Board designations and delegations: important considerations and sample policies

At times, an NFP’s governing board may make designations or appropriations that result in self-imposed limits on the use of resources without donor restrictions, known as board-designated net assets. The Board need not approve each designation separately. In many cases, especially with large NFP entities, the Board will delegate this responsibility to senior management. In these situations, it’s important to ensure that any such delegation is formally documented and that the designations are reviewed with the Board at least annually