A board of directors is a requirement for the operation of a Washington nonprofit entity. This elected group serves as the governance of your organization in everything from finances to the nonprofit’s mission.
Electing the right personalities to your board of directors is essential for your organization’s success. This guide will help you select your first board or grow an established board to better serve your nonprofit.
Check out our other guides for a look at how to form a nonprofit organization or how to select a board of directors in other states.
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Washington Board of Directors Requirements
The Washington Nonprofit Corporation Act, Section 24.03A.010, defines a nonprofit’s board of directors:
(3) “Board” or “board of directors” means the team or body of individuals ultimately responsible for the management of the activities and affairs of the nonprofit corporation, regardless of the name used to refer to the team or body.
The number of required directors on the board is laid out in Section 24.03A.505:
(1) A board of directors shall consist of one or more directors, with the number specified in or fixed in accordance with the articles or bylaws.
(2) The board of directors of any corporation shall consist of three or more directors if:
(a) The internal revenue service has determined the corporation to be a public charity described in section 509(a)(1) through (4) of the internal revenue code;
(b) The corporation has applied to the internal revenue service for a determination of exempt status through an application representing that the corporation is described in section 509(a)(1) through (4) of the internal revenue code; or
(c) The corporation has applied to the internal revenue service for classification as an organization described in section 509(a)(1) through (4) of the internal revenue code.
(3) The number of directors on a board of directors who are under 18 years of age may not exceed three or one-third of the total number of directors then in office, whichever is fewer.
Putting It Into Practice
A Washington nonprofit’s board of directors works as a support system for the organization. Its duties include financial management, structural guidance, the hiring of executive directors, and much more. While the board typically isn’t involved in day-to-day operations, it plays an active role in maintaining the well-being of the organization as a whole, its effectiveness, and its financial health.
A 501(c)(3) eligible nonprofit board of directors in Washington MUST:
- Have at least three board members that are not related to each other
- Elect the following members: president, vice president, secretary, and treasurer
Recommended: Read our full guide on How to Start a Nonprofit in Washington.
What Is the Function of the Board of Directors?
The Nonprofit Corporation Act, Section 24.03A.490 establishes the role of the board of directors in the following manner:
(1) A nonprofit corporation shall have a board of directors.
(2) All corporate powers shall be exercised by or under the authority of the board of directors, and the activities and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of the board of directors, subject only to any powers expressly reserved to the corporation’s membership or other persons in the articles or bylaws.
Putting It Into Practice
Before forming your Washington nonprofit’s board of directors, it’s important to understand the role this group plays in the success of your organization. The general responsibilities of a board include:
- Enforcing the Organization’s Mission and Purpose: The foundation of any nonprofit is its mission so a board’s chief task involves upholding that mission as well as the organization’s purpose.
- Hiring a CEO/Executive Director: While your board of directors plays an instrumental role in the success and effectiveness of your nonprofit, it doesn’t participate in the daily operations. That makes it vital for the board to hire a CEO or executive director who will provide effective, day-to-day leadership.
- Incorporating New Members: A board also must source and incorporate new board members capable of effectively upholding the organization’s values.
- Assessing the Allocation of Funds: Careful distribution of assets within an organization ensures all areas receive adequate funding and thus supports the success of each aspect of a nonprofit’s mission.
- Generating Funds and Ensuring Financial Stability: Alongside verifying the appropriate distribution of funds, the board also has a responsibility to generate more assets to create a solid foundation for the nonprofit’s long-term financial stability.
- Supporting and Evaluating the CEO/Executive Director: A nonprofit’s board of directors not only serves as a support system for the CEO/executive director, but also assesses their job performance.
- Ensuring the Organization Follows Legal and Ethical Practices: It comes as no surprise that upholding the ethics of a nonprofit is essential to its success in achieving its mission. In this case, the board’s task involves ensuring the organization consistently follows legal and ethical practices across its operations.
- Generating a Positive Public Image: Building trust within the community not only attracts private investors, but also develops credibility among community members who may use the services your organization offers.
- Acknowledging and Addressing Conflicts of Interest: The Internal Revenue Service (IRS) requires nonprofits to develop a written conflict of interest policy that the organization’s board of directors will enforce. This prevents any board member from using their position in order to serve their personal interests.
Additional Legal Responsibilities
In Washington, a nonprofit’s board of directors also must fulfill certain legal responsibilities. The three most common legal responsibilities of a Washington nonprofit include duty of care, duty of loyalty, and duty of obedience.
- Duty of Care: At a minimum, board members must attend and participate in meetings. In addition to this, read and review reports, record all actions made during meetings, and review the performance of the CEO or Executive Director.
- Duty of Loyalty: This involves acknowledging and disclosing any conflicts of interest as well as making decisions that benefit the nonprofit as a whole rather than a single board member.
- Duty of Obedience: Board members also must ensure the nonprofit adheres to all applicable laws and regulations while operating under the mission and bylaws that form its foundation.
