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Compensating Nonprofit Board Members - Pros vs Cons

The case study:
Often Board and other committee volunteers for nonprofit organizaations are compensated for expenses during travel and meetings. Some think that this attracts volunteers for the wrong reasons. Engage in a discussion regarding the pros and cons of compensating board members and whether this is common practice for non-profits.

The solution cites a reference supporting that compensation is not a common practice. The pros to offering paid expenses is to ensure Board members and volunteers are not personal "out" a vast amount of money in participating in the organization's business needs. However, stringent policies must exist to outline what items will be paid for "upfront" or reimbursed, so that there is no abuse.

Solution Preview

It is not customary for non-profit organizations to compensate their Board members. The percentage of non-profits that actually do compensate board members is around two percent (reference 1). Depending on how a non-profit creates its bylaws and regulations regarding compensation, the result can be both positive and negative. For example, if the Board is expected to engage in activities outside of meetings; perhaps frequent community events and/or other tasks which demand a significant amount of time, a stipend type form of compensation may be warranted. The non-profit may find it difficult to attract quality Board volunteers if service requires extensive time (perhaps 80 - 100 hours per month) without pay. Unless ...

Solution Summary

When individuals volunteer their time to serve a non-profit, compensation is rarely paid. But what happens when people serve as Board members; taking on the fiscal responsibility of the organization? Should this level position be compensated, in some way? In over 400 words, with two references, this solution defines the pros and cons of Board member compensation; along with how a nonprofit should manage any such "pay" items.