Building Effective, Healthy Nonprofit Boards

Are you wanting to elevate your nonprofit to new heights? Have you had the same board members for years? Do personal agendas overshadow the organization’s mission? It may be time to take a look at the composition of your board to make sure you follow the guiding principles and best practices.

According to the Standards for Excellence Institute, a project of Maryland Nonprofits, charitable organization’s board members are in a position of trust to ensure that resources are used to carry out the mission of the organization. The relationship between the board and management is crucial to its success. The employees and volunteers of any nonprofit are fundamental to its ability to function with healthy, effective operations.

An organization’s board leadership should consist of volunteers who are committed to the mission and who demonstrate an understanding of the community served. The Institute states that an effective nonprofit board should:

  • determine the mission of the organization,
  • establish management policies and procedures,
  • assure that adequate human and financial resources are available,
  • and actively monitor the organization’s allocation of resources to effectively and efficiently fulfill its mission.

Management must provide information in the form of assessments, reports and data to the board so effective decisions can be made. Organizations should also have clear board roles, responsibilities and tenure requirements in its bylaws. The board should periodically review the bylaws and policies to ensure the effective governance and management of the organization.

The Institute also states that board effectiveness is based on:

  • The board is responsible for its own operations, including periodic (i.e., at least once every two years) evaluation of its own performance.
  • The board should have stated performance expectations and hold board members accountable for attendance at meetings, participation in fundraising activities, committee service, and involvement in program activities.
  • The board should establish a rigorous board development strategy for recruiting and selecting new members and ensuring that the board has an appropriate mix of talent, connections to the community, and diversity.
  • Board policies should include limits on the number of consecutive terms a board member may serve.
  • The board is responsible for the orientation, education, and (where appropriate) the removal of board members. New board members should receive an introduction to how to serve on the board.

Establishing and maintaining a strong board is more than just assembling a group of dedicated individuals; it’s about creating a diverse, dynamic and effective leadership team, free from egos, politics and burnout.

The best way to harness diversity in board composition is to ensure your board is a mix of skills, backgrounds, and experiences. A well-rounded board is a catalyst for innovation, enabling the organization to approach complex challenges with a variety of perspectives. According to Board Source, almost half of executives report they do not have the right board members to establish trust with the community they serve. That’s a harsh reality for the social sector—a sector that is entrusted by those it serves and those who give their time, talent and treasures to address social issues.

If this is the case for your nonprofit, reach out today for Cloud 9 to do a board assessment.

Effective board management also involves striking the right balance in size and tenure. Typically, 7 to 15 members ensure a blend of diverse viewpoints and manageable, efficient decision-making. Additionally, the rotation of board members is a key factor in maintaining organizational agility. A typical term of 2-3 years keeps the board fresh and responsive to evolving challenges. Regular rotation not only brings in new ideas but also prevents the entrenchment of politics within the board, ensuring decisions are made in the best interest of the organization, not individual agendas. A board free from personal agendas enables more efficient and mission-focused governance.

As a nonprofit grows, evolving from a volunteer board to a structure that includes paid professionals is often necessary. This transition addresses the increased complexity of a scaling organization and helps prevent volunteer burnout. The composition and governance of a nonprofit board are not mere administrative details; they are integral to the success and long-term sustainability of the organization. A well-structured board, characterized by diverse perspectives, free from personal politics, and supportive of professional management, significantly enhances a nonprofit’s effectiveness. As organizations evolve, transitioning from a primarily volunteer board to a more professional framework becomes essential in managing the complexities of growth.

The strength of a nonprofit lies in the effectiveness of its board. The right board composition and governance strategies are foundational to achieving your organization’s mission and vision. Are you ready to transform your board for the greater good of your organization?

Here are a few resources that we recommend. Want to discuss in more detail? Our team of advisors is here to help nonprofits transcend the challenges they face. Reach out today.