The 4 Functions of a Nonprofit Board

The world of nonprofit governance is a mystery to most people- even those on nonprofit boards!  How should board members spend their time?  What are a board’s responsibilities?  What should the rest of an organization expect from the board?

We asked a couple of our governance consultants to help us sort out the responsibilities of a nonprofit board.  As it turns out, there are 4 main functions of nonprofit boards, although the amount of time spent on each varies depending on the size of your organization (more on that later).

Function #1:      Executive Oversight

The first responsibility of the board is executive oversight.  It is the board’s responsibility to hire, evaluate, and compensate the Executive Director.  The board must also be mindful to monitor the finances, budget, and key performance indicators for the organization.  Finally, the board must provide leadership consistent with the mission of the organization.

 

Function #2:      Operational Support

Board members may find themselves involved in important day-to-day work, especially in smaller organizations.  For example, board members may be involved in running a fundraising campaign or writing grant proposals.  Board members bring with them a wealth of experience and many skills.  In smaller organizations especially, board members can make a huge difference in the daily operations of their organization.

 

Function #3:      Resource Development

The top responsibility for board members it to make donations happen!

Introducing new donors to your organization should be at the forefront of every board member’s mind.  Maintaining relationships with the donors you already have is also extremely important.  Keeping your current donors up to date on the current happenings of the organization or writing personalized thank you notes go a long way towards fostering good will.

 

Function #4:      Self-Renewal

Recruiting new board members will keep fresh ideas flowing and help an organization to continue to move forward.  Staying stagnant will only hurt a board and recruiting is the best way to stay alive!  Self-Evaluation is also important is a board’s self-awareness.  By setting and tracking goals, boards can gain great insight about their own performance and how they can better help their organization.

 

The time spent on each of these 4 functions varies based on the size of the organization.  One of our consultants, Terry Hamacher, estimated the amount of time different size nonprofit organizations spend on each function.  Generally, the need for operational assistance will go down as organizations get larger and the need for development will go up.

% Of Time Spent On Each Board Function

 

 

ESC of New England offers management consulting and capacity building services in a variety of areas including Governance, Marketing, Strategic Planning and more. Please contact Ulea Lago, Director of Consulting, at ulago@escne.org for more information. We offer a complimentary 2-hour assessment visit to all interested nonprofits in eastern Massachusetts and Rhode Island.

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