When is free too expensive? (for example: the volunteer board member)

11 Nov

Who wouldn’t like to save money?

Nonprofit organizations, typically strapped for cash, are always looking for ways to save money on essential services. Who can blame them?

But is it possible for a less expensive option, even a free one, to actually cost an organization more than if they had paid for the service?

Let’s take one example to illustrate this dilemma: the volunteer board member.

Have you ever had a board member volunteer to perform a service for free for your organization in lieu of you having to pay someone?

At first, this seems like a wonderful deal. Your board member cares about your organization, otherwise presumably she/he would not be serving on your board. And, they agree to work for free. Sounds like a win-win situation.

But let’s look at the reality. The board member may not have the requisite experience to perform the tasks that they volunteered for. For example, a non-accountant board member may have volunteered to keep your records and prepare your financial reports. But how accurate will your records be? What is the cost to your organization of late or inaccurate financial reporting?

Even if your board member is skilled at the task at hand, chances are they have a full-time job elsewhere which requires their immediate attention. They get to your work when they have time. Your work is now late. What is the true cost to you of work done late? Have you as the executive director or other key staff member ever tried to tell a volunteer board member they are working too slowly?

What if your board member is just not doing a good job? How do you, if you are the executive director, fire a board member?

There is the additional question of a possible conflict of interest. Board members have a fiduciary responsibility to the organization. They have a potential conflict of interest if they are also acting as your controller or accountant. How can they effectively discharge their fiduciary responsibilities if they are also your record keepers?

“Free” services will cost you more if the work is done late, poorly or not at all.

My recommendation: avoid, if at all possible, having a board member perform work for free. This is not a long-term strategy for success.

Comments welcome.

Eric Fraint, President and Founder
Your Part-Time Controller, LLC

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