A nonprofit organization does not have owners. It has a board of directors. Directors make decisions in the best interests of the organization.

Directors of a nonprofit

The directors are responsible for managing the organization. They make most of the important decisions about how the organization operations. Directors are not employees of the organization. A board must meet at least once a year, but meeting more often is recommended.

The board of directors uses bylaws to help make decisions.

The bylaws explain these and other matters:

• Who elects the directors,
• When they are elected,
• How long they will serve as directors, and
• And how to remove a director.

As a group, the directors make up the board of directors.

Each director owes fiduciary duties to the nonprofit. These are the duty of care and the duty of loyalty. In some states, a third fiduciary duty is owed, the duty of obedience. See the General Not For Profit Corporation Act of 1986 for more information.

It is rare for a director to be held legally responsible for the actions of a nonprofit, but it can happen. Liability insurance is often purchased by the nonprofit to cover this liability.

The executive director of a nonprofit

The first employee hired by the board is usually the Executive Director. The Executive Director position should not be confused with the directors or officer roles. The Executive Director runs the day-to-day operations of the organization. They take direction from the board. Other employees can be hired by the board or by the Executive Director.

Officers of a nonprofit

The officers of a nonprofit board of directors usually include:

• A President, 
• Vice President,
• Secretary, and
• And a Treasurer.

Sometimes other titles are used: Chairperson or Vice-Chairperson. The titles of the officers and a description of the officers' responsibilities should be included in the bylaws.

The officers run the board meetings, sign significant contracts, and keep meeting notes. The officers are asked to fill those roles by the other members of the board and are usually not paid.

The bylaws should have:

• A job description for each officer,
• A description of how officers are chosen, and 
• Instructions on how to remove an officer from their position.

It is common in smaller, newer organizations for one person to fill two officer roles. For example, if the organization has a board of directors with only three people on it, each person is a director and an officer of the organization.

Employees of a nonprofit 

• The employees of the organization are responsible for following the rules of the board of directors.
• They should make decisions according to the rules of the board of directors. Volunteers can be managed by the employees.