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The Value of Nonprofit Board Service

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Did you know there are more than 1,500 charitable nonprofit organizations in San Luis Obispo County? By law, each of them must be governed by a board of directors.

Serving as a director on a nonprofit board offers valuable benefits to both you and your community. You’ll develop leadership skills, expand your network, and make a meaningful impact on a cause you care about. Your volunteer service ensures the organization stays mission-focused and effective, supporting positive change and enhancing the quality of life in your community.

In the video below, Spokes CEO Michael Simkins addresses members of the San Luis Obispo Chamber of Commerce, sharing deeper insights into the benefits of nonprofit board service—and why it’s a valuable opportunity for everyone. He emphasizes the importance of local employers supporting and encouraging employee involvement, highlighting the transferable skills employees gain and bring back to the workplace.

Interested in serving on a nonprofit board but unsure about the responsibilities and level of commitment involved? Spokes offers a free, live 45-minute online class—Board Service 101—quarterly.

Register for an upcoming live session:

June 10

September 9

December 9

Or, view the following recording of a past Board Service 101 class:

Board Service 101

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Serving as a director on a nonprofit board offers valuable benefits to both you and your community. You’ll develop leadership skills, expand your network, and make a meaningful impact on a cause you care about. Your volunteer service ensures the organization stays mission-focused and effective, supporting positive change and enhancing the quality of life in your community.

Topics in this short introduction include:

Your responsibilities as a director
The three “duties” of a nonprofit director
Finding the right board for you
Typical time and financial commitment

Understanding the Basics of Board Roles

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It is probably fair to say that nonprofit board members desire to do a good job supporting their nonprofit and its leader. That includes board members who only attend a meeting periodically as well as the ones that try to assist in every way possible including guiding staff in their tasks (which is the job of the Executive Director!).  It’s easy to feel upset with board members who fail to carry out their roles properly as this can cause frustration to nonprofit leaders who don’t feel properly supported.

Certainly new and even returning board members are doing what they believe is best to assist the nonprofit organization. Community volunteers who join a board bring their own areas of expertise to the board table in hopes they can make a valuable contribution; however, the majority have never received formal training in board governance. And what a board member doesn’t know can be hurtful to relationships with staff and possibly even harmful to the nonprofit in some situations.

Listed below are fundamental areas where board members may need training so they can fully understand their responsibilities in guiding the nonprofit as well as its working relationship with the staff.   

  • Boards Govern: One of the most important keys for meaningful direction is to remember that the role of the board of directors is to govern, not manage, the nonprofit. Managing is the role of the nonprofit Executive Director (ED) or Chief Operating Officer (CEO). To govern means to carry out responsibilities as the legal guardian of the nonprofit organization. Each board member is accountable for the financial and organizational well-being of the nonprofit. They work with the nonprofit leader to adapt a strategic plan, budget, and other ruling policies and procedures. Once these guidelines are established, it is the role of the ED/CEO to put the plans into action by developing specific programs and activities needed to meet the stated goals.  
  • Boards Function as a Collective: Many board members do not realize that a board functions as one collective body to govern the nonprofit. No individual board member, including board officers, has the authority to act alone on behalf of the nonprofit. Board committees are a part of the team as well, and should not take action on behalf of the nonprofit without specific board approval. To maintain accountability, a board of directors should develop clear policies pertaining to the actions of board members which (1) define their scope of authority, and (2) offer a comprehensive guide for making board decisions. Providing structure to address routine as well as unexpected issues and concerns helps the board to function more cohesively.
  • Boards Determine Why: The board clearly defines the nonprofit’s mission and provides guidance as to what the nonprofit needs to do to best serve their clients. The ED/CEO and staff then develop procedures and initiate activities, programs or other methods to reach the client base. All board actions and activities should focus on promoting and supporting these specific mission goals.
  • Boards Determine Outcome: Determining outcomes that give the nonprofit credibility and success in the community is a crucial concern for the board. Every nonprofit needs to show some type of outcome in how effectively it communicates its mission and principles to the public. Outputs are the way the organization measures what it accomplishes within a given period of time. For instance, how many people are housed, how many vaccinations are provided, and so on. Results from the nonprofit’s programs and activities are evaluated by the board to assess how well these outputs measure characteristics such as attitudes, behaviors, or circumstances, as well as the effectiveness of the current programs and activities in general.
  • Boards Set Policy: Policies supplement the nonprofit’s articles of incorporation and bylaws by establishing a set of rules and procedures, such as the Board Member Agreement, Code of Conduct, Conflict of Interest, Document Retention and Destruction, Gift Acceptance, Nondiscrimination, and Whistleblower policies. Some nonprofits might need additional policies depending on their mission. Once in place, the ED/CEO and staff initiate procedures to ensure these policies are followed by the board and in all areas of the nonprofit organization.

Training a nonprofit’s board members is time and effort well spent. The more they understand the complexities of board and staff roles, and the more insight and governing expertise they acquire, the better prepared they will be to act skillfully as guardians of the nonprofit and supporters of its leaders. Spokes offers its full-day Board Academy as well as individual trainings for specific boards upon request. Give us a call to discuss your board training needs.  

Additional Resources:

What is the Meaning of Board Governance?

https://boardmanagement.com/blog/meaning-board-governance/

The Difference Between Governance and Management

The Difference Between Governance and Management

Implement a Monthly ED/CEO Report to Keep Your Board Informed

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As a nonprofit leader (ED/CEO), it can be difficult when members of the Board of Directors aren’t familiar with or knowledgeable about the overall operations of the organization—especially since the board is the governing body of the nonprofit and their decisions directly impact how efficiently and effectively a nonprofit can function. This can lead to some challenging conditions, especially when decisions are made that aren’t in line with the nonprofit’s mission or its strategic plan. 

While you can’t compel board members to stay informed, many EDs/CEOs put together a monthly informational board packet before a board meeting to update their board members and keep them in the loop about the nonprofit’s ongoing activities. Now, I know many of you are saying, “I already really try to do that, but it’s not working!” Believe me, I hear you.

There’s nothing more exasperating than sending out your board packet with all of that great material, only to have board members ask for a copy of the packet when they arrive at the meeting. And as the meeting progresses, it can become obvious that some of the board members didn’t read the packet beforehand and aren’t prepared to make fully informed decisions. Without a clear, coherent path for the organization’s leader and staff to follow, frustration, burnout and lack of goal attainment may soon follow.

So . . . what’s a CEO/ED to do?

The nonprofit is competing for the attention of board members who, like many of us, are bombarded with information overload in their professional and personal lives. Take a page from the “less is more” concept of minimalism and do some “decluttering” for them by preparing a condensed, yet highly informative Executive Director/CEO Report (sometimes called an Executive Summary). You can send this to all board members separate from or along with the full board packet. A busy board member is much more likely to read an ED/CEO Report even if they don’t take time to review the complete packet.
 
Five Suggested Areas to Include in the CEO/ED Report:

  1. Updates on strategic goals: The organization’s strategic goals should guide the daily operations of your nonprofit, and board members should have a part in developing and maintaining these goals. Therefore, they need to know what’s going on each month that impacts aspects of the overall strategic goals. Give a brief report on activities that affected these goals each month.
  2. Financial overview: While a financial report should be given at each meeting, the organization leader could provide a brief summary of the primary facts and figures the board needs to know. This could include total expenses, income, and cash available at the end of each month, along with a summary of any recent fundraising activities and results.
  3. Updates on priority matters: Are you waiting for a big donation to arrive? Is there news about a tax or compliance issue? Include these announcements in a regular section of the report to keep the board updated.
  4. A connection to the mission: What has the organization done this month that highlights its mission? Who has been served, and where did you make an impact? Let the board know the good work associated with the nonprofit’s mission by sharing a member testimonial or short story to illustrate the positive activity.
  5. How can the board help: Many board members are happy to provide a helping hand if asked, but they often have no idea about what to do or how to provide support. Include a section suggesting ways the nonprofit could use the expertise of your board members. This could be as simple as reminding them to seek out new board members with particular skill sets, or requesting assistance on a specific volunteer task during the month.

In conclusion, providing board members with a concise executive summary each month can: (1) strengthen the communication between the CEO/ED, board members and staff, and (2) enable board members to formulate more well-considered decisions at board meetings. Conscientious board members need and should want to know what’s happening in the organization. The monthly ED/CEO Report gives board members insights into daily nonprofit activities, and highlights the hard work that the leadership and staff tackle every day.
 
Resources for developing an ED/CEO Report for the Board of Directors:
 
How to Write a Good Board Report
https://www.joangarry.com/board-report-template/
 
Board Members Zoning Out? Stop Reading the CEO Report
https://blog.boardsource.org/blog/board-members-zoning-out-stop-reading-the-ceos-report

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/

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