit's management, the organization gains an independent third party to properly steward the funds and mitigate the risk of corruption.
Board members usually meet once or twice a month for a few hours to discuss relevant fiscal and other matters. Other duties may include working to increase the organization's public standing, and selecting the organization's chief executive officer.
Fundraising
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Board members may also have fundraising obligations to the organization. Often, nonprofit board members agree to raise a certain amount of funds, usually through the solicitation of direct financial donations. Often board members may meet their financial fundraising goal by garnering in-kind donations. In-kind donations are contributions of goods and services that can be assigned a cash value. For example, if a board member obtains a public relations agency to represent the organization for an initiative that might otherwise cost $50,000, that board member may receive credit for $50,000 in funds raised. Many board members meet their obligations through a combination of financial and in-kind contributions, although some wealthy board members opt to pay their obligation out of pocket.
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Selection
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Board members are most often chosen by organizations based on how extensive the prospective member's professional network is, coupled with their access to resources that could benefit the organization. For example, a nonprofit that provides sports programs to children of incarcerated adults might select a celebrity athlete as a board member as he could, in addition to making direct financial donations, increase the nonprofit's visibility and recruit celebrity friends to serve as spokesmen. New board members are usually selected by other board members.
Influence
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Because they have authority over the endowment and the income it generates, board members also wield some influence over the management of the organization. If the board is displeased with the direction of the organization, the board can withhold some or all of the income generated, or release it only for those initiatives of which it approves. Further, board members may be able to hire and fire the organization's chief executive officer.
Compensation
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Board members are not usually compensated, although those in the nation's largest nonprofits may receive a nominal fee. Since the primary responsibility of board members is to protect and increase the organization's assets, compensation is generally the mark of a fiscally irresponsible board.
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