Traditionally, nonprofit boards sought out new members who were the individuals with the deepest pockets and who had a knack for socializing and fundraising. Over time, the role of board members has evolved, and within the board membership there is a need for the ability to strategically plan the mission and carry out the implementation of the organization's needs. When selecting new board candidates, recruiters need potential members to possess at least two of the three Ws - wealth, wisdom and a worker. The more mature the organization, the more "wealth" comes into the board, but the three Ws still apply.

The foremost challenges for the majority of nonprofits are, without surprise, financial issues. Particularly, over the last decade, nonprofits have had greater challenges, where even the longest established and most stable organizations have experienced downsizing staffs and budgets as the downturn in the economy hit most everyone. With today's challenges, boards, to remain solvent, need to keep abreast of the latest developments in tax law, charitable giving regulations, and accounting best practices, as the IRS has begun to require more detailed information about nonprofit finances and governance.

Members who understand their roles and responsibilities as board members, as well as the challenges facing nonprofits today, can not only improve the board's decision-making process, but also can help a board have maximum impact. A nonprofit board member has a dual role: support of the organization's purpose, and governance over how it attempts to further that mission.

Nonprofits facing limited budgets and greater demand mean that hard choices will need to be made. In many cases, it's the board's responsibility to make them. To make wise decisions, it's important to understand the organization's financial assets, liabilities and cash flow situation. Little is more disturbing to potential donors than the feeling that their money may not be used effectively.

Program funders also have increased reporting requirements. When deciding which grants to make, foundations are asking for more information, greater documentation and increased evaluation of results. Gathering and analyzing accurate, timely, comprehensive data, and being able to document a program's effectiveness and impact is increasingly critical. Understanding the organization's finances doesn't just improve the board's oversight capabilities; it also can make you a more effective fundraiser.

I have served on a number of nonprofits, and found the experience rewarding and challenging. Much of what makes a community a great place to live is the personal effort individuals give to community-oriented nonprofit organizations. If you believe that working on a board or a committee of a nonprofit board falls outside of your interests, but you have a desire to help, nonprofit organizations always need money.

Cort Wilcox is the vice president and a financial consultant for D.A. Davidson & Co. He can be reached at 667-1212.