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NEW YORK (Reuters) - For many of us, the notion of being on a board of directors seems like the pinnacle of capitalist dreams.
Meet a few times a year, stay at a luxury hotel, offer some pithy business advice, and cash a check. What is not to like?
For volunteers on nonprofit boards, though? Life is very different indeed.
Just ask Kelly Shikany. The financial planner from Chesterton, Indiana, had "prestigious" visions of board life swimming in her head, perhaps involving hanging out in mahogany boardrooms and hobnobbing with the rich and powerful.
So when she accepted a nonprofit board position, she was somewhat surprised at what she received in the mail: a polite letter asking for $1,000, the expected donation from all board members.
"My advice to anyone before ever accepting a board position is to find out not just the time commitment, but the financial commitment as well," Shikany said.
Think for a moment about what exactly is involved in being on a board, and it is nothing like the schmoozy, resume-padding breeze you might have imagined.
"These days boards are expected to perform at a high level, and have a real role to play," said Friso van der Oord, research director at the National Association of Corporate Directors (NACD). "It is no longer a ceremonial thing, where people just get together and shake hands."
Consider the time involved, for instance: meetings at least quarterly, or perhaps more frequently. Those events might be in the nonprofit's hometown or locations might vary, requiring you to travel and spend valuable time away from your primary gig.
And remember that it is not about showing up, punching the clock and then heading to the links. Presumably you are on the board because of some particular expertise, such as accounting or marketing. You will be expected to do your homework, not only for the general meetings but for subcommittee work as well.
That all adds up to an average of 166 hours of work a year, per nonprofit board seat, according to NACD. If you think in terms of billable hours: for a lawyer who typically charges $200 an hour, for example, that is a lot of work you are foregoing.
"It is a heavy commitment," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. He recommends that directors limit their board work, lest they become overextended.
And the reward? Yeah, about that - 82 percent of nonprofit directors do not get compensated, according to NACD data. (Those who do tend to be in the hospital field, which is its own unique arena, said van der Oord.)
Not only that, but like Kelly Shikany, you will probably be expected to make a financial contribution, too. That is why the boards of any prominent charitable or cultural institution tend to be stocked with wealthy, connected people who not only contribute themselves, but hit up their friends for donations as well.
In fact, 85 percent of nonprofit board members give out of their own pockets, according to consulting and advisory firm BoardSource.
The best a nonprofit director can hope for is to be reimbursed for board-related expenses, such as traveling to meetings and booking hotel rooms. But depending on the organization's board policies, and how cash-strapped it is, you might not even get that. Almost 60 percent of nonprofit directors report not being fully reimbursed for such expenses, according to the NACD.
In that case, consider the potential tax benefits of your pro-bono work. For charities recognized by the Internal Revenue Service, your expenses on the nonprofit's behalf can be legitimately deducted on your personal taxes. For more information check out the IRS's Publication 526 on charitable contributions (www.irs.gov/publications/p526/).
Of course, meeting and getting to know other local movers and shakers could lead to future business opportunities. But if you think your board work will lead to sipping cocktails with Elon Musk on a yacht somewhere, Shikany has some advice for you: Um, no.
"I was pretty naive about being on a board," she said with a laugh. "I'm not anymore."
Editing by Lauren Young and Matthew Lewis