Advisory boards: how they differ from your governing board

This guide is for founders and boards thinking about an advisory board, advisory council, or "friends of" group: a circle of people who lend expertise, connections or credibility without governing the charity. Advisory groups can be very useful. They can also cause confusion if nobody is clear about who decides. After reading, you'll know the difference between an advisory board and your governing board, what the law and the IRS say, when an advisory group helps, and how to set one up so it works.

Two very different things

The IRS instructions for Form 990 say a director or trustee is a member of the governing body "but only if the member has voting rights," and that "members of advisory boards that don't exercise any governance authority over the organization aren't considered directors or trustees."

State law draws a similar line. New York's Not-for-Profit Corporation Law, section 712, separates committees of the board, made up of directors, from "committees of the corporation," whose members may be non-directors and which have no authority to bind the board. Your state's rules may differ, so check them.

When an advisory group helps

• Expertise you can't put on the board, such as a doctor, lawyer or scientist who can't take on a director's duties or time.
• Voices of the people you serve, for example a youth council or a community advisory group that shapes programs.
• Connections and credibility, such as respected local figures who open doors for fundraising.
• A place for former board members who have rotated off but still want to help. See board terms and rotation.
• A specific project, such as building a new program or planning a capital campaign, with a clear end date.

When it doesn't

• To avoid fixing the governing board. If the board lacks skills, recruit them onto the board.
• As a waiting room for people the board doesn't want to say no to.
• When nobody has time to manage it. An advisory group that never meets, or never hears what happened to its advice, does more harm than good to relationships.

Setting one up

1. Decide the purpose and what the board wants from it.
2. Approve it by board resolution, with a short written charter. Our committee charter template works for advisory groups too.
3. Decide who appoints members, for how long, and how many. Terms of one or two years work well.
4. Name a link person: a board member or the director who leads the group and reports back to the board.
5. Set expectations in writing: how often it meets, confidentiality, conflicts of interest, and that members don't speak or act for the charity unless asked.
6. Be clear about giving. If you hope advisers will donate or fundraise, say so at the start.

Keeping it useful

• Meet with purpose, two to four times a year, with an agenda and papers sent in advance.
• Close the loop. Tell advisers what the board decided and what happened to their advice.
• Keep simple notes of meetings. The Form 990 instructions say the question on documenting committee meetings covers committees with authority to act for the board, "which ordinarily don't include advisory boards," but notes help everyone remember what was suggested.
• Thank them, in person and in your annual report, with their permission.
• Review it each year. If the group has done its job, thank everyone and close it.

Committees of the board are different

A committee of the board, such as a finance or audit committee, is not an advisory board. It is made up mostly or entirely of directors, and the board can give it authority to act within limits. The rules vary by state. In Illinois, for example, 805 ILCS 105/108.40 says each committee must have two or more directors and a majority of directors, and lists decisions a committee can't make, such as filling board vacancies or amending the bylaws. In New York, a committee of the board must have three or more directors. See our committee charter template.

Advisory board checklist

• The board approved the advisory group by resolution, with a written charter
• Everyone knows the group gives advice and has no authority to decide
• Members have agreed to confidentiality and to declare conflicts of interest
• A board member or the director leads the group and reports to the board
• Advisers hear what happened to their advice
• The board reviews the group's purpose every year