In this section, we will explore the roles of founder, board president, and executive director in a nonprofit organization.
Founder’s Role and Board Membership
Can a founder be a board member?
A founder can be a director and be on the board. In fact, they usually are. Starting out you as the CEO and the other founder are directors.
It’s going to be the COO or CTO, depending on your labels. Why do you want to be a director and be on the board? Being a director means you are legally on the hook, especially if you go bankrupt.
Founder vs Executive Director
Can the founder of a nonprofit also be the executive director?
The founder of a nonprofit can be the executive director. A founder has a choice to be part of the staff or the board. While no set number of board members is required, most nonprofits have 3 to 31 directors.
The executive director oversees all departments like marketing and HR. They make the vision set by the board a reality. The board chooses the direction and the executive director implements it. When the executive director sits on the board, power divisions get complicated.
The founder sets the vision and ensures administrative tasks run smoothly. Duties include selecting board members, laying out board roles in setting policies, implementing board-set policies, approving budgets, and determining staff salaries.
Financial Practices and Board Structure
Non-profit founders get paid for running organizations they started. They work long hours for less pay than at for-profits. Drawing a salary is reasonable if the non-profit is their only job. Usually non-profits allow president pay, with caveats. Some bylaws prohibit pay except for reimbursements or non-officer services. IRS Form 990 non-profits describe their executive pay approval process.
Family members can be on non-profit boards per IRS. The norm is a temporary board president until a permanent executive director is found. Dividing employer-employee roles maintains division of power.