The 4 Functions of a Nonprofit Board

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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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5 Tips for Emergency Succession Planning

In nonprofit management, succession planning is an absolute necessity. Executive transition—no matter how long a leader holds his or her title—is inevitable over time. In her Succession Planning workshop, ESC Consultant Sue Ogle teaches that board members must be mindful of the possibility: What would happen if our Executive Director was not available to work starting tomorrow? Here are Sue’s top 5 tips for emergency Succession Planning.

1.) Ensure continuity of leadership
In the case of emergency succession, your nonprofit board must meet to confirm or decide upon an acting executive. While it is ideal to have an interim Executive Director lined up in the emergency plan itself, many organizations may not have the ability to make such a decision until a sudden departure occurs. In this case it is absolutely necessary for the board to meet and appoint a temporary leader as soon as possible.

2.) Establish a transition team
The transition team will serve as the body in charge of guiding and carrying out necessary changes in leadership. This group will clarify the roles and responsibilities of the acting executive as well as what board members will provide supervision or support of this individual.

3.) Communicate a short-term plan and timeline for permanent replacement
As the emergency turnover process continues, the transition team must clearly communicate a strategy to bring operations back to normalcy. If there is not someone on the board or closely involved with the organization who is fit or willing to take on this leadership role, an executive search must be employed.

4.) Review security issues and signatories
Any loose legal, financial, or human resources ends must be tied up and attended to at this time. This is one example of an area smaller nonprofits may not be able to effectively navigate alone—consider a Succession Planning consulting project if your organization may struggle in this area or any other step of the way.

5.)    Reach out to external stakeholders, funders, supporters and other important connected individuals or organizations
Finally, your nonprofit must update the key individuals and organizations on the executive transition. As with any major change, this time can be used to your advantage—all it takes is some creative thinking to produce a positive angle and get your organization back on its feet.

Taking all of these steps in a timely fashion ensures that a stressful situation that can put your nonprofit in jeopardy is handled in the most efficient and thorough way possible. If your organization is a candidate for Succession Planning consulting, or facilitation assistance in the execution of a preexisting succession plan, contact ESC Director of Consulting Ulea Lago at ulago@escne.org or 617-357-5550 to learn about our process including a two-hour complimentary assessment visit.