BoardSource is a great resource for all things related to nonprofit board leadership and governance. For example, Recommended Governance Practices is a six page document that gives high level advice in three areas:
Setting policy is an important responsibility of the board of directors of a nonprofit organization. Determining procedures is not. That’s why board members need to know the difference!
Policies are general statements that express principles or requirements of behavior for the organization. They don’t change often. What are some examples of basic policies nonprofits should have in place?
By contrast, procedures lay out the steps and processes by which the policies will be implemented. They do change, as often as needed, to make sure they are working right.
When a nonprofit has paid staff, generally it is the Board’s responsibility to establish polices and the staff’s responsibility to develop the procedures to implement the policies. In an all-volunteer nonprofit, the job of developing procedures probably should be delegated to a committee. In either case, the goal is for the board as a whole to work at the level of policy and strategic direction, and avoid “micromanaging” the organization.
Two good resources to learn more:
What Governance Policies Should Your Nonprofit Have?
Creating Nonprofit Policies
Looking for nonprofits near you? Perhaps you are thinking of starting a new nonprofit but, before you do, you want to see if there’s already one with a similar mission. Maybe you are a staff member or volunteer of an existing nonprofit and you are looking for nonprofits that complement what you do or with whom you could collaborate or share resources. Here are three online databases that can help you research nonprofits in your area—or elsewhere!
GuideStar has been around for years and provides a database of charities and nonprofits classified in the following nine groups: Arts, Culture and Humanities, Education and Research, Environment and Animals, Health, Human Services, International, Public, Societal Benefit, Religion, and that old faithful, “Other.” Each main category is broken down into various subcategories. You can search by state and city, but not by county without purchasing a subscription.
GreatNonprofits bills itself as “the leading platform for community-sourced stories about nonprofits.” Like GuideStar, you can search by geography (state and city). You can also search on a long list of issue areas from AIDS to Zika Virus. What sets GreatNonprofits apart are the individual reviews and ratings submitted by individuals who have experienced services or volunteered for various organizations.
Cause IQ provides the most sophisticated queries of these three services. Create a free account and you can search using many filters. For example, the first filter I applied was to limit organizations to those in the “San Luis Obispo-Paso Robles metro area.” That yielded 1, 845 nonprofits. Then I applied the additional filter “501(c)3.” That brought my total down to 1,465. I limited that set to “Animal organizations” which reduced my group to 53. Finally, I excluded organizations that filed a 990-N tax form (i.e. those with gross annual receipts of $50,000 or less). The result: a list of 28 animal organizations in the San Luis Obispo-Paso Robles area with 501(c)3 status and annual income of over $50,000.
Whether you’re searching nearby or afar, add these tools to your research kit.
“Looking at the agenda, does anyone see that they may have a potential conflict of interest?”
As president of a nonprofit board of directors, I routinely ask that question at the beginning of each board meeting. Rarely does anyone speak up, and we go on about our business. We also have a conflict of interest policy and each board member must sign an annual acknowledgement that they have received and read a copy. When it comes to conflict of interest, our board is on top of things, right?
Not necessarily. At a recent meeting of leaders of some of our Spokes member organizations, the topic of conflict of interest came up. These leaders were concerned that their board members did not have a very sound understanding of what constitutes a conflict of interest. That prompted me to do a little research and guess what? I learned that my own concept of conflict of interest, while not wrong, was far too narrow.
Duality of Interests
First of all, the concept of conflict of interest relates to more than direct financial gain. Let’s imagine a board needs to hire a general contractor for some job. Let’s also imagine that one of the board members happens to be a general contractor. We probably all would say that board member should recuse him or herself from the discussion and decision on what contractor to hire for the job. On the other hand, what about a board member who also serves on the board of another nonprofit in the same community. Is that a problem? Could be!
Two considerations can help us to a broader, more complete understanding of conflict of interest. First, we need to think in terms of ethics rather than legality. An action can be strictly legal yet not necessarily the right or good thing to do. Second, we need to remember that among the three “duties” that board members owe to their organization is the Duty of Loyalty—essentially, that they will put the organization’s welfare first.
As the National Council of Nonprofits puts it, “Conflicts can be nuanced and have more to do with a “duality of interests” than a financial conflict.”
What now?
Based on my new understanding, I want to go back and re-read our conflict of interest policy. Are we following it? Does it reflect this broader concept? Does it say anything about how we will manage conflicts of interest that do come up? What should we consider adding or changing? My hunch is there will be work to do.
Want to educate yourself and/or your board on this topic? Here are some excellent resources to share.
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