Stan Hutton - Nonprofit Kit For Dummies

If the board has standing, or permanent, committees, the board president may appoint committee chairpersons, or they may be appointed by the board. Typical standing committees are finance, development or fundraising, program, and nominating committees. Other possible committees that may be either standing or ad hoc — a temporary committee organized to deal with time-limited projects — are planning, executive search, investment, special events, and facilities. The following list outlines the responsibilities of common standing committees:

Development: Sets fundraising goals and plans fundraising activities for the organization in consultation with the board president and executive director

Finance: Assists the treasurer in overseeing financial reports and official tax filings, making budgets, and maintaining relationship with professional accounting firm, if applicable

Nominating: Recruits new board members and nominates board officers for election to their positions

Program: Oversees and advises on the program activities of the organization

Board committees make regular reports to the full board about the organization’s activities in their particular areas. Board officer terms and the number and type of standing committees should be written into the organization’s bylaws.

If your organization is large enough to conduct an annual financial audit, your board may be legally required to appoint an audit committee. Be sure to check the laws in your state. You may not be permitted to include the board chair or treasurer on the audit committee.

Executive committees are standard groups on some larger boards of directors. Usually the members of the executive committee are the officers of the board, but the committee sometimes also includes the chairs of the standing committees. The executive committee may hold regular meetings to set the agenda for the meetings of the full board and to advise the board president, or it may come together on an as-needed basis. Sometimes an organization’s bylaws empower the executive committee to make decisions on behalf of the full board in an emergency or in other special circumstances.

Boards of directors exhibit all the characteristics of small groups, and maybe even families: Friendships develop, alliances form, and disagreements occur. Over time, the group develops routines and habits that help make members feel comfortable with one another and help guide the board’s work. When a new member joins the group or when a prospective new member visits, the existing members need to make that person feel comfortable and share with them the collective wisdom they have accumulated.

Invite a prospective board member to observe at least one board meeting before electing them to membership. That way, the new member gets a chance to see how the board operates, and the current members have an opportunity to size up the new person. Encourage the prospective member to ask questions. Also, if your nonprofit provides programs — such as childcare, a health clinic, or a music school — be sure to give your prospective board members a tour of the facilities before they join.

When asking someone to serve on your board, don’t shy away from sharing a clear picture of the work to be done. You may be afraid that your prospect will say no if it seems like too much work. However, keep in mind that being asked is an honor, and contributing good work to a good cause is satisfying. Besides, if the person does decide that you’re asking too much, isn’t it better to know now rather than later?

A packet of background materials about the organization and board procedures can help new members get up to speed quickly. The following information is useful for orienting new members:

Board job descriptions outlining responsibilities and expectations

Board minutes for the past two or three meetings

Articles and bylaws

Conflict-of-interest policy (if you have one)

Calendar of the organization’s events and scheduled board meetings

Description of programs

Financial audit or financial statement

Form 990 for the past three years

Mission statement

Names, addresses, and phone numbers of other board members

News clippings about the organization

Organizational plan (if one is available)

This information may seem like a lot of reading — and it is. But even if a new board member doesn’t read everything from cover to cover, they at least have the reference material when they need it.

We also suggest that the board president or the executive director meet with a new board member soon after the person begins serving on the board, both to welcome them and to answer any questions.

As a general rule, we think paid staff shouldn’t be board members. The situation can become too complicated. For example, conflict of interest is always a potential problem, especially when board and staff have different priorities, such as when employees want raises but the board says no.

Some exceptions to the rule do exist, though. In fact, many nonprofits have at least one staff member on their boards. In start-up nonprofits, for example, founders frequently serve as both board members and staff members. This situation isn’t surprising. Who’s better suited to bring the vision and passion needed to create a new organization than the person who formed it in the first place? In many new nonprofits, of course, paying the staff isn’t even possible; resources are so limited that all work is done on a volunteer basis.

If a founder or another staff member serves on the board, we recommend that they not be elected board president because doing so tends to put all responsibility for vision and leadership in a single person’s hands. Sharing that leadership can be an important first step toward broadening an organization’s base of support. In addition, the executive director should always be the buffer between the staff and board. This helps keep things cleaner and less complicated.

Laws vary by state, but in many cases, having a paid staff member on your board is permitted. For example, under California nonprofit corporation law, as many as 49 percent of the members of a nonprofit board are allowed to receive compensation from the nonprofit. But the standards of governance set forth by the BBB/Wise Giving Alliance say that a board should include no more than a single compensated member (or 10 percent of members for larger boards). Be sure to check out and follow the nonprofit corporation law in your state.

If you spend any time around nonprofit staff, you’ll probably hear a few complaints about the board of directors. They may say, “I can’t get my board to do anything” or “I can’t get them to face hard decisions or raise money.” Worst of all, you may hear, “I can’t get them to show up to meetings.”

Motivating the board is an important part of any nonprofit leader’s job. Keeping members well informed so that they can make thoughtful, appropriate recommendations is essential. Sometimes your most important task is gently steering the board’s attention back to the organization’s mission and immediate needs. Whether or not your nonprofit has paid staff, you can take steps to help the board do its work well.