By Rebecca Reynolds
Someone the other day told me, "I've served on advisory and regular boards, and I'm familiar with both." But as she continued, I realized the difference between the two were muddled in her mind. It occurred to me that this might be a common predicament since, well, a board is a board is a board, or so it may seem...
In fact, there are different types of boards, with different functions and compositions. And advisory boards are a particularly useful entity in the nonprofit world, with a role quite distinct from the governing (a.k.a. "regular") board. To get full benefit from an advisory board, it's important to first be clear about what an advisory board is and what it does.
An advisory board's role is, as its name implies, to advise. But advisory boards also bring something else to the nonprofit: credibility. A good advisory board is made up of people who are well known and/or experts in some aspect of the nonprofit's work. So, not only are they able to offer great advice, resources and connections, they also make the nonprofit look good - demonstrating that the organization is savvy and connected itself.
The other thing to keep in mind is that the advisory board is a different entity from the governing board, with the key distinction being that the advisory board advises and the governing board decides. So, the advisory board is optional in a nonprofit organization, whereas the governing board is not. That means the nonprofit must ask itself the following more challenging questions:
1) Should our nonprofit have one?
2) If so, what is its specific role (what do we need it to advise on?), and how should it be set up?
3) How should it operate and with what expectations?
4) And, conversely, what should advisory board members expect from the nonprofit, in exchange?
5) Finally, who should be on it and for how long?
These are important questions the nonprofit will want to answer before it begins to populate the advisory board. We’ll address these questions in two parts since there's a bit more detail than will fit into a single post.
First, should your nonprofit have an advisory board? In theory, there isn't a nonprofit that would not benefit from an advisory board. All organizations need good advice and a great cadre of people from whom to get it when needed. That said, given the role of the advisory board (advice and credibility), it's usually made up of people who are well-known in their fields, who are busy, and who are willing to lend their names to the nonprofit (remember to include them on your letterhead and website!) as part of its credibility. This means that the organization will need to have contacts with this type of individual in order for the advisory board to serve its purpose.
Also, since these individuals are generally prominent in their fields, they'll expect that the nonprofit can interact with them in a way appropriate to their positions. This doesn't mean that all advisory board members are CEOs of major corporations or senators, but it does mean that to be on an advisory board the individual should have the credentials. Therefore, the small nonprofit or start up may not yet have a mature enough operation to structure and populate and interact with a board of advisors in addition to a board of directors to govern the organization.
It should go without saying that the governing board is the nonprofit’s first priority. If there's any doubt about the nonprofit's ability to develop a great governing board, it certainly is not time for an advisory board.
Second, if the nonprofit does feel stable enough to develop an advisory board, the next issue to address is its specific role and function in the particular nonprofit, including what exactly the nonprofit needs expertise and advice on, if and when the advisory board meets, if there is a financial commitment involved, how many members it should have and so on. These questions are similar to those the nonprofit addressed when developing its bylaws in relation to the governing board. Although it’s not normally necessary for a nonprofit's bylaws to cover the advisory board (but do check with your attorney to make sure this is the case in your state), it’s still a good idea to officially charter the group.
The charter is the document that outlines roles, responsibilities and expectations. Don't let the idea of a "charter"overwhelm you: it's basically a job description for a group. There are plenty of samples to be found on the internet, but your organization can always create a simple charter based on your job description format. When developing the charter, describe the role of the advisory board (to advise on matters such as...), its function (why it's needed, what benefits will derive from it for the nonprofit), and what are the expectations of it. A good charter will draw the bright line between advisory and governing board role, requirements and activities - an extremely important document not only for the nonprofit, but for potential board members of either body!
As for expectations, a key issue to define is if the advisory board will meet. Depending on the type of people on the advisory board and where they’re located, meetings may not be indicated. For example, a symphony that has international musicians and conductors on its advisory board is unlikely to require meetings. However, if your nonprofit is starting out and has local bank presidents, government representatives and CEOs from peer organizations on its advisory board, then a meeting or two per year may be useful and even welcomed by the members. But remember, the primary function of an advisory board is to advise – this can be done with a simple phone call now and then.
Next time, we'll cover other expectations of advisory boards, such as if they should make financial contributions to the nonprofit. We'll also discuss how many members there should be, what members should expect from the nonprofit and more...stay tuned!