Are new board members productive within the first two months of their term? Or does it take a year or more before your board members are "catching on"?

The board of a nonprofit is one of its primary assets. This is certainly true for smaller and start-up organizations without the resources to hire all of the staff needed. In these cases, the board often fills, not only the governing role, but also much-needed staff roles in areas such as bookkeeping, marketing and legal counsel. 

But the board is also a primary asset for larger organizations with a full complement of professional staff. The board in these mature organizations is essential to capital campaigns, mergers and acquisitions and other major strategic initiatives.

Clearly then, having new board members take a year or more to get up to speed is a huge waste of talent and resources. Not only is this bad for the nonprofit, it's also a drag for the volunteer board member.

So what's the answer to board members reaching their peak potential early in their terms? Onboarding.

The primary cause of board members taking a year or more before becoming productive is a lack of effective new member orientation. Too many nonprofits don't do board orientation at all. This is a shocking gap, causing new board members to muddle along, "figuring it out over time." The long-term result? All sorts of problems, including board apathy (nonattendance), micro-managing, and even negligence.

Of those nonprofits who do board orientation as standard operating procedure, much of what's being done isn't hitting the mark. A lot of what is called "board" orientation is actually focused more on what staff are doing and need to know. This is simply because staff members are designing and giving the orientation. The board's orientation should look substantially different from that of the staff because the job is not the same.

If these are issues for your board, consider the following:

1. Initiate a board-led orientation process for new board members. Having it board-led will help ensure that the material included is what a board member needs to know. Another plus is that current board members will feel more engaged and get to know new members from the outset. (If you need help, Chapter 3 of Nonprofit-KnowHow gives exactly what to cover.)

2. Create a board partner program that pairs a seasoned board member with a new one. This way, as the new member is getting up to speed, s/he has someone to turn for questions and support along the way. The experienced board member can also check-in to ensure that the new member is feeling good about their role and participation. (Chapter 3 also describes this process.)

3. Conduct an annual board self-evaluation to determine what more should be included in onboarding process, as well as other ways the NPO can optimize board effectiveness. (Chapter 1 of Nonprofit-KnowHow includes a comprehensive Board Self-Evaluation.)

The bottom line here is, for board members to add value they've got to understand the job and the nature of the organization they serve. And this understand must be from the board perspective. Lack of understanding is a big culprit in underperforming nonprofit boards. Therefore, energy spent on effective onboarding processes reaps huge dividends, including board productivity from day one.

How often do we hear the complaint, "my board doesn't do enough to help our nonprofit organization succeed"? Too often. Must we just live with this situation? After all, nonprofit boards are, by definition, made up of volunteers and we all know they can't be counted on, right? Wrong.

The biggest factor in low-functioning boards is that board members don't know what being a good board member means in the nonprofit. And sadly, nor do many executive directors (ED). Or if they do, they aren't skilled at conveying this to their boards. So, boards end up doing their best, usually a far cry from what is really needed.


But the board role is different from that of the staff. And this really must be clear to both the board and the staff to avoid problems (micro-managing and apathy chief among them) and to achieve the nonprofit's true potential.

A good general guideline for the essential difference between board work and that of the staff is "if it's a matter of what to do, that's the board's work; if it's a matter of how, then it's staff." But, of course, the devil is in the details: the actual figuring out what's a what and what's the how. This is why the most important role in the nonprofit organization is the ED, because its primary responsibility is to bridge between the board and the staff. To be effective, the ED must understand the difference between board and staff work in their particular nonprofit and act to make the delineation clear to all.

Consider these steps to get both the board and the staff working optimally:

1) The board's big job is to set the destination for the nonprofit organization - where is it headed, why and by when? These questions should be asked and answered about once a year (things change!) by the board collectively, in a facilitated process that also includes key staff members. But it's the board perspective that should prevail in this setting, meaning that the facilitator should guard against the tendency to make laundry lists of new program ideas. There's nothing wrong with this, but programs tend to be more about how and so should be considered in staff meetings/retreats.

2) The ED and the board chair should plan this session together with a seasoned facilitator so that the session is productive, engaging and results in simple, clear answers to these important questions.

3) Then the staff should be tasked with creating a work plan by which the organization will make progress toward its chosen destination. The board can review this plan and should officially approve it, along with the annual budget to make it happen. But the board's work is to ask is this plan likely to get us where we want to go and for a cost this organization can afford? If the answer is no, the board doesn't fix the plan, they send it back with comments to the staff for revision.

4) When the year's planning is complete and the implementation is set in motion, then what do board members do? 

Act as expert advisers on issues that arise and decision-makers on important policy decisions

Act as key resources and ambassadors for networking and fundraising

Monitor progress on both the work plan and budget, and offer counsel on course correction where needed

If all this sounds like an unrealistic ideal, it's definitely time to do some leadership development within the organization. It can be challenging for an ED to "train" their board - especially if the board has been functioning in the "old way" for a while. But transforming the board into a meaningful contributor, one that serves the nonprofit wherever it is in its life cycle, and one that fulfills its governing role is the responsibility of the ED (and of board leadership, when the understanding is there).

The best place to start is the ED's own understanding of the board/staff roles: are you clear about what this looks like in your nonprofit? Once the ED is clear, initiating a conversation and process with the board chair to facilitate the board's understanding and then working through board orientation, governance, and meeting processes/standards are excellent places to begin.

And remember, EDs that routinely complain that their boards aren't functioning optimally are essentially wearing a sign that reads "I don't know how to do my job." Boards do what they are cultivated, asked and supported to do. Getting this right is a big job for any ED, but it is indeed the job.

Nonprofit-KnowHow is designed to aid EDs and boards in the important work of redeeming their leadership roles. The two-volume set explains the fundamentals of board/staff roles, accountability, relations and  governance (and much more) - and provides a range of implementation tools, such as board and officer job descriptions, board orientation materials, and more. Many EDs use Nonprofit-KnowHow as the first step with new board members to help them get started on the right foot from the get-go!

A recent blog post on Software Advice's The Able Altruist reminded us how terribly important something incredibly basic is: knowing the impact of your efforts on your audience.

Nonprofits spend all kinds of time developing innovative programming and describing it to donors, but far too few spend the same kind of time checking with their constituents to see if the innovations are actually working.

As the Altruist says: "it’s estimated that fewer than 20 percent of organizations assess program effectiveness by soliciting feedback from the people they serve." Yikes! This is like planning a party, sending invitations, decorating, preparing food and drink, and even having the party, but not taking notice if people are having a good time.

"Evidence suggests that beneficiary engagement levels positively correlate with program quality: the more engaged the constituent, the greater the program," according to the Altruist. And great programs not only serve constituents, they also attract donors, media attention, community awards and other positive recognition of the nonprofit. This, in turn, feeds its ability to do more good. The relationship between customers, programs and resources comes as no surprise to most nonprofits. 

The rub is less that nonprofits don't recognize the importance of customer input. Rather, the problem lies in not knowing how to efficiently get it, nor what to do with it once they have it. These are really crucial issues.

First, how can nonprofits efficiently gather input and feedback from their beneficiaries and customers? This was much more of a problem before the advances and increased use of technology. But with the proliferation of mobile devices and internet use, easy-to-use and engaging survey tools are a dime a dozen. (SurveyMonkey and SurveyMethods are two.) Those nonprofits who value the ideas and experience of those they serve will find a wide range of cost efficient means to plumb the depths of their customers' experiences.

Second, what should a nonprofit do with the information once they have it? The simple answer is customer feedback and input should be a key influencer of strategic planning initiatives. In other words, when the board sits down to assess past performance and make plans for the future, they should use the experiences, ratings, and suggestions of the nonprofit's customers as the basis of their efforts. If the nonprofit doesn't know how to do this, it's time to get some outside help. There are plenty of good consultants who specialize in assessment and strategic planning.

The important point here is, what your customers think of you and your programs matters. So, not only should nonprofits invest in new programs, but also in the means to understand if programs are working for those they're designed to benefit. Sounds like common sense, right?

In a conversation the other day with a friend who is a major donor and volunteer working on a capital campaign, she asked me about the efficacy of email versus direct mail. As we talked about the pros and cons of each, I quickly noticed that we weren't really talking about these tactics - or, well, we were, but that wasn't the real issue. The real issue plaguing the progress of my friend's capital campaign was the lack of an overall strategy for the entire effort - the "campaign" part of the equation was missing.

The reason capital campaigns are so named is because raising some factor more than an organization's annual budget (which is generally part of what defines a capital campaign) takes time. Maintaining momentum, knowing where the organization stands as time marches on, and what to do differently in each stage of a campaign is what makes for success. And the key to an effective campaign is a plan.

Someone who has been through a campaign before, someone who knows how to perceive the "lay of land" (in this case, who are the prospects, what do they care about, how much can they give, what will motivate them to do so, etc.) and someone who can galvanize others (in other words, a leader) is needed to develop a plan that will carry the organization through from alpha to omega in the process. Needless to say, this plan must be strategic and visionary - in other words, it must consider the big picture and the long range. It also must be flexible, identifying key indicators that call for this option or that. It must also have milestones so everyone involved can see what progress is being made and that trigger certain activities from specified people.

In my friend's case, the lack of a campaign plan became clear to me because of several things she mentioned: 1) they were moving into "Phase 2" of the campaign, 2) they were beginning the public appeal process, from which they expected to raise $250-500k, and 3) they still needed to raise a third of the total. For starters, most campaigns have three or more fundraising phases, the last of which is the public appeal. This may seem counterintuitive: why wouldn't you want to let as many people know about the campaign as early as possible so you could raise money from as many people as you can? Well, the reason is that most campaigns raise the largest amount of funds from a few major donors. For example, my friend's $15M campaign has already raised $10M, and only about 20 people have committed funds so far. This is pretty typical.

Also, the "public appeal" raises the smallest dollar amount, but involves the largest number of people. Because of this, it signals the time to make a big public announcement of the campaign. And this takes place when the overall success of the campaign is assured. (No organization wants to face the reputation crusher of a campaign announced that doesn't reach its goal or fails altogether!) It is a very important phase, galvanizing the entire community around the cause, but it should not be announced prematurely - whether by email or snail mail or any other tactic.

Finally, when my friend told me her organization still needed to raise a third of their total (~$5 million), but that they were starting the public appeal from which they expected $250-500k, it was clear that the overall logic and sequencing of the campaign had not been worked out. When a campaign plan is weak or missing, a common result will be debates over the merits of tactics, instead of evaluating them based on a common understanding of the campaign's phases and overall momentum. These debates can degenerate into full-on conflict if the organization doesn't address the underlying issue - and fast.

There are plenty of fabulous new ways to raise money these days - and discussing the merits and options among them is a great idea. However, one thing hasn't changed and isn't likely to: raising big money is a big undertaking and requires big leadership with a big-thinking plan. That's why a capital campaign is still just that - a campaign.

People want to be inspired by a grand destination and clear about what they will do to get there, just as they want a say in both.

By Rebecca Reynolds

Vision - Mission. These two little words could hardly be more misunderstood. It's odd. And worse, it's debilitating for the organizations suffering under the misunderstanding. Here are some of the common misapprehensions:

1) "Vision and Mission generally mean the same thing." Nope. I frequently hear people refer to their "vision/mission" or sometimes their "mission/vision." While it's true that an organization's vision statement and mission statement rely on each other so fundamentally that the organization should have both and should use them together, the two statements are quite different. We'll get to how below.

2) "We only have a mission statement." Not good. This implies that the vision statement isn't really important, but to me signals that the organization simply doesn't know what a vision statement is (and why it's important) so, of course, they don't have one.

3) "Vision - mission, whatever." Yikes. This world-weary attitude signals that the organization has given up entirely on expressing the two most fundamental aspects of itself - and usually this is for one of two reasons: either the organization is too busy (read, too in the weeds) to make time for them or because it has no idea how to express them in a meaningful way. Past attempts have likely resulted in something more like slogans, which haven't had the gravitas to last - so they gave up all together.

All of the above result in an incredible amount of busy-ness - lots of running around doing, or maybe just lots of running around, but without meaningful result. How can two little words - vision and mission - amount to the difference between effective and not in an organization? How can that be possible?

It is possible. Eminently so. Here's why.

All organizations (dare I say, all groups of people) operate best when everyone involved understands the answers to the two fundamental questions the vision and mission statements answer:

1) Why does the organization exist, for what desired future condition?
2) What is the specific and perhaps unique way the organization has chosen to work toward this future? Or more simply, what does the organization do and for whom?

Without clear answers to these essential questions, the people in the organization may work hard, but without the larger context that gives meaning to that work. This is like saying "let's get ready for a trip," without specifying where we're going. And obviously, saying "we're going to be the best prepared travelers in the world" doesn't help much. The question still is "where are we going?"

In many organizations, the vision statement describes what the organization will look like at some future point. Being "the greatest coffee company in the world" may inspire the owners or shareholders of said coffee company and may be an important thing to make clear to employees, but a real vision statement speaks to what the world will look like in the future as a result of the organization's work. This is what attracts people to an organization - especially nonprofit organizations.

The vision statement describes the desired future that inspires its work, which hopefully is more than simply being the best at what it does. The vision statement speaks to our hearts and to our imaginations. And a good one is so easy to recognize that it can never be forgotten. That's a vision statement doing its job.

The mission statement, on the other hand, grounds us. It speaks to the head. When we first learn of an organization (just like when we meet a person), we want to know what does it do? What's its job? No fluff, no hyperbole, just get to the point.

What. Why. - Head. Heart.

This is so simple, many organizations seem to have forgotten how important it is to answer these questions. And not just in a small room with a few leaders. Although even that's better than nothing. In fact, this is how these questions have been answered for eons. Someone got the inspiration for a grand destination and chose a course of action to get there. Everyone else follows the appointed leader. But since we are changing to a society that more and more wants to be involved in choosing our destinies and what we do to reach them, it's increasingly important to answer these fundamental questions in an open forum with as many people as will be affected.

Ironically, the nonprofit organization is a model for this since it has needed to operate this way forever. The reason being simply that its livelihood depends on people choosing to support it and become involved rather than simply be paid to do a job. This paradigm is the way all business will be done, since it's no longer good enough, for most of us, to be told what to do. People want to be inspired by a grand destination and clear about what they will do to get there, just as they want a say in both. This is collective leadership in action.

In the end, it's not about being able to define vision and mission. What is important is being able to clearly express the answers to the questions they represent. In this way, everyone that comes into contact with the organization can easily understand its importance in the world - which enables them to choose to be a part of it or not. And for those leading their organizations, opening the process of answering these questions to those who will be affected means a more robust, aligned and synergistic organization. What could be better than that?

Guest Blog Post

By Trish Thomas

Inspiring action, igniting change, networking and giving back to the community… these are common incentives driving individuals to serve on non-profit boards. 
 
As a participant on many non-profit boards and advisory boards, I consider my service to be a much more powerful asset than my money.  But before you step out to join a board or recruit new members for an existing board, it is critical that you understand your obligations and the key factors that foster highly-successful boards.

Because non-profit board members are not compensated and profits aren’t the primary goal, it’s easy to believe that board
service is a pleasant endeavor that will let you contribute to your passion and make new friends.  But board seats are a deep responsibility and a job that requires serious care and attention. 

Beyond the general duties of care and loyalty, the immense possibilities of a non-profit board are unleashed by assembling the
right mix of members and ensuring that they work together in the boardroom. Here are some organizational and personal characteristics to consider as you build a board or select a board to join:

Choose people who understand and advocate for the mission.  One of the key tasks of boards is to build community awareness and raise the stature of the organization.  Directors are not equipped to do this if they don’t align with the cause at a deep, personal level.

Don’t overload the board.  Determine a manageable number of individuals that will be active and contribute in tangible ways.  Not every large donor should be given a seat on the board.  Advisory boards or founders committees can be a great way to honor and leverage friends of the organization without wasting board seats.  I find that boards of ten or less can overwhelm members with work, but huge boards make it hard to hold fair and complete discussions in meetings.  Find the right size for maximum effectiveness and fill seats wisely.

Be sure the board has the right goal in mind. Some boards need to be "working" boards with all members volunteering significant time.  Some boards need to raise funds through sponsored events and capital campaigns, so they need directors with fat checkbooks.  And some boards may be focused on capacity building or improving governance.  The focus of each board should be driven by the organization’s needs.

Every solid board needs to have financial acumen built in.  There should be financially astute members who are knowledgeable and willing to serve on finance and audit committees.  But beyond that, every single director should understand how to read financial statements, ask hard questions, and be fully engaged in financial and strategic planning.

Find board members who are eager to participate within the organization. Money is great, and every board member should give annually, but it is more important that energy, connections and expertise are on the table.  Willingness to take the time and effort to understand strategic, financial and operational issues, engage personally with the staff and activities, and stay current on sound governance principles are all ingredients for success.

Build diversity into the board.  A wide range of individuals of varying genders, ancestry, incomes, ages and levels of connection to the organization are crucial. Blending experienced directors with new additions to the boardroom helps  mix best practices with enthusiasm.  It is also helpful to have some people in the room who are neither large donors nor recipients of services because they bring external perspective.  In my service as the chair of The Women’s Wilderness Institute board, one of our primary champions on the board is male.  Gary is deeply committed to the cause and his unique ideas and skills are pivotal to the board performing well.  A board with all female directors would not serve the organization as well as a gender-balanced board.

Understand each board member’s drivers and ensure that they are coming to the board for the right reasons. If everyone’s
objectives are clear from day one, the board will have a stronger and more effective dynamic than if directors’ interests are at odds and taint the board.  For example, if a member is on the staff of another non-profit and hopes to see the two organizations
partner, that is fine. But the entire board needs to be aware of their intention up front to preserve transparency and goodwill.

Collegiality matters!  I’ve seen stellar people break down boards because they can’t work and play with others.  The ability to
collaborate well and show respect for the ideas and views of fellow board members and staff should be a highly prized trait on a board; as well as the understanding that boards operate as a body not as individuals. 
  
At a non-profit there is so much at stake!  For starters, the very cause of the organization is on the line, as is its survival.  That
is actually a higher ethical directive than just ensuring that a corporation’s bottom-line is trending up.  A non-profit board not only provides governance and safeguards the organization’s mission, the board also takes responsibility for capacity building, sustainability and fundraising.  
 
By treating board service as the valuable and serious commitment that it is, you can unlock the possibilities of the boardroom
and gather people in effort and equality to accomplish great things - ultimately making a powerful positive impact on your community and the world. 

Trish Thomas, owner of Trish Thomas Consulting, LLC, holds a BS in Computer Information Systems and a MBA in Management & Strategy. An expert in fast track business growth, she has over 18 years of business management experience spanning a wide range of industries, as well as 11 years in ownership of private firms.

Trish currently serves on boards for the Better Business Bureau, the Deming Center for Entrepreneurship at CU Boulder, the University of Denver Women's College, The Womens Wilderness Institute, The Family Garden and The Other Side of Everest Educational Foundation.  She is a thought leader who delights in sharing knowledge, connections and inspiration, as well as acting as an innovator, optimist and protagonist who empowers people to change the world.

By Rebecca Reynolds

"Nonprofits aren't sustainable." How many times have I heard that? Too many. The idea that nonprofits aren't sustainable, that they are too dependent on gifts and grants, that they can only truly succeed with some sort of earned income stream reveals a fundamental lack of understanding about the nonprofit business model. Let's take a look.

First off, the idea that only earned income (the exchange of goods or services for money) is sustainable is ridiculous. How many for profit businesses have gone out of business because their source of earned income was no longer viable? Plenty. Earned income falls prey to the same ups and downs of the market that contributed income does. So, it's more apt to say that what is sustainable is having a broad enough income stream (funds coming in from a variety of sources) to ride the vicissitudes of the economy. Just as a financial advisor advises for a retirement portfolio, this is common sense.

Second, contributed income (grants and gifts) being unsustainable long-term is also ridiculous. United Way, Planned Parenthood, and the Boys and Girls Clubs of America - to name a mere few - have been in the nonprofit business with substantial funds coming from donations for more than 100 years each. That sounds pretty darned sustainable to me.

"Over dependence on gifts and grants" is like saying that Coca-Cola has an over dependence on its customers' willingness or ability to buy their product. Ridiculous. In fact, people have always been interested in contributing to good works, especially when there is the added incentive of a tax write-off for doing so. This doesn't mean these gifts can be taken for granted, any more than Coke can keep selling the same old way without regard to changing demographics, social trends and other market drivers. Nonprofits need to innovate just as continually and effectively as Nike or Coke (and rely on those specialists with the expertise to do so - more on this below).

Now let's look at where these fallacious ideas come from. I usually hear the nonprofit sustainability criticism coming from people in the for profit sector (often people with MBAs!) The idea of contributed income - money given without material gain - is foreign there (and I daresay, anathema). So, too many nonprofits are misdirected by board members coming from for profits who, not understanding the asset of the 501(c)3 or the profession of fundraising, push earned income methods such as golf tournaments, galas, and now online programs - all to avoid "dependence" on gifts. This misses the entire point of the nonprofit sector business model!

There's nothing at all wrong with golf tournaments or galas - many nonprofits make good money and many new friends with these types of revenue generators. But there also is nothing wrong with writing grant proposals to foundations that are in the business of granting money each year (5% of their funds, by law) or cultivating relationships with major donors who are looking for ways to put their money to good use. Nor is there anything wrong with applying for government grants that are specifically designed to encourage innovation and good works beyond the reach and ability of government.

In fact, the nonprofit sector is set up to benefit from the fact that it does good and important work for our society that is, for the most part, not commercially viable (if it was, there'd be a for profit taking it on, you can be sure!) In exchange for this good work, the American people 1) don't require income tax be paid on any profits generated (and yes, nonprofits CAN make a profit - it just can't be distributed to owners or shareholders) and 2) allow those who financially support these good works through organizations with 501(c)3 status to deduct the amount on their tax returns. In this way, nonprofits have an income stream wholly unique to them, with people expert in capitalizing on it.

And that's my next point. The only time there's anything wrong with gifts and grants is when the people trying to bring funds in from those sources don't have the know-how to do so. Trust me - I've seen it. It's like a group of earnest folks deciding to perform an appendectomy on someone in need - the gesture may be well-intentioned, but most of us would prefer a surgeon. It's no wonder board members get fed up with "fundraising" and want to do something they understand: sell something!

But this is simply cutting off the nonprofit's nose to spite its face. The fundraising profession has gotten better and better as the demand for good work increases (nonprofits account for more start-ups than for profits) and the pace of change drives the need for innovation. Nonprofits can't rest on their laurels and rely on the same foundations, major gifts and government grants year after year. Times change and so must fundraising strategy. In this environment, the value of expert fundraising professionals is significant, and savvy nonprofit boards will view them as just as critical to business success as their mission professionals. 

So, if we agree that sustainability comes from a diverse revenue stream, then nonprofits having contributed as well as earned income makes good business sense. In fact, it makes them incredibly sustainable, which is why the business model still works.

By Rebecca Reynolds

The idea of term limits for executive staff leaders in nonprofit organizations came up in a LinkedIn group. It's a provocative concept, one that incited a range of comments and got me to thinking.

For the most part, nonprofits take for granted that board governance should specify term limits for its member and officers. There's more than ample evidence that organizations without board term limits eventually experience problems: stagnating board involvement, decreasing vitality and innovation, and, in some cases, a leadership strangle-hold by a few individuals.

But should terms apply to executive staff positions as well? The idea was considered radical and to some, threatening, and I can understand why. One person explained that in smaller communities where the pool of qualified candidates is small, it would be onerous and even risky to the nonprofit's health and stability to observe staff terms. Another suggested that he saw no reason for terms if the executive was still performing well. Others felt it was in some way insulting to a professional to assume prescribe his/her tenure.

As I considered the proposition, I realized that a leadership staff lifecycle occurs organically in all organizations. In other words, all nonprofits at some point outgrow their leadership staff and need to address this eventuality. Some address it more directly and strategically, others - tragically - only when the situation has become dire. In fact, consultants are often called in to help in just these situations.

Organizations that are attune to the signs of staff leadership "terms" expiring, consider and plan for leadership succession as part of their strategic planning and executive leadership evaluation processes. Those organizations that are not explicitly attune, will instead be faced with the symptoms of leadership that is "beyond its expiration date," such as declining mission relevance, morale issues, financial problems, etc. The more aware organizations are that all things have a lifecycle - boards, staff, the nonprofit organization as a whole - the better they can prepare for change.

For example, the most challenging leadership transition in any organization is from the founder to the organization's first executive leader after the founder. This transition comes for all organizaitons, and yet, too often, it's left unspoken until things turn for the worse. This is because few organizations are able to overcome the emotionality surrounding the transition, least of all the founders themselves. And yet, this transition is a critical one for organizations to foresee and prepare for well in advance. Just having the conversation makes a huge difference.

But, while I find the concept of leadership staff terms useful, I think that may be too prescriptive a solution given the huge range of circumstances in nonprofit organizations. One organization's appropriate executive leadership tenure will be another's stagnating yoke and yet another's "blink and you missed it" time period. For example, a mature and stable organization will likely be benefitted by longer terms for their executives than younger organizations that are growing and changing rapidly.  The bell weather then for when leadership should turn over has everything to do wtih what the nonprofit currently requires - and less to do with an arbitrary number of years. 

So, instead of prescriptive term limits for executives, I endorse that nonprofit organizations build into their planning and evaluation processes explicit conversations about this issue - and this should apply to all major executive staff, from executive director to development director, adminstrators, CFOs and program directors. Evaluation processes for these positions should be developed with criteria defined to drive optimal performance by the nonprofit - this too will change over time, and so must the evaluation process and criteria for each executive position. Bringing aboard all executive staff with full awareness of the nonprofit's values and process around leadership succession will make clear that leadership lifecycle is a reality, not personal to them, and the nonprofit is proactive in defining how it will address such predictable aspects of its business.

The biggest problem in the area of leadership succession is that too many nonprofits just plain get comfortable when things are working well - the "don't rock the boat" mentality kicks in. Perhaps setting term limits would help ensure this doesn't happen. But even better is remembering that the only constant is change and having as the nonprofit's standard procedure being prepared for those changes that are predictable. Executive staff turnover is one. Not only does it make sense to plan for it, it's one of the smartest ways for the nonprofit to avoid highly charged, disruptive, and, at worst, litigious situations.

By Rebecca Reynolds

Last week, someone emailed me this question: Is it okay if an active board member decides to sell their services in the not for profit? Would it be a conflict of interest?*

This is a really good question. Conflict of interest is an incredibly important area in nonprofit organizations precisely because their board members by law may not profit from serving on the board. This is a key distinction from for profit boards. For this reason, the nonprofit board should discuss the issue of conflict of interest (doing its homework and including an attorney experienced in such matters) and set good, solid policy that will guide them in situations that could have conflict-of-interest potential.

And, needless to say, the board doing this proactively (that is, before potential conflict of interest situations occur), is ideal.

Unfortunately, too many boards don't even think about developing this kind of policy until they are smack in the middle of a situation that calls the question. Clearly, this makes it much more challenging for the board to develop objective and broadly applicable policy, since they are focused on whatever the specific situation is. And without existing policy, it can appear that the board is singling out a particular board member, which can become a situation fraught with conflict! Monitoring conflict of interest issues should not be considered personal - it is simply part of the board's job of safeguarding the legal standing - and just as importantly, the reputation - of the nonprofit organization. Having existing policy takes the personal aspect out of the equation, thereby reducing the possibility of the situation becoming contentious.

Generally speaking, it is NOT a problem for nonprofits to purchase services from board members – however, this is terrain that should be carefully and intentionally managed by the board as a whole so that conflict of interest situations do not develop, and what's more, so they are not perceived by others. The nonprofit's image and credibility in the community are paramount here. 

Some questions to be aware of when considering purchasing services from a board member:

Has the board considered other similar vendors and in so doing made a conscientious choice based on established criteria that reflect the best interests of the nonprofit?
Has this selection process, and the selection criteria, been well conceived, documented and made available to the public?
If selected, is the board member offering some added benefit to the nonprofit such as an extraordinary discount?  
What is the term (length of time) that services will be purchased? If long term (for example, an architect on building a new facility taking place over several years), it may be wise for the board member to take a hiatus from the board until the vendor relationship is concluded.
In any case, the board member in a vendor relationship with the nonprofit should recuse him/herself from any decision-making that pertains to the contract, so that s/he is not seen to be wielding undue influence.

The most important thing for the nonprofit board is to discuss and develop good policy on this in advance of any specific situation. While it is infrequent that conflict of interest issues arise, and even less often that they become real legal issues, the mere appearance of one can be damaging to the nonprofit's reputation in the community, not to mention the negative impact of a conflict between board members. As we all know, reputation is the foundation of fundraising and overall institutional support - so, in the case of conflict of interest, "better safe than sorry" most definitely applies!

For more information on this and other nonprofit board responsibilities, see Chapter 1, The Nonprofit Board of Directors, in Nonprofit-KnowHow.

*Hearty thanks to Aiesha Teague, accountant to a nonprofit, for asking this great question and prompting this post. Readers: Feel free to send your questions to us, and we'll answer them here!

By Rebecca Reynolds

The nonprofit organization develops and safeguards certain documents to ensure that it operates within the legal parameters as provided by the state and also by its primary governing body, the board of directors. Some of the most important of these documents include:

Articles of Incorporation are filed with the Secretary of State; they spell out the conditions under which the organization was incorporated, and include the statement of purpose (mission).

Bylaws are the set of rules particular to the organization that describe how the board will operate and carry out its business. The bylaws express requirements for official meetings, describe the duties of officers, how board members and officers will be selected and for what terms they will serve, what number makes a quorum and so on. The board’s adherence to its bylaws is a fundamental of good governance.

Policies serve as guidelines set by the board for how the organization as a whole will view and handle a variety of situations. Policies deal with the general rather than the specific and should be readily accessible to the board and staff. A board policy book is advised to avoid searching for policies through board meeting minutes.

Board Meeting Agendas preview for the board the priority issues that will be dealt with at the board meeting. The agenda is generally developed by the president in tandem with the executive director, with input from other board and staff members as needed. It is also the outline for the minutes prepared from the meeting.

Board Meeting Minutes are the legal record of the corporation’s official business conducted at board meetings, taken on behalf of the board by the board secretary. These serve as the institutional memory of the organization and should be carefully crafted and archived by the nonprofit.

Developing and storing the above documents can appear to be a perfunctory administrative duty, and is often left to office personnel to handle. This is a mis-step. These documents represent leadership's fundamental agreements as to the purpose, functioning and decisions of the organization. They are the bedrock of the organization's governance. Maintaining their currency and operating within their parameters are what protect the nonprofit and its leadership in times of crisis and guide their actions under normal conditions. The board is responsible for both and should be deliberate in its delegation of anything to do with either. 

For more on the nonprofit's most important documents, get Nonprofit-KnowHow: The Workbook.