What’s on the agenda for your board this year? Are you covering the bases of good governance? Maintaining a checklist of annual to-dos can be an easy way to keep your foundation up to date and on-track. A checklist for your board can serve as a reminder of your legal obligations and governance best practices.
This checklist, designed for established foundations (not start-ups), offers a list of recommended and legally required action items. We encourage you to make it your own. It lists both legal obligations and recommended action items. Those that are required by law are in bold; others are recommended. Items on the list should be done annually or as noted in parentheses.
If your foundation has staff, keep in mind that the board is responsible for ensuring that tasks are completed. Some tasks cannot be delegated but must be done by the board, including approval of the foundation’s mission, bylaws, meeting minutes, budgets, grants, insurance, and investment strategies. Also, in addition to these tasks, the board must understand and follow the private foundation rules and the fiduciary duties of care, loyalty, and obedience.
Action Items
Governance
- Board meetings—Give notice, take care of business, hold elections, and set a board meeting calendar (once per year at a minimum or more often, as appropriate).
- Meeting minutes—Take minutes and approve previous (each meeting).
- Mission and vision—Establish or update mission and vision (as needed).
- Bylaws—Review and update bylaws (every five years or as needed).
- Board policies—Create and approve, or update board policies. Consider:
- Attendance at fundraisers
- Records retention
- Board membership
- Spending
- Conflict of interest
- Travel and expense reimbursement
- Perpetuity or sunset
- Trustee compensation
- Personnel (if any)
- Whistle-blower
- Board development and succession—Plan, recruit, and orient (as needed).
- D&O liability insurance—Consider and purchase D&O liability insurance (if desired).
- Executive director or other staff—Review performance, salary, and benefits for foundation staff.
Tax and Legal
- Federal income tax—File Form 990-PF (and Form 990-T, if appropriate) and pay excise tax.
- State corporate filing—File in every state the foundation is registered, if the foundation is incorporated (usually annually; however, in some states, file every two years) .
- State income tax—File the form if required, depending on the state (annually, if required).
- Employment taxes—If the foundation has paid staff, pay employment taxes (varies).
- Local property tax or tax exemption—File, if applicable and required (varies).
- State sales tax exemption—File, if available, depending on state law (varies).
- Professional advice—Check with an attorney or CPA to ensure that there are no additional requirements in your locality (as appropriate).
Financial Oversight and Investments
- Annual 5% minimum qualifying distributions—Determine and payout (annually).
- Budget—Create and approve budget.
- Balance sheet and actual versus budget reports—Review (each meeting).
- Investment policy statement—Prepare or review IPS (optional but recommended).
- Investment performance and investment managers—Assess investment performance and investment managers (as appropriate).
Grantmaking
- Grants—Approve (each grant cycle).
- Grant guidelines—Create and review grant guidelines (as appropriate).
- Grant policies—Create and approve, or update. Consider:
- Applications—Invite and review grant applications, if appropriate (each grant cycle).
- Grant reports—Review (for larger grants, review at each grant cycle).
- Report to grantees and public—Write and produce an annual report (if desired).
Administration
- Board meetings—Remind and give notice to board members of dates, times, and locations; send financial reports, investment reports, previous meeting minutes, and appropriate grantmaking information; and facilitate communication among members (between meetings).
- Recordkeeping—Maintain foundation records in binders or files that contain incorporation documents, bylaws, Internal Revenue Service tax-exempt determination letter, and any other correspondence; board policies; meeting minutes; and filed tax and legal forms (update as needed or after each meeting).
- Bookkeeping—Write and track checks, balance accounts, and prepare financial reports (monthly).
- Meeting minutes—Prepare and distribute minutes (after each meeting).
- Grantmaking—Collect applications, write checks, and collect grant reports (each grant cycle).
- Technology—Assess and update systems, including phone, fax, e-mail, website, antivirus, and spam filter software (as needed).
- Technology policy—Review and update (annually).
- Payroll—Pay staff (each payroll period).
Additional Topics To Explore
- Evaluation of your foundation’s impact, community need, board, or grantees
- International grants, funding advocacy, or expenditure responsibility grants
- Grants to individuals (including scholarships)
- Mission-related investing (similar to socially responsible investing)
- Program related investing
- Site visits
- Strategic planning, including succession planning and engaging the next generation
- Working with other funders (including community foundations)