Managing Nonprofit Boards

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PPPA 6034

Managing Nonprofit Boards

Session 1

Introduction

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PAD 6034 Topics

  • Responsibilities and duties of governing boards
  • Board organization and operation
  • Board best practices
  • Relationship between the board and the CEO
  • Board development and governance reform
  • The board’s role in fundraising

Nonprofit Organizations

  • Private organizations
  • Public purpose
  • No ownership rights
  • No distribution of profit
  • Mission-driven
  • Corporate form (state charters)
  • Tax-exempt (federal and state)
  • Deductible gifts to 501(c)(3)- called “charitable nonprofits”

Overview of the Nonprofit Sector

Government

Nonprofit sector

Business

Religious

Congregations

(Constitutionally

protected)

Organizations tax-exempt under other IRC sections

Organizations

tax-exempt under

IRC Section 501 (c)

501 (c) 3

Charitable

501 (c) 4

Advocacy

(Social Welfare Organizations)

Other 501 (c)

sections

Private

foundations

Public

charities

SOURCE: Adapted from Independent Sector

e.g., 527

Governing Boards

  • Directors, trustees, regents, visitors, overseers, etc.
  • Volunteers
  • Self perpetuating, elected,

appointed, hybrid

  • Moral, legal, and functional responsibilities
  • Responsibilities to whom?

The Board’s Responsibilities

To society:

Adherence to mission and law

Accountability for resources and results

Responsiveness to constituency needs

Indicated qualities:

Wisdom and integrity

Expertise (on programs and finances)

Diversity reflective of constituencies served

To the organization:

Advocacy and authenticity

Protection of autonomy

Fiscal stability and sustainability

Indicated qualities:

Social stature

Influence

Wealth and/or
access to wealth

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Growing Pressures

To govern better

  • Legislation/voluntary guidelines
  • Transparency/Form 990
  • Watchdogs and raters
  • Donor requirements and expectations

To raise more money

  • Reduced government funding
  • Increased demands for service
  • Customer/client expectations
  • Increased competition for philanthropy

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How Boards Are Responding to Competing Demands

To Strengthen Governance

  • Smaller boards/tiered boards

Governance committees

Board development programs

Term limits

Diversify membership

Use of advisory councils

To Strengthen Fundraising Capacity

Minimum gift/give or get policies

Fundraising committees

Recruit board members of affluence, influence

Use of advisory councils

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Key Questions and Issues

  • What is the role of the board?
  • Who leads the organization – the board or the CEO?
  • What should be the relationship between the board and the CEO?
  • How can boards be made more effective, in governance, fundraising, and other ways?
  • What type of people should serve on the board?
  • How to balance the board’s competing responsibilities?
  • How to keep the board focused on what’s important?
  • How to make board service rewarding?

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