What is the role of the board
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
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- 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
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- Transparency/Form 990
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- Watchdogs and raters
- Donor requirements and expectations
To raise more money
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- Reduced government funding
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- Increased demands for service
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- 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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