When forming a new nonprofit, one of the first issues confronting the sponsor as they apply for a state charter and draft articles of incorporation and bylaws is: How many board members should the new organization have? As with most things relating to nonprofits and grant writing, while there’s no definitive right answer, there are some good answers.
Some states will approve a new profit with just a single board member—and the inherent simplicity and control of a single board member often appeals to a founder—this is a fast way to the exit when you apply for IRS 501(c)(3) tax-exempt status. Other founders, particularly true believers, will think they should have huge boards, perhaps as many as 25 or 30. Unless you’re really good at herding cats, this is an equally bad idea. The care and feeding of 15 or 20 board members is an enormous task and raises the real potential that you might get booted out of your own nonprofit in a coup* when grant money finally arrives. In addition, more opinions does not necessarily result in a better outcome and often results in a worse outcome than fewer. Whatever number of board members you pick, it’s critical that you be able to maintain control of the board.
If one board member is too few and twenty five too many, what’s the Goldilocks number? When we used to set up nonprofits in an earlier incarnation of Seliger + Associates**, we always recommended five, seven or nine members. An odd number of board members prevents tie votes. Five is generally enough to pass the IRS believability test. Also, IRS regs require that not more than half the board be “interested parties,” so you have to go beyond your mother-in-law for members and getting five can be a challenge. With a five member board, only two can be interested parties. Any number of board members more than nine will get unmanageable very fast. In this case, bigger is definitely not better.
Moving beyond the size issue, consider the quality of the members. It’s good if the majority of board does not have the same last name. Many foundation and some government funders will request board member affiliations. Having well-respected, un-indicted business leaders, clergy, public officials and so on is usually better than having all average Joes and Josephines. Still, it’s good grant PR to have one or two potential consumers of whatever service you’re providing. For example, if the organization will be providing affordable health care, have one or two potential patients on the board. Unless you’re forming a national/regional organization or one with a highly specific purpose like research for a obscure medical condition, claim that the board is “community-based,” and plausible evidence of that claim is an advantage. Local residents are usually better than distant “experts,” even in situations where that makes no sense.
One effective approach is to have a small, community-based, but still “respected” board of five members and a much larger “advisory board” of big shots that look good on letterhead and your website. The advisory board doesn’t actually have any power and doesn’t do much except lend their credibility and hopefully a donation every year. The advisory board idea is very common in Los Angeles, as there are many has-been actors and other entertainment industry types who’re willing to serve on advisory boards, as long as they don’t have to do anything. New York has ladies who lunch.
* It’s not uncommon for founders to get booted off their own board or for some board members to be kicked by other members in a putsch. I know because it happened to me when I was in my early 20s and still starry-eyed. I’ve heard lots of similar horror stories from clients over the years. Nonprofit boards can be intensely political, especially because the stakes are often so small.
** We no longer form nonprofits in most circumstances. As we’ve written before, it’s best to use an attorney or accountant who is familiar with nonprofits to help with the paperwork and approvals needed to form a new nonprofit.