NONPROFIT GOVERNANCE

GOVERNINGby: Robin L. Cabral, MA, CFRE

Principal of Development Consulting Solutions

01// BOARD RECRUITMENTNonprofit board development is THAT important.

Not just to the organization as a whole, but how it directly impacts fundraisng effectiveness.

02// BOARD SELF ASSESSMENTSelf-evaluation is an excellent way to maintain board awareness around its

responsibilities and the potential need for changes on the board level.

03// BOARD EXPECTATIONSBoard members need position descriptions for governance

at the board level.

04// BOARD COMMITTEESJust like with board directors, board committees need position

descriptions and expectations.

05// THE CAPITAL CAMPAIGNWhat’s a board to do? In a capital campaign, board members should

make the organization a priority.

06// THE BOARD’S JOBAn inside look into the board’s roles, qualifications, functions,

and scope of authority.

INSIDE LOOK...

MEETTHE AUTHOR

Robin L. Cabral, MA, CFRE and Principal of Development Consulting Solutions, is the one and only outsourced development professional with close to twenty-five years’ experience providing value-added interim development staffing and consulting services with razor-sharp monthly result objectives and benchmarked deliverables.

With her over twenty years’ experience, she has raised millions of dollars for small to mid-sized organizations.

Her hands-on results driven approach to raising money comes directly from both her experience assisting worldwide, national and local organizations and her cutting-edge Masters of Arts degree in Philanthropy and Fund Development from Saint Mary’s of Minnesota.

Robin is also an AFP International Master Faculty Trainer and presents nationally and online.

She works with small to mid-sized nonprofits that want to position themselves to build capacity and generate MORE fundraising prospects, BETTER donor relationships, and BIGGER fundraising dollars.

She is the leader in specializing in providing outsourced Nonprofit Fundraising Development Services, interim development services and coaching and assisting smaller organizations in their first campaigns; annual, capital, and endowment.

INTRODUCTION

As a Board of Directors, this group is legally and morally responsible for the health and effectiveness of the Organization. Governance is the process by which the Board operating as a group ensures this.

Many Board of Directors still operate at the management “Day to Day” operational level not realizing that, in fact, they have a far more significant and greater responsibility to stewarding the health of the organization.

As such, this resource provides a concrete roadmap on how to move an organization from management to governance and as a result strengthening the organization and ensuring its future stability in the process.

BOARD RECRUITMENT and your fundraising effectiveness

Nonprofit board development is THAT important. Not just to the organization as a whole, but how it directly impacts fundraising effectiveness.

A board dream team does not just appear. It needs to be systematically developed. It all starts with an inventory through the creation of a recruitment matrix.

The recruitment matrix is a tool that you use to inventory the composition of the existing board of directors. Once you do this inventory, you will have a good sense of the “gaps” in terms of skills, diversity and expertise. Diversity refers to more than just ethnicity. It also includes things such as gender, age, geography, profession, expertise, connections and other affiliations. You should also be tracking term expiration dates to see which board members will soon be rotating off.

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BOARD RECRUITMENT and your fundraising effectivenesscontinued...

The nominating committee will then present their findings to the board which are then used as a guide during recruitment. This process will provide you with the basis for recruitment of which you should have both short-and long- term goals and objectives. Be sure that you have a recruitment process outlined so that board members are not brought on haphazardly without any process for nominating and screening.

Why would you treat board membership differently than any other job in the organization? It is THE most important job in any nonprofit. Therefore, you must have a formal screening process in place as if this were an interview. Which it is! It is a great time to determine not only do they have the skill sets, but the passion and interest in your organization’s mission. It is also an opportunity to present board member expectations and allows the candidate to interview the organization.

Board recruitment is a process that should not be taken lightly. It all starts with composition. So, it’s important to get the right people on board from the start.

BOARD SELF ASSESSMENTcriticaltoboardeffectiveness

Self-evaluation is an excellent way to maintain board awareness around its responsibilities as a board and the potential need for changes on the board level. It is a great way to check in with each member and to learn about their experiences on the board.

A self-assessment tool can be easily administered during the year. In fact, you should be sitting down with your board members at least once per year to meet with each individual board member, CEO, and board chair. This is the time when you should conduct this self-assessment and discussion. If you are not meeting each year, start. It is that simple. It is that important. A committee of trustees should review these self-assessment results and use them as the basis for planning a retreat or a planning session. Perhaps this is a function of the board governance committee or your board development committee. Perhaps you don’t have a committee like that. Create one.

It is important that once you do set expectations for your board that you do something about it – assess them towards progress made. Are they meeting expectations? Do you they feel that the board is highly functioning? Does the board have the structures in place to do its work? Troubleshooting both the board as a collective and individual board members is critical.

You can then use this information to build a better, stronger board. You can use this information to “thank and release” other board members for not meeting expectations. You can use this information to address strategic issues both internally and externally.

I once heard it said, “capable board members are not born they are made.” It is important that we make the board the best functioning that it can be through looking at what they are and what they can be. Self-assessment of the board is one of the first natural places to start.

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BOARD EXPECTATIONSsettingyourboardupforsuccess

Board members need position descriptions for governance at the board level. I find that many groups have some form of a board member expectation outline, simple as they may be, but lack a basic board of directors position description.

How can that be? I am not sure. I think that sometimes, perhaps groups don’t understand the full role of the board and therefore don’t design a position description outlining the roles and responsibilities of a board. On the other hand, some boards by design, especially smaller nonprofit organizations, create board positions to assist in getting the day-to-day organizational work complete, and the board mainly functions as management/volunteer rather than as a governance focused board.

Just like in the “real” world, we wouldn’t expect to hire someone or to take a job that does not have a position description. The case is the same here. Why would we expect a board member to come on board without outlining for them their duties and responsibilities and sharing that with them? The board holds one of the largest, if not THE most important role within an organization. In fact, the “buck” stops with the board. How do you assess and release board members if they or you haven’t defined that role for them?

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And, we wonder why boards are not functioning the way we want or expect them to. We haven’t begun to identify the parameters of what that work entails. We expect board members to come on board fully engaged and knowing of their responsibilities, and when they don’t, we get frustrated and upset with our board’s performance.

So, after seeking consensus and commitment, an organization must move to defining what a board member’s role is and formalize and adopt this position description outlining functions and responsibilities. From there, you can design, based on the culture and needs of your organization, individual board member expectations regarding their participation in a wide variety of organizational matters including, most importantly, fund development.

We all know that there is a difference between a board of directors as a collective unit and an individual board member, right?

BOARD EXPECTATIONSsettingyourboardupforsuccesscont...

Just like with board of directors, board committes need position descriptions and expectations. Now, I won’t recommend specific committees because each organization is different, but the basics such as finance and governance committees are essential.

Why a position description for the committee? Well, far too often, I have seen committees want to take over management types of activites. You know, they think governance is at the Board collective level, and therefore, they can focus on getting things done. Yes, to some extent, but with specific parameters in place. A committee also needs to be engaging in governance regarding examining trends and strategic direction of the organization.

Again, governance discussions come first. Operational issues can be done by a task force or other such components. The finance committee in a large or small organization needs to look at economic trends in the overall community both locally and globally and make sound fiscal decisions. That does not mean that they get into the minutia. Yes, board members do need to do management kinds of things in small non-profits, but they can also engage their membership or volunteers to assist in getting things done.

So, again, clear, written, articulated in advance, position descriptions for the board as a collective, individual board members and the committees of the board themselves are needed to create parameters and boundaries around keeping the board focused on its significant role in governance.

I have been known to point out “Would you see a board committee of Pepsi-Cola engaging in supervising staff other than the CEO, or working in the factory bottling soda pop? Even small, family-owned businesses need to talk about things like, “There is a new competitor in town, what does that mean for us?” or “Our chocolate sales hit rock bottom, what is our cash flow over the next year?”

BOARD COMMITTEESit’sallintheminutia

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No, so what makes us in nonprofits think that we need to operate any differently? Just because we are ‘non-profit” doesn’t imply that our board of directors should operate any differently. The difference being that for-profit boards report to stockholders and our boards report to stakeholders.

GOVERNANCEmorethanaluxury,itisessentialandsoaretheseresources...

In a capital campaign, board members should make the organization a priority through:

- Reviewing their philanthropic priorities and committing to make a “stretch” gift to the campaign.

- Board members should all support the annual fund campaign each year in addition to supporting the capital campaign.

- All board members should participate financially in the campaign – to the best of their ability.

05//THE CAPITAL CAMPAIGNwhat’saboardtodo?

- The board should be the first to give. It is essential that other donors see 100% participation of the board. It shows them that the board has the utmost faith, confidence, and enthusiasm for the organization.

- Considering what role they could and would like to play in the campaign. Every board member should be responsible for some part of the campaign and should be engaged in identifying and enlisting campaign committee members.

- Reviewing their list of contacts – friends, neighbors, business associates – and consider carefully which of of them should be given the opportunity to learn more about the organization and to participate in the campaign. This is not about “trespassing” on personal relationships.

- Reviewing and approving the capital campaign plan as recommended by the capital campaign planning committee.

- Advocating for the organization, to the best of his/her ability, in the local and the wider communities.

- Evaluate the success of the campaign to determine strengths, areas of improvement and effectiveness of board policies and decisions.

THE CAPITAL CAMPAIGN CONTINUED

The board of directors is legally and morally (ethically) accountable for the health and effectiveness of the organization. The board ensures that the organization achieves its mission in an ethical, transparent, accountable, and prudent manner.

The board’s job is governance, the ongoing process of due diligence whereby the board operates as a collective to ensure corporate health and effectiveness and provide mission-based leadership. Specifically, the board is accountable for the functions described below.

The board works in partnership with its chief executive (CEO OFFICER). The executive provides leadership and support managing day-to-day operations, enabling the board to carry out its governance responsibility. Appropriate involvement of the board is both critical and expected.

06//THE BOARD’S JOB what’syourposition?

BOARD FUNCTIONS & SCOPE

- Articulate values and mission, and set standards, controls, and policies and assume responsibility of legal and ethical matters.

- Ensure that all the organization’s programs, activities, and operations adhere to these.

- Ensure that the organization is relevant to the community through processes that monitor the external environment and define vision, direction, and strategy.

-Define and monitor key areas of performance compared with short- and long-range strategy and plans, assess results and ensure that steps are taken for continuous quality improvement in all areas.

-Ensure financial sustainability through adopting annual budget, monitor income and expenses, accepting audit reports, take an active role in fund development, oversee the management of funds and property, etc.

- Ensure that adequate risk management is in place, e.g., safety and security, insurance, data backup, CEO succession, board officer and board member succession, etc.

- Define criteria for board membership, ensure proper recruitment of candidates, elect members and officers, and ensure proper orientation and development of board members.

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- Define and enforce parameters of the board’s work, including its committees and task forces, and the role and performance of the individual board member Assess effectiveness. - Define the role of and hire the CEO. Appraise performance; set compensation; reward competence; and, if necessary, replace the individual.

- Ensure compliance with relevant laws and regulations.

- Ensure effectiveness of management without intruding in manage-ment’s role and author roles. - Act as a think tank and sounding board regarding organizational health and effectiveness and the marketplace environment without compromising management’s authority management of funds and property, etc.

BOARD QUALIFICATIONