Spokes | Resources for Nonprofits

Find Us On Social Media:

Do we have to follow Robert’s Rules?

by

If your organization’s bylaws say your meetings will follow Robert’s Rules of Order, then yes, you do have to follow them—but do you follow them? Robert’s Rules are complex! It is very difficult to follow them to the letter unless you have a dedicated parliamentarian available. I’ve been on quite a few boards and none of them truly followed Robert’s Rules.

Robert’s Rules provide a method for making group decisions, but there are alternatives that may better serve your board of directors. Here are some examples.

Consensus Decision-Making: This approach involves discussion until all participants can agree on a single course of action. It emphasizes cooperation and collaboration, seeking to address concerns and find solutions that everyone can support.

Consent Decision-Making: This approach involves seeking consent from all members for a proposed course of action. Instead of requiring full agreement, consent decision-making aims to ensure that no member has strong objections to the proposed action.

Democratic Voting: Similar to Robert’s Rules, democratic voting involves members casting votes for different options, and the option with the majority of votes wins. However, the rules and procedures may be simplified compared to Robert’s Rules.

Each of these methods has advantages and disadvantages. I encourage you to check out thedecider.app. It’s a cool tool to help you choose a decision-making model that suits the decision your group needs to make.

And don’t forget! If you decide to adopt a different method, don’t forget to revise your bylaws accordingly.

Can the Executive Committee determine the ED’s pay?

by

Our bylaws state that the Executive Committee has full authority/responsibility to review the CEO’s performance and to set compensation, and that the Board “shall be informed” of the Committee’s decision. Is this OK?

Technically, the answer is yes—assuming that all members of the Executive Committee are, in fact, directors. Even so, the board as a whole still has responsibility for the process and outcome.

That said, it’s generally recommended to have a transparent and fair process for determining the executive director’s salary. While the executive committee certainly may play a role in salary discussions, it’s often advisable to establish a compensation committee or involve the full board in the decision-making process.

Having a broader group involved can bring diverse perspectives and ensure a more objective approach to determining the executive director’s salary. This approach is in line with principles of good governance, accountability, and transparency, which are important for the credibility and effectiveness of nonprofit organizations.

Two things to keep in mind:

  • Although the IRS does not provide specific dollar amounts or an acceptable range of compensation levels, they stipulate that compensation must be reasonable and not excessive.“Reasonable” is defined as the value that would ordinarily be paid for like services by like enterprises under like circumstances.
  • Nonprofits filing IRS Form 990 must describe the process they use to approve executive compensation as part of the nonprofit’s responses on the annual return, IRS Form 990, Part VI, Section B, line 15.

Applied Wisdom

by

Looking for ways to up your leadership game? On a special website, former Applied Materials CEO Jim Morgan shares leadership and management principles proven to be effective in nonprofit, philanthropic and business contexts. Jim is a well-known Silicon Valley high-tech executive and philanthropic leader.

Explore eight simple insights that have consistently delivered great results supporting the nonprofit sector in complex, real-world situations. On the site you can download Jim’s free booklet, watch videos, and sign up for a weekly reminder.

Visit Applied Wisdom for Nonprofits

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

by

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

Does Your Board Work or Govern?

by

Do you know if your board is a working board or a governing board? Although we use these terms all the time, this is a trick question! All boards are governing boards. Their first and foremost responsibility is managing the organization: making policy and strategy decisions, overseeing and monitoring organizational performance, and ensuring accountability. Volunteer-run or small-staffed organizations’ board members may also have working responsibilities in addition to governance responsibilities, such as program delivery. Because program delivery is often the most fun part of the job, it’s natural to want to focus your time and energy on direct service.

However, things get sticky when procedures, policies, and roles aren’t clearly defined. When board members disagree on the difference between the “must do” responsibilities and the “nice to do” activities, it can cause friction or result in compliance issues.

It may be time to review your activities and ensure that governance comes first if:
• your board meetings continually go off topic,
• committee updates take more than ten minutes of a board meeting, or
• your board spends more time discussing details than big picture items.

Spokes’ Board Academy provides the perfect opportunity to explore:

• Board Member roles and responsibilities
• Governance to achieve your mission
• Legal responsibilities of board service

Whether you’ve served on your board for one year or ten years, this training will give you new tools and knowledge to make your board function more effectively.

Want to learn more about working versus governing boards? Compass Point has more to say on the subject here: https://www.compasspoint.org/board-cafe/working-board-vs-governing-board

Guiding nonprofits to achieve their goals through support and expert resources.

How Can We Make A Difference Together?

Spokes welcomes local professionals who would like to share their expertise in support of the nonprofit sector.

Get Started Contributing

Recent Articles