A Deeper Way to Support Your Client's Philanthropy

By Jennifer Vickerman Akaolisa, CFRE, Gift Planner

If you haven't considered that your client base likely includes people who serve on nonprofit boards, it may be wise to do so.

Expressing interest in a client’s board service can also help reinforce your role as a trusted advisor who understands how wealth often brings opportunities for community leadership, whether it's serving on a board at an organization that has a $100,000 budget or a $100 million budget.

Clients sometimes assume that nonprofit board service simply means attending meetings and events, offering advice, advocating for the organization's mission and making an annual gift. In reality, nonprofit board members and directors have significant legal responsibilities that often include fulfilling three fundamental fiduciary duties:

• Duty of care
• Duty of loyalty
• Duty of obedience

The duty of care requires board members to stay informed, review financial information, ask thoughtful questions and actively participate in decision-making.

The duty of loyalty requires directors to put the organization's interests ahead of their own and appropriately manage conflicts of interest.

The duty of obedience requires directors to help ensure that the organization remains faithful to its charitable mission while complying with applicable laws and governing documents.

Because the board is ultimately responsible for overseeing the organization's governance and compliance, board members should stay informed about potential changes to ensure the nonprofit they’re serving has the systems and oversight needed to meet any new reporting requirements. This includes being aware of recent commentary suggesting that the IRS may be planning to revise Form 990. The revising will require greater transparency around government grants, government contracts and fiscal sponsorship arrangements, signaling increased expectations for nonprofit accountability and financial reporting.