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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/

Credible Crisis Coverage

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Spokes would like to thank Leslie Jones, Spokes Consultant and promotional marketing consultant for guest-writing this article. 

When a local natural disaster, school-related emergency, environmental or health crisis unexpectedly occurs, is your nonprofit ready to be the “voice of expertise” when the media and community start calling? Do you have an effective, written plan in place that can quickly be implemented? Are you prepared to be a reliable source of information?

Delving deeper into our ongoing disaster preparedness theme, we offer a summary of key steps for your nonprofit to build a “community-in-crisis” communications strategy plan.

  • Choose a primary spokesperson and a reliable support team. Your team can include staff, board members, volunteers, and community members. Explain the individual and collective roles.
  • Ensure that everyone on that team needs to share the same outgoing message. It’s helpful to utilize these questions: Who needs to know? What do they need to know? When do they need to know?
  • Prepare current educational fact sheets and statistics to easily share when a crisis occurs. Remember to keep it tightly focused and relevant to your nonprofit’s field of expertise. At the time of the event, you can add relevant information.
  • Keep website and social media pages updated with changes in services/operations.
  • Reconnect with your entire team after the crisis has passed. Brainstorm and openly discuss successes, needed improvements, and challenges.
  • Revise your written action plan based on that follow-up meeting and update all necessary media materials.

For a helpful media strategy checklist from nonprofitrisk.org, click here.

By preparing now for an unanticipated crisis, your nonprofit creates an opportunity to receive heightened, credible coverage. Most importantly, your nonprofit is able to effectively support and assist your community when it needs you the most. That is a true success story!

Hardest Part of Board Member’s Job?: Orienting a New Executive Director

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Imagine starting a job where you have 5 or more bosses with whom you meet once a month. They are thrilled to have you on board – relieved, really – because they haven’t been intimately involved in the day-to-day operations of the organization and they know that there is lots of work to be done. Staff is glad to have you on board, too, and is anxious for direction.  Where do you start?  How do you make sound strategic decisions when you’re still trying to figure out where the bathrooms are located and remember everyone’s name?
This scenario may seem like a bit of an exaggeration, but, sadly, it replays in nonprofits of all sizes again and again, year after year.  The “costs” of replacing a key executive in any type of organization are costly because of the requisite learning curve. Flattening that learning curve is especially important for nonprofits – both because they are working with fewer resources than their for-profit counterparts and because the services they offer are critical to clients who rely on them.  Ironically, right at the moment that the board of directors sighs with relief after hiring a new executive director, that’s when the real work needs to begin.
In their article, “Boosting Nonprofit  Board Performance Where it Counts,” published in the Stanford Social Innovation Review, July 16, 2014, Lisa Walsh, Libbie Landles-Cobb and Leah Karlins offer 5 specific strategies for nonprofit boards to employ to help a new executive director transition more successfully to your organization:
  1. Do your homework in order to hire well.
  2. Collectively set the new leadership agenda.
  3. Get clear on goals.
  4. Go slow on orientation to go fast on the job.
  5. Make performance management routine.
For more specifics about each of these recommendations, read the entire article here.

Create Cultural Values, Create Value for Your Nonprofit

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Lots of nonprofit organizations tend to “skip” the creation of cultural values for their organization.  Are you one of them?  If so, you may be missing a valuable opportunity to establish a tool that will help you more effectively identify and recruit board members, staff and volunteers who can best move your mission forward.

Most business management mantras will dictate that having the “right” team members is critical to the success of any organization.  But, how do you know if your team members are the “right” ones?  How do you evaluate or identify if a prospective team member understands and embodies the key values needed to realize your mission if you haven’t yet defined those values for the organization as a whole?

The value of your values may start with building your nonprofit’s leadership, staff and volunteer teams, but that value grows as it permeates every layer of your organization.

Take strategic planning, for instance.  After confirming your vision and mission, it’s important to clarify your organization’s values – the “rules of engagement” for how your team (board members, staff, and volunteers) will treat each other, your donors and, most importantly, the men, women and children you serve.  If your organization is fortunate to have a broad team with individuals independently working towards common strategic goals, its important that they share and abide by a core set of values to ensure that they can a) identify and recruit more of the “right” folks, as needed; b) meet minimal expectations for individual performance and c) create consistency in the interactions they each have with your organization’s various external stakeholders.Remember, too, that the work of a nonprofit (perhaps life, in general) rarely progresses in a linear fashion.  Unforeseen and unexpected events pop up all the time.  Having great policies in place will help you weather the worst case scenarios that may arise from most unforeseen events.  But, what about that exceptional event that falls outside all of your policies?  What then?  Think of your organization’s values as an umbrella insurance policy for the work of your organization.  When all other policies fail to provide adequate direction for a specific circumstance, your organizational values serve as an ultimate guide for each of your team members to help them make the very best decision possible.

Values are most valuable when they are regularly reviewed, modified as needed and disseminated throughout every level of your organization.  If it’s been a while since your organization has reviewed its corporate values – or if your organization doesn’t have any written values – consider allocating 15 minutes of your next board meeting to have a thoughtful review or discussion about them.  Use Spokes’ Core Values Worksheet to help identify what values are most critical for your organization at this point in your history.  Starting from scratch?  Identify at least three core values as a start.  Know that the board is always able to add new values as they may be identified – or rewrite previous ones.

To help you start the conversation about values within your organization, consider sharing this video: http://bigthink.com/videos/culture-at-30000-feet-above-ground from Dr. Frances Frei, Professor, Harvard Business School, and Anne Morriss, Chief Knowledge Officer of Concire Leadership Institute.  (The video is directed to for-profit companies in the service industries; please remind your colleagues that every nonprofit is a service organization.)

Nonprofit Success Story: Dunes Center

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Guadalupe-Nipomo Dunes Center

Dunes Center Receives More Grant Dollars! Spokes helps!

Executive Director Doug Jenzen, Guadalupe-Nipomo Dunes Center, shares his success story.

The Goal

“One of my goals was to revamp our educational programming, and I needed a little bit of inspiration on how to obtain funding to do so.”

 

Action Taken

“I attended the workshop [Designing Programs for Better Grant Proposals] last year shortly after I was hired by the Dunes Center and during the time in which the organization was in the middle of a complete restructuring.”

 

A Valuable Lesson

“The most valuable lesson I learned from the workshop is that you need to make a case (or an argument) for why the funding agency you’re applying to should fund your organization’s program.  I look at it like I’m writing a thesis statement for a paper similar to what was required in college.”

Successful Results
  • The Dunes Center has received every grant (at least partially) that Doug has written since he attended the workshop.
  • By extension, the Dunes Center has been able to double the size of their educational programming to serve 8,000 elementary school children in 2013 and begin including the arts in their regular STEM programming.

Learn more about the Dunes Center on their website.

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