• The size of the board should be based on the needs of the organization.There is no universal “best” size.
• The primary guide for determining board size is that function defines the form, which changes over time. Board structure and size should be periodically reviewed as the needs of the organization evolve. 
• Numerous factors influence the size of the board: work load, legal mandates, phase in the life cycle, need for diversity, and maintaining a manageable group.

• State laws define the minimum size for a nonprofit board.
• External entities may mandate a specific size for a board (government agencies, parent organizations, membership.) 
• IRS Form 990 asks organizations to provide the number of independent directors on the board.
  

Federal law currently permits organizations to qualify for tax-exempt status with a single director or trustee. The Panel on the Nonprofit Sector has recommended that Congress amend the federal tax code to require that each organization, with certain exclusions,¹ have a minimum of three members on its governing board to be recognized as tax-exempt under section 501(c)(3) of the code.

 State laws in this area vary depending on whether the organization is established as a corporation or a trust. The Revised Model Nonprofit Corporation Act stipulates that a board of directors must have a minimum of three members. It sets no maximum number and allows an organization to set and change the number of directors in its bylaws, so long as there are always at least three directors in place. In practice, some states require only one director for nonprofit corporations, and some also permit the formation of a corporation sole.² One state, New Hampshire, requires public charities to have a minimum of five directors who are not related family members.³ Charitable organizations established by trusts are governed by one or more trustees as specified in the trust instrument.

¹ Excluded would be houses of worship and specific related institutions, specified governmental instrumentalities, and other organizations relieved of this requirement by the IRS.  

² Generally corporation sole pertains to houses of worship and is a form of religious organization consisting of one person only, and his or her successors in some particular station, such as the bishop or rector of a church. As a corporation sole, certain legal capacities and rights are granted in perpetuity to the individual by right of the particular station he or she holds  

³ New Hampshire requires that boards of directors of public charities (certain religious organizations excepted) have at least five voting members “who are not of the same immediate family or related by blood or marriage.” N.H. Rev. Stat. § 292:6-a.

1. When determining the size of our board, what factors should we consider?
2. When should we next review the size and structure of the board?
   - Do we know when our board size and structure was last reviewed?
   - How should we approach a review?
3. What are some pitfalls our board might experience, given its current size? What processes can we implement to avoid these pitfalls?  
4. Do we know the legal requirements for board size in our state? 
5. The bylaws should establish the size of the board. Have we considered the benefits of setting a range for our board?

12 Board Independence