Nonprofit Kit For Dummies. Stan Hutton
Hiring and working with the executive director
A nonprofit board is expected to hire the organization’s executive director. Of course, many nonprofit organizations operate with no paid staff, but if your nonprofit does have employees, finding the right executive director is one of the board’s most important tasks. See Chapter 11 for information about hiring paid employees.
A board works with its executive director to set goals and objectives for the year. Board members shouldn’t look over the director’s shoulder every day, but they should have a good idea of the director’s work plan and should ensure that her efforts are in line with the agency’s purpose.
Overseeing the organization’s finances
A board must make sure the organization has the resources to carry out its goals. As part of this duty, many boards are active in fundraising. But a board also is responsible for reviewing the organization’s budget and staying informed of the organization’s financial situation. Nothing is more dismal than finding out, for example, that an organization has been ignoring its payroll taxes, and could create personal liability for the directors (check out Chapter 7 for more info about the board’s personal liability). A word to the wise: Insist on good financial reporting. At a minimum, have the board treasurer (or perhaps the executive director or bookkeeper, if you have one) prepare monthly financial reports and distribute them to your board for review.
ESTABLISHING AN ADVISORY BOARD
Some organizations form advisory boards, which have no governance responsibilities. Advisory boards are optional, and how they operate and relate to the governing board of directors varies widely among different nonprofit organizations. Generally, their role falls into one of the following two categories:
Members provide advice and guidance because of their professional expertise.
Prominent names are be listed on the organization’s letterhead.
We favor advisory boards that actually give advice (which generally means you have to ask for it) — even if they do so only once a year. Some organizations also use advisory board appointments as a way of getting to know potential board members.
Sharing responsibilities among the board, staff, and volunteers
Defining roles causes problems for a number of nonprofit organizations. Should the board of directors be involved in day-to-day management decisions? No, probably not. An executive director and their staff don’t need board members to approve every management decision that comes along. The board must trust the staff to run the organization. To put it simply, the board sets the overall goals and policies, and the staff implements them. But (and this is a big but) many nonprofits have limited staff or even no staff. What happens when the organization’s work is done by the board and other volunteers?
In the case of volunteer-run organizations, board members must wear two hats. Most importantly, they must exercise their fiduciary responsibilities. When they meet as a board of directors, they must see the larger picture and make group decisions that benefit the organization and its programs and clients. But, at the same time, when they have to do the hands-on work needed to provide the services and perform the day-to-day tasks of running a nonprofit, board members must act as if they were employees or volunteer staff members. They may even hold regular, unpaid volunteer jobs with job descriptions and scheduled hours. Confusing, isn’t it? Still, anyone who serves as both a board member and a volunteer or staff member needs to keep this distinction in mind.
Recruiting the Right People for Your Board
You don’t want just anybody to serve on your board. You want to choose the members of your community who believe in what you’re doing and who will attend all your meetings, advocate for your programs, provide honest and ethical oversight to the organization, make regular and generous donations, and sweep the floor on weekends.
Perhaps, not surprisingly, you won’t find many board members who fit this description. Even so, the following three traits are critical to the success of the organization:
Believing in the mission
Being a strong advocate on behalf of its programs
Serving the organization as a careful and honest board member
Sure, having wealthy members who do the dirty work when needed is nice, but, most importantly, you must find board members who understand and believe deeply in your work. Showing up for board meetings is a nice habit, too.
Think seriously about the skills that board members bring to your organization. Do you need an accountant to set up financial systems? A public relations specialist to help with media campaigns? An attorney to help with legal matters? Yes, you probably do. But don’t expect the accountant to do your audit or the attorney to represent you in court. You need a disinterested professional to do that work.