Nonprofit CEOs: Have you ever had a board member ask to be compensated?
This is a question one of my clients was asked recently. So, in my podcast I answered this question by going straight to the expert to provide some clarity: Mary Hiland, Founder and President of Hiland Consulting.
Mary and I had an incredibly insightful conversation about many things nonprofit, but really honed in on the relationships between executive directors and their boards. With over 40 years of experience, she knew exactly how to approach this topic.
[This part of our conversation starts at about minute 30:20]
One, it does depend on the state in which a nonprofit is registered. For example, in California, it is mandated that less than 51% of board members should be compensated.
Yet, there’s a deeper conversation here. The idea of board member compensation is out there, but we have to look closely at the motivations behind compensation. There are nonprofits where the CEO and CFO are on the board; so they are being compensated for their work.
What about board members who are “just” board members?
“I have never, in my entire career, heard of or worked with a nonprofit where board members were compensated just for being board members; just for showing up. I think the culture of the nonprofit sector and certainly most nonprofits is that being on the board is an unpaid, volunteer position.”
Now, reimbursement is a different story. There may be circumstances where board members are reimbursed for certain expenses—but that MUST be a conversation early on in one’s board tenure so everyone is on the same page.
“Money is a very sensitive issue, and you want to get clarity on it. I think asking what they need to be reimbursed for is really the question that drives the direction.”
Bravo, Mary, bravo.
📽 If you’d like to hear more of Mary’s deep wisdom on this topic (and many more), I invite you to view our conversation on my podcast.
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