Developing Your First Board of Directors
If you’re still in the process of developing your Washington nonprofit entity, choosing the right board members is key to ensuring the effectiveness and stability of your organization. Here are a few tips to help you get started:
- Solidify Roles. Designating functional roles for individual board members — outside of your elected officer’s roles — can improve the board’s overall effectiveness and functionality.
- Develop and Commit to Bylaws. Creating a set of bylaws to uphold the mission of your organization creates a strong foundation to guide board members’ decision-making. In addition, state law may require Washington nonprofits to develop bylaws.
- Prioritize Your Mission. Another beneficial strategy when choosing board members is to seek candidates with a passion for your organization’s mission and goals.
- Acknowledge Any Conflicts of Interest. Conflicts of interest will inhibit a board member’s ability to effectively uphold the values and best interests of your organization. That makes it extremely important to assess potential or existing conflicts of interest when evaluating board members for your nonprofit.
Filling Board Vacancies
Vacancies in a Washington nonprofit’s board of directors can be filled according to Section 24.03A.535 of the Nonprofit Corporation Act:
(1) Except as provided in subsection (2) of this section, the articles, or the bylaws, if a vacancy occurs on the board, including a vacancy resulting from an increase in the number of directors, then the vacancy may be filled by a majority of the directors remaining in office even if they constitute less than a quorum. For purposes of RCW 24.03A.530, any director so elected is deemed to have been elected by the members, voting group, or persons who would elect that director at a regular election.
(2) Except as provided in the articles or bylaws, a vacancy in the position of a director who is:
(a) Appointed by persons other than the members, may be filled only by those persons; or
(b) Designated by name in the articles or bylaws, may not be filled by action of the board.
(3) A vacancy that will occur at a specific later time, by reason of a resignation effective at a later time under RCW 24.03A.525(2), or otherwise, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
(4) If no directors remain in office, and there are no members with the right to elect directors, then the attorney general has the power to appoint one or more directors selected for their interest and ability to carry out the purposes of the corporation, unless the articles or bylaws provide a different method for electing, appointing, or designating at least one director.
Putting It Into Practice
When electing new members to your Washington nonprofit’s board of directors, focus on finding individuals dedicated to your organization’s mission. Here are a few tips to consider as you begin your search:
- Look to Your Volunteers. Volunteers who stand out can make excellent additions to a board of directors. These individuals already dedicate their time and energy to your organization and most likely will bring that same dedication and goodwill to your board.
- Explore Candidates Among Loyal Donors. Donors represent another group to consider when electing new board members because they create the financial foundation for your organization. That means they have a track record of dedicating time and money to ensuring the success and sustainability of your nonprofit.
- Expand Your Search. Diversifying your search to include outside groups can prove effective in creating a well-rounded board of directors.
What Are Elected Officers?
Section 24.03A.585 further outlines the election of officers to the board:
(1) The officers of a nonprofit corporation consist of a president, secretary, and treasurer, and other officers as may be authorized by the articles, the bylaws, or the board.
(2) Unless the articles or bylaws provide otherwise, the board shall elect or appoint all officers annually, and officers shall serve until their respective successors have been elected or appointed or until their earlier removal or resignation.
(3) The same individual may simultaneously hold more than one office in a nonprofit corporation, except that the same individual may not hold the offices of president and secretary.
(4) Each officer has the authority and shall perform the duties set forth in the articles or bylaws or, to the extent consistent with the articles and bylaws, the duties prescribed by the board or by direction of an officer authorized by the board to prescribe the duties of other officers.
Putting It Into Practice
Elected officers are members of the board with assigned roles focused on regulating the day-to-day activities of the organization and maintaining its success. Each position should have a clear role defined in the organization’s bylaws.
The board of directors is required to nominate elected officers in Washington. Elected officer roles can not only prove helpful in ensuring the effectiveness of the board of directors, but also provide a foundation of leadership.
The four elected officers required for nonprofits in Washington include:
- Treasurer: The treasurer is responsible for evaluating the financial health of the organization by keeping track of receipts and spending.
- President: As the leader of the board, the president commonly has authority over key activities like signing contracts and hiring or firing employees. This role differs from the CEO/executive director position, which the board typically hires after assigning the president role.
- Vice President: The vice president serves as support for the president. In many cases, the vice president moves into the role of president after the current president completes their term.
- Secretary: This individual serves as the organizer of the board meetings, which may include scheduling the meetings, informing board members of the meeting schedule, planning the meeting agendas, and recording meeting minutes.
Note: One person can hold two or more elected office positions, however, the role of president and secretary cannot be held by the same person. Additionally, the State of Washington requires at least one vice president but an organization may have several if needed.
Conclusion
Forming a board of directors is an essential part of creating and operating a nonprofit in Washington. Ideally, this group will advocate for your organization’s best interests in everything from finances to public relations. To form or expand a board of directors that will best represent your nonprofit’s needs, search for members who will uphold your organization’s mission and purpose.