Form and Manage a Nonprofit Board

The Role of a Nonprofit Board

A nonprofit board plays a critical role in governance, fundraising, and overall organizational strategy. Here’s what a nonprofit board typically does:

• Approves budgets and audits: The board ensures the financial health of the organization.
• Manages CEO performance: The board hires, fires, and conducts annual reviews of the CEO.
• Fundraising: Board members provide access to social networks, credibility, and fundraising opportunities. They may be involved in fundraising directly or support the organization by opening doors to potential donors.
• Governance: Nominate board members and clarify how decisions are made.

The board’s structure usually consists of the following roles:

• Chairperson
• Vice Chair
• Secretary
• Treasurer

Most boards meet quarterly, and you may also have committees (like finance, audit, or governance) that handle specific areas and report back to the board.

Advisory Board vs. Governing Board

It’s important to distinguish between a governing board (or board of directors) and an advisory board. The governing board is responsible for making core decisions, such as budget approvals and hiring the CEO. They are also legally and fiscally accountable for the organization.An advisory board, on the other hand, provides support in specific areas and lends credibility but does not have the same decision-making authority or responsibility as the governing board. Advisory board members are often key figures who help raise the organization's profile but may not be deeply involved in its operations.

How to Recruit Board Members

When recruiting board members, you should consider the famous "three Ts" – time, talent, and treasure:

• Time: Do they have the time to be actively involved? If not, they might be better suited for an advisory role.
• Talent: Do they bring specific skills, such as financial, legal, or industry expertise?
• Treasure: Can they contribute financially or open doors for fundraising?

Pro Tip: Look for a skills matrix when recruiting members. This ensures that you are covering all areas essential for your organization’s growth—whether it's legal, governance, or industry expertise.Start small by focusing on 3-5 people you trust and can work well with. Slowly expand as the organization grows and its needs evolve. Often, early board members are close to the organization, like friends and family, but as you grow, it’s important to professionalize the board with key experts and strategic members. You always want some independent board members who can offer fresh eyes. An odd number of board members is often helpful for voting.

Board Committees: What to Expect

A board committee is a subgroup of the full board focused on specific tasks, like finance or governance. Common committees include:

• Finance Committee: Reviews and recommends budgets.
• Audit Committee: Oversees audits and risk management.
• Governance Committee: Manages CEO reviews and board performance.
• Development Committee: Focuses on fundraising and donor development.
• Nominating Committee: Sources and vets new board members.

Committees generally meet quarterly, but additional meetings may be scheduled based on organizational needs. In addition, topical committees may be formed. Ad hoc committees can also be established for specific issues; these meet only as necessary and are dissolved once their work is complete.

Managing Board Meetings

To make the most of your board meetings:

• Pre-read materials: Send out materials, like with a board deck or and perhaps a CEO updates, before the meeting. This ensures everyone comes prepared for discussion rather than using meeting time for updates.
• Focus on discussion: Avoid using meeting time for updates that could have been shared in advance. Instead, focus on strategic discussions, decision-making, and brainstorming.
• Voting process: When a decision needs to be made (such as approving a budget), make a formal proposal, get it seconded, and hold a vote. Ensure these actions are documented in the meeting minutes for legal purposes.

Fundraising and the Board’s Role

Board members play a crucial role in fundraising. Some may make personal contributions, while others may open doors for additional funding through their networks. A common practice is a give-or-get policy, where board members either give a certain amount personally or “get” donations from their network. This demonstrates a 100% commitment from the board, which many donors or foundations look for when considering grants or donations. Pro Tip: Ensure all board members are giving something, even if it's a modest amount, to show full board commitment when you're applying for grants or seeking large donations.

Running an Effective Board: Key Tips

• Clear expectations: Set expectations for board members from the start, including time commitments and financial contributions. Use written policies to ensure transparency.
• Board culture: Cultivate a positive board culture by encouraging teamwork and engagement. Small but effective boards are better than large ones with low participation.
• Term limits: Implement term limits to keep your board dynamic and allow for new ideas while maintaining continuity.

Pro Tip: In-person board meetings often foster stronger engagement, but a primarily virtual schedule with one in-person meeting each year can be effective if travel is a concern. Strive to balance time between productive work and social interaction—board members who find the experience rewarding are more likely to remain committed.