When a person becomes a board member, she assumes a level of responsibility for the organization and thus exposes herself to claims for not managing the organization properly. Even if the case brought against a board is thrown out, the organization still bears the brunt of having to pay the legal fees. Legal expenses could be brutal for a small organization and could even put them right out of business.
In general, D&O insurance includes coverage of an officer or director in the discharge of his/her duties. This includes but is not limited to:

• Any actual or alleged act
• Misstatement or misleading statement,
• Neglect or breach of duty
• Omission and/or error

As with all insurance policies, read the policy carefully to ensure it includes all the necessary components for your organization. Here is a checklist of issues to review when looking to purchase D&O insurance.

Included within your strategic planning section and your marketing plan are key items that will appeal to funders. Here is where you’ll talk about business growth and development. This will be essential information for grant makers to review. More than likely, they will be reviewing these sections of your business plan to determine your other means for establishing financial stability. Funders are looking for organizations that want a hand up to grow and invest in, not an organization that is looking for a hand out and total dependence.

As you plan out your nonprofit business plan, you’ll probably find several areas where you would benefit from
staff presence. It is a known fact that salaries and benefits are the highest allocation in any business’s budget. However, I would caution you against starting your nonprofit with lots of staff members. Most nonprofits operate with the support of volunteers for the first few years. Also, it’s more appealing to funders that their financial contributions go directly to supporting the projects of the organization and not just to salaries.

One of the first things you should do, before setting a rate, is write a job description. Start with what will likely be your job the Executive Director’s job description. Things that should be included in this job description: highlight the top skill levels, educational background, and previous work experiences needed to fulfill this position successfully. Don’t forget to include future expectations for this position. At the moment, you are looking at it as your position. One day you’ll move on, and you’ll want to be sure to have considered how the position should evolve. Also, consider your organization’s operating location. If you are in a major metropolitan area, then that may justify raising your salary slightly over the average.

Finally, do some research. Find out what other organizations are paying for the same position with similar skill sets and regional location. The National Council of Nonprofit Associations has a list of several nonprofit salary reports you can review; please note some may be for sale. Or you can browse through the classified section of your local newspaper to see what salaries are being offered.

Important point here is being diligent and fair. You don’t want to make your organization top heavy.