NANOE Says, “Strong CEOs Build Strong Nonprofit Boards” is NANOE President Louis Fawcett’s take on boards of directors that actually work. As the fastest growing alliance of nonprofits in the world, NANOE (National Association of Nonprofit Organizations & Professionals) often receives this question from our members:
“What are the keys to having strong nonprofit Boards?”
Behind this question is the stark reality: the traditional expectations and norms for how Boards work in nonprofits no longer work in the 21st century…especially for small and medium nonprofits. This is why, after more than 30 years of nonprofit experience, we have devised new keys to strong boards.
NANOE Says, “Strong CEOs Build Strong Nonprofit Boards”
Here are the seven keys to strong nonprofit Boards (especially for small nonprofits with annual budgets less than $5 million):
1. Recruit a small Board of business professionals who understand enterprise growth.
How many hours have you wasted on preparing for Board meetings where 1/3 of the Board does not attend, 1/3 is disinterested and distracted, and only 1/3 of your Board participates and understands your organization?
While conventional wisdom teaches nonprofits to have large boards of influential philanthropists, NANOE’s research indicates this does not work in the 21st century, particularly small and medium nonprofits. Rather, consider building a Board of five to six experts in particular subject areas such as: marketing, legal, sales, social work, human resources and nonprofit management.
Don’t waste any more time on the 2/3 of your Board who are just marking time and building their volunteer resumes. Instead, change your organization’s structure to include a small, agile Board of business professionals who want to see your nonprofit grow.
2. Meet regularly one on one with each Board member.
How much frustration have you experienced in Board meetings? How many more wasted meetings do you need to convince you this is not working? Have you ever enthusiastically asked your Board to connect you with new donors or provide guidance on a particular issue? What do you get? Silence. Crickets. Nothing. Then you spend the rest of the week wondering what you did wrong…but you are not the problem. The problem is the structure.
Instead of continuing the frustration of dysfunctional Board meetings, consider meeting one on one with your Board members throughout the year. Get to know them personally. Provide updates on organizational growth and challenges. Float new ideas to your Board members one at a time to test and refine your plans. This approach allows your Board members time to process and give thoughtful responses, rather than expecting a positive response in a group setting (which never works).
3. Treat Board members as business professionals, not as donors.
How many times have you heard that you need a Board comprised of your largest donors? While this may work for hospitals and universities, it does not work for small nonprofits. There simply aren’t enough philanthropists who wish to serve on Boards to fill 1.5 million nonprofit Board roles. Instead, you end up with the bank Vice President. She can help you with advice and accountability, but she is not going to be a major donor. Stop requiring your Board to fundraise. Stop trying to guilt your Board into giving. Instead, seek their wisdom as colleagues.
4. Focus the Board on Advice & Accountability.
The Board’s role should be to hire a strong CEO, evaluate her performance, support her vision and, if she is not growing Impact and Revenue, replace her with a different strong CEO.
The Board should not be micro-managing the budget, organizational structure, staffing, operations, fundraising, events, marketing or strategic planning. Rather, the Board provides expert advice (when called upon) for the CEO and holds her accountable for the goals she sets for the organization.
5. Support the strong CEO.
The Board expects the strong CEO to perform in the only two areas that matter: Impact & Revenue. Growing Impact means the organization is changing and saving more lives, in accordance with its mission. Growing Revenue means the organization is investing in fundraising and diverse streams of income in order to fund short and long term goals.
The Strong CEO creates a three-year budget that shows growth in programs, capital projects and reserves/endowment. The Board’s role is to support this vision. The Strong CEO sets the goals for growth and then invites the Board to critique her performance accordingly.
6. Comply with IRS regulations.
By law, the Board acts as the responsible party in fiduciary matters. This means the Board is aware of IRS regulations and requires the CEO to ensure all regulations are followed on an annual basis. The Board should be aware of the annual 990 filing and how to interpret this document.
7. Make Board service FUN!
What would it look like to serve on a Board that is fun? Rather than long, laborious meetings reviewing reports and spreadsheets, Board meetings should be quarterly and celebratory in nature. Reports on finances and programs can be sent ahead of time by email as part of the consent agenda for the meeting.
When the Board meets, this becomes a time to fellowship, celebrate the accomplishments of the staff and learn about new initiatives. NANOE encourages meetings to become less about the business of the nonprofit and more about time for relationship building and breaking bread together.
We know these changes in Board function, structure and focus won’t occur overnight. However, repeatedly, organizations that implement these seven keys have greater impact, higher revenue, longer tenured staff, grateful volunteers, happy donors and community pride. These results are why nonprofits exist!
Here’s the bottom line: we are here to change and save lives. This means we need to monetize every hour of every day to better help those we serve. The seven keys to strong boards free your organization to do just that!
NANOE Says, “Strong CEOs Build Strong Nonprofit Boards” was first posted at Inside Charity
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