Nonprofit Insurance Program

Directors and Officers: How their Decisions Impact Nonprofits

By Alexa Connelly
February 10, 2013

Directors and officers (or D & O) are the driving force of any nonprofit organization board. Their decisions impact all board members by determining how the animal welfare organization will act, what issues are important and how funds will be used. These decisions affect many people, so understanding how they work is important.

To understand how directors and officers maintain duties on the board you have to know what their specialized duties are. The board of directors ensures that the public benefits from correct use of funds acquired through various sources. They ensure that any member of a non-profit organization cannot benefit individually from funds the organization receives. The board appoints officers to carry out the decisions of the board and help the organization achieve their goals. The directors are usually in charge of pointing the organization in the right direction, and the officers steer the organization towards their goals and public benefit.

Directors can also serve as officers if necessary. Since the directors are in charge of determining how funds will be spent, and officers are tasked with carrying out the orders of the directors, their actions affect all members of the organization and the public who benefit from the services offered. Usually this involves how funds are spent and raised, but it can extend to other factors, such as what services the nonprofit will provide and to whom. D & O decisions trickle down to paid staff, volunteers, financial responsibilities and insurance decisions. They also decide if they need to charge for organization membership.

These decisions affect organization members, volunteers and the public in many ways. Most notable is whether or not the directors decide that dues or fees must be collected to continue to offer their services to the public. They will only make such decisions if it’s absolutely necessary.

Understanding how the directors and officers work within a non-profit organization will enable the public to better understand how the organization works and just what they can do. Keep in mind that any non-profit will try to keep their services as accessible as possible so they can continue to help.


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