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Training and Orientation for New Board Members

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After meeting dozens of people who would like to serve on a nonprofit board, one thing they all have in common is their desire to do a great job as a board member. However, very few small nonprofit staffs have the expertise or personnel readily available to provide new board members with the tools needed to navigate through the web of policies and procedures they will encounter.

Why New Board Members Need Training

Most nonprofits are just happy to find a person interested enough to join the board—but to keep them engaged and feeling productive, it’s necessary to do some training. That’s because a new board member may have no idea of what needs to be done or how to do it. Even new members with prior board experience will need to learn the ins and outs of the particular nonprofit’s board operations.

How Orientation and Training Help New Board Members
 
Board orientation and training is therefore important for a member because it helps them learn how they can best serve as a professional asset to the nonprofit. These sessions provide new board members with the specific knowledge and resources to know how to execute their roles and responsibilities successfully.  Traditionally, the Board President and the CEO or Executive Director take the lead in instructing and familiarizing new members by discussing the board’s and nonprofit’s goals and priorities. Orientations also allow current board members to interact and share information about how the nonprofit and the board function together.

Steps to Board Orientation and Training
 
Ideally, a board needs to have a plan in place for orientation and a process for training new board members. Below are some guidelines, and Spokes members can visit the Resource Library page on our website to find a more complete listing.

  • Orientation should take place shortly after a new member is elected to the board, ideally before the new member’s first meeting, and should be conducted by the board chair along with the executive director and anyone else they think is appropriate.
  • New board members should be fully briefed on the activities of the nonprofit, the history of the organization and their strategic plan, and be given copies of prior board minutes, the articles of incorporation and bylaws in a New Board Member Orientation Manual customized to reflect the nonprofit’s administrative structure. 
  • A board agenda and any documents needed for their first meeting should be added into the New Member Board Orientation Manual.
  • Assign a current board member as a “buddy” to mentor a new board member, and ask the new member if they would like to join one of the board committees as well. Working with a smaller group on a specific project can help balance out the sometimes overwhelming number of issues a new board member must digest at the beginning of their term.

Resources for Board Orientation and Training

Spokes Members can find a more complete outline on their Member’s Online Resource Library page:
https://spokesfornonprofits.z2systems.com/np/signIn.do?target=%2Fpublicaccess%2FneonPage.do%3FpageId%3D1%26

Member General Resources Links:
https://www.spokesfornonprofits.org/services/nonprofit-resource-links/

Additional Information:

Board Orientation:
https://www.councilofnonprofits.org/tools-resources/board-orientation

Board Manual Template:
https://www.gov.mb.ca/agriculture/industry-leadership/being-a-board-member/pubs/board-manual-template.doc


Nonprofit Board Governance

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Have you heard these statements?

  • “Nonprofit Boards of Directors must practice good governance.”
  • “The nonprofit is governed by its Board of Directors.”

The topic of nonprofit Board governance can be confusing, mostly because this important concept may not be fully understood. In general, governance brings together policies, systems and structures that provide support to Board members in making good decisions for the nonprofit according to expectations of the public trust.

Right there, you see that the topic can get confusing. It might help to know that governing a nonprofit is different from governing a for-profit organization. Nonprofits serve a public purpose without benefiting any particular individual. Therefore, the basic goal in governance for nonprofits focuses on protecting and furthering the mission of the nonprofit. However, the goal of a for-profit company is to generate income for the company, employee and shareholders.

Nonprofit boards are considered “Stewards of the Public Trust”, which signifies the general public trusts that a nonprofit is fulfilling its mission as stated to the IRS when it was granted exemption status as a nonprofit organization. The Board has three primary responsibilities: Duty of Care, Duty of Loyalty, and Duty of Obedience.

Duty of Care means the Board will make decisions with the same level of care as each member would for their own personal assets (even though board members have no personal assets in the nonprofit).

Duty of Loyalty means the Board puts the needs of the organization and the population that it serves above all other needs, especially the individual’s or group’s personal agenda.

Duty of Obedience means the Board will maintain compliance with all legal standards and regulations required for the exempt organization, including annual filings with state and federal agencies.  

A 2017 study on Boards of Directors showed that 56 percent of nonprofit Boards struggle with weak Board governance. As a result, approximately 52 percent of nonprofits are unable to expand their impact because of a weakness in strategic thinking such as developing a mission, strategy, impact evaluation, or insight by their Board.

What should be noted, however, is that these limitations are most likely not the fault of the Board members. Instead it’s more a matter of “you don’t know what you don’t know!” Without a doubt, those serving on a nonprofit Board have every intention of doing the right thing, making the right decisions, and being a good steward of the organization. But like coming into anything for the first time, Board members need to learn how to effectively govern a nonprofit and serve as a productive Board member. That takes information, training and dedication.

Spokes is always here to assist nonprofit Boards with the development of policies and procedures as well as providing an understanding of the legal and ethical responsibilities of the Board. Visit our website at https://www.spokesfornonprofits.org/services/just-for-board-members/ to learn more about the resources we have available to provide local nonprofit Boards with the management training, consulting and resources they need to better serve our community.

Resources about Nonprofit Board Governance:

Good Governance Policies for Nonprofits: https://www.councilofnonprofits.org/tools-resources/good-governance-policies-nonprofits

Study: Most Nonprofits Lacking in Leadership, Management http://www.thenonprofittimes.com/news-articles/study-nonprofits-lacking-leadership-management/

How to be an Excellent Board Member

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Register Now!

Local nonprofits need and want trained Board members who understand their responsibilities in nonprofit governance and how to support their nonprofit Executive Director. Our annual survey of nonprofit member organizations shows how paramount the desire for effective and well-informed board members truly is. Every nonprofit organization needs a Board of Directors and with the large amount of nonprofits in San Luis Obispo County, that means many community volunteers are needed to serve on nonprofit boards.

A 2018 Nonprofit Board Leaderships Study by Korngold Consulting, LLC and IMPACT 2040 found that business professionals that serve on a nonprofit board of directors “listen more carefully to different viewpoints, create more inclusive teams, and make more inclusive hiring and promotion decisions.” Comments from participants in the research noted that working with people from diverse backgrounds helped participants learn to solve problems by working together through healthy debate. Additional benefits are the board participants become more confident, better leaders, who are able to accept more responsibility and feel better qualified for promotion (McClimon, 2019). 
 
Serving on a board is important, but being a board member that brings excellence to the position is another step. In 2018, Spokes created a new signature program to respond to the need of San Luis Obispo County nonprofits for more trained Board members. The Board Academy is the first intensive board training for nonprofits on in San Luis Obispo County. The first academy was held in October, 2018 with 17 participants representing 12 different nonprofits.

The next Board Academy will be held on Saturday, March 23 from 9:00 am to 5:00 pm at Spokes. Lunch and snacks will be served and each participant will receive a binder of materials to take back and share with their board. You can expand your knowledge and be a board member of excellence by participating in the Board Academy. Register here.

Seven topics pertinent to the education of all nonprofit board members will be covered including an overview of the nonprofit sector nationally to locally, financial management and fiduciary responsibilities, insurance and risk management, legal and ethical responsibility of the Board, governance issues, board and executive Director interactions and fundamentals of fundraising. 
 
Resources: 

Beacon Economics (2013) Central Coast Economic Forecast. McClimon, T.J. (2019) Nonprofit Board Service Builds More Effective Business Leaders https://www.forbes.com/sites/timothyjmcclimon/2019/01/14/nonprofit-board-service-builds-more-effective-business-leaders/#22b7384c31a9

 
Takagi, G. (2009) Number of Directors – What’s the Best Practice? Nonprofit Law Blog.  http://www.nonprofitlawblog.com/number-of-directors-whats-the-best-practice/

The Purpose and Importance of a Gift Acceptance Policy

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A Gift Acceptance Policy is an important document for following best practices in nonprofit fundraising. This policy determines in advance which type of donations or gifts the organization will or will not accept. It might seem odd to think of turning down any type of donation when nonprofits are usually so strapped for funds, but that’s one of the primary benefits of developing a Gift Acceptance Policy: to anticipate and think through unusual situations related to donations or gifts to the nonprofit before they occur.

This type of policy is normally used to determine how to handle “Non-Standard Contributions” to the nonprofit. Having a policy for gift acceptance to review non-standard contributions is not legally required, but it is considered a best practice for nonprofit governance. The IRS defines these types of gifts as the “contribution of an item that is not reasonably expected to be used to satisfy or further the organization’s exempt purpose and for which (a) there is no ready market to liquidate the donation to convert it to cash, and (b) the value of the item is difficult to ascertain or speculative.” https://www.councilofnonprofits.org/tools-resources/gift-acceptance-policies

Therefore, if the potential contribution doesn’t further the mission and values of the nonprofit, it could be difficult to deal with and might cause a distraction from your normal activities. For example, a nonprofit that provides some form of housing might be offered a parcel of land with a home. While this might seem to further the mission of the organization, it could end up being a distraction if the property needs major repairs, has tax issues, or raises any other concerns that would make it hard (or impossible) to sell or use for the intended mission of the nonprofit. Trying to deal with the gift might take a long time and require countless staff hours, impacting your already limited budget.

Of course, there could be non-standard gifts that the nonprofit can handle and turn into an asset for the organization. The Gift Acceptance Policy allows you to determine where the offer falls, and can help head off any awkwardness with a donor if you know right away that the gift does not meet the nonprofit’s donation criteria. Having a clear-cut guide for gift eligibility also lessens any chance for misunderstanding or miscommunication with potential donors.

While you might not face the issue of a non-standard contribution, it is an advantage for a nonprofit to have this policy as it clarifies what the organization will or will not accept, and why. It lets the Board of Directors think through donation issues before they arise in order to better address them. The first consideration should always be that any gift accepted by the nonprofit must support and further the mission and values of the nonprofit. It also helps to define the type of in-kind contributions that the nonprofit can’t handle or dispose of easily or safely.

Your Gift Acceptance Policy doesn’t have to be elaborate. It can be as simple as a statement from the Board of Directors saying the organization “reserves the right to turn down any gift that is not in keeping with its mission or that it feels it cannot properly steward.” Alternatively, the policy can be more detailed and extensive depending on how the nonprofit is structured.

A Gift Acceptance Policy must be disclosed on IRS Form 990 by completing Schedule M, as well as reporting any non-cash contributions/in-kind gifts. (https://www.irs.gov/pub/irs-pdf/f990sm.pdf)

Upholding a Gift Acceptance Policy is a best practice for nonprofits. You can learn much more about these policies and get guidance to develop your own from the references in the article and this additional resource:  

Gift Acceptance Policy Template https://bloomerang.co/resources/templates/gift-acceptance-policy-template/

Is it Legal to Have an Ex Officio Director on Your Board?

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Do you have an Ex Officio Director on your board? Do you allow honorary directors on your board but don’t require (or allow) them to vote? If you answered “yes” to either of these questions, then you may be operating out of compliance with an important nuance found in California’s Nonprofit Corporations Code.

Fortunately, there are simple solutions to clear up these issues. Let’s explore the rules and steps to ensure that your organization is in compliance:

Non-voting board members cannot serve on California nonprofit boards.
Gene Takagi states, “any person entitled to attend board meetings without a vote is not a board member at all.” Non-voting board members can lead to confusion (do they count towards a quorum?) and can mislead other board members (do their opinions matter if they can’t vote?).

 To fix it: Move non-voting board members onto an Advisory Committee. Or, if you’d like to extend voting rights to these individuals, review your bylaws to make sure you have room for more board members and revisit the process of electing new board members. Your board can vote to bring them on as regular board of directors. If your bylaws state that non-voting board members are allowed, contact Spokes for a Bylaw Review to correct your bylaws today!

Ex Officio Directors automatically hold a position on your board because of a position that they hold outside of the board.
It’s rare to need Ex Officio Director positions in 501c3s. This position is more common in 501c6s, such as Chambers of Commerce, where the CEO /Executive Director often holds a position on the board. For further clarification, the NEO Law Group outlines many scenarios where this arrangement might make sense. However, if your organization labels non-voting board members as Ex Officio, you’ll want to correct this immediately.

 To fix it: Either (1) move non-voting members onto an Advisory Committee, or (2) invest them with the same voting rights and responsibilities of every other board of director serving your organization. To stay in compliance, ensure that your board policies, bylaws, and culture do not limit the actions of Ex Officio board members.

Honorary Director, Director Emeritus, and Advisory Director are misleading titles.
The term “director” is a legal definition that sets forth duties of care, loyalty, and obedience specifically for board members.

 To fix it: Identify new terms to honor these special advisors in your organization. To stay clear on the roles of your organizational volunteers, be certain not to use the word “director” for anyone who doesn’t serve on your board of directors.  

Advisory Boards are actually Advisory Committees.
Only one board can exist in your organization, and that is the board of directors.

 To fix it: Simply update your bylaws and policies so all advisory bodies are labeled as committees.

Staying in compliance with the Nonprofit Corporations Code is critical to your organization’s success. Your board of directors and advisory committees will function more efficiently once you clarify and adhere to these important regulations. If you have questions about board of directors versus advisory or honorary roles, reach out to Spokes for support at 805-547-2244 or [email protected].

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