board of directors

Streamlining your nonprofit’s business: Some legal considerations for forming an executive committee

posted by
Scott DeWald,

Partner
Lewis and Roca LLP

“We have so many board members, we’re having trouble reaching decisions.”

The time it takes to reach consensus on a board of directors is often directly proportional to the size of the board. It’s simply more efficient to present, review, discuss and decide as a group when the number of members is manageable.

Ironically, a nonprofit that succeeds in recruiting a large number of board members with a passion for its mission can reach a point of diminishing returns, notwithstanding the valuable input each board member brings, because the time needed to give each member a say on every major decision lengthens (sometimes in an agonizing way) the time needed to reach those decisions. One way organizations can improve this process, without reducing the size of the board and the participation of its constituents, is by forming an executive committee.

An executive committee can be given the authority to act on behalf of the board only between meetings of the full board, or might be tasked with considering important matters prior to their presentation at the regular board meeting. Another option is to give the executive committee authority to act with the full power of the board in emergencies.

Bigger is always better…(Except when it’s not!)

posted by
John Scola, CFRE,
President
John Scola & Associates

Courtney, a new executive director of a relatively small nonprofit, was anxious to learn as much as possible in order to manage her work. She knew intuitively, as well as through her experience as a mid-level manager in a nonprofit setting that board management would be a key element to her success. So Courtney enrolled in a workshop entitled “Volunteer and Board Development” at the community college nearby, and networked ferociously with her fellow directors.

After the 180-minute workshop and networking, Courtney was completely confused about one seemingly-vital element. “What is the ideal size of my board?” she wondered. Her workshop instructor firmly declared that “best practices” dictated a board of 18-25. A number of her colleagues espoused a smaller board, “no more than twelve,” since “they were the only ones who did any work anyway.” Still others declared, “the sky is the limit as far as number of board members.”

Courtney was aware of many concerns associated with board management. She knew about creating board job descriptions, heard terms like “give, get, or get off,” and knew having an orientation for new board members would be a good idea. But the simple question of optimal size of the board eluded her. So, she decided to weigh the plusses and minuses of her options.

A small board, she determined, would be nimble, easier to recruit, and would take far less of her time. A small board would allow members to meet with less notice; there would be fewer busy schedules to try to coordinate, and the nastiness of bureaucracy would be easier to evade. Very appealing! However, Courtney knew a small board could lend itself to power plays and micromanagement. She knew she didn’t want that in her new position.

Recruiting New Board Members? Here’s how our geographically-focused nonprofit does it!

posted by
Jessie Singer,
Executive Director
Dysart Community Center

Being an Executive Director of a small organization, I often get asked how I recruit board members and where I find them. I think my tactics can be applicable for any geographically-based nonprofit, a start-up organization, or any smaller nonprofit seeking new members.

When I am seeking new board members I start with our own volunteer base. I sit down with the Board President and Volunteer Coordinator to identify those individuals who are going above and beyond their volunteer duties, are passionate about our mission, and have proven to the staff that they are committed to our organization. These are the individuals who often express their gratitude to the staff every time they stop in, they walk in with a huge smile on their face, act as a community advocate, and believe in our mission. These are the unsung heroes of the organization that deserve to have a larger role because they are exactly the type of board member that you want.

Ask A Nonprofit Specialist - Engaging the Board in Financial Reports

posted by

Anne Byrne,

Professional-in-Residence,

ASU Lodestar Center


Question:
This question was recently posed to the ASU Lodestar Center’s “Ask a Nonprofit Specialist”:

Every time the financial report is made at my organization’s Board meeting, the members seem to either fixate on a number that is not especially meaningful or the opposite:  their eyes glaze over in boredom.  How can I make the reports more meaningful?  One member suggested we use a dashboard to report our finances?  What do you suggest?

Engaging members of a nonprofit Board of Directors in the organization’s financial affairs can be challenging, given the diverse skills and expertise Board members bring to the work. This Board member’s experience is very common. It’s not easy to report on financial statements in an engaging fashion. However, since financial accountability is one of the most significant legal and ethical responsibilities for nonprofit Boards of Directors, effectively engaging the Board in financial matters is critical.  Consider the following background information to improve your organization’s financial reporting and the Board’s engagement in your organization’s financial affairs.

 

Research Friday: Financial literacy: understanding money for today’s activities and tomorrow’s security

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

You serve on a nonprofit board of directors. Or, you are a member of management for a nonprofit organization. You are expected to understand the organization's finances. And your role (board or staff) determines how you contribute to the overall security of the nonprofit with which you are affiliated.

When those who are responsible for an organization's overall fiscal management responded to a study by The Moody Foundation, it was found that nonprofits need to "fortify their financial skills to better forecast future needs, navigate economic instability, and manage risk."1 This study, Financial Literacy and Knowledge in the Nonprofit Sector (PDF), "engaged a random sample of primarily human service nonprofits, as well as health, civic, environmental, arts, and education nonprofits."2 Again, the study surveyed nonprofit financial managers such as CEOs and CFOs.

The report is divided into five areas of study: I) financial knowledge and literacy, II) indicators for programmatic and financial decision-making, III) the board role & governance, IV) controls and procedures for financial management, and, v) some closing thoughts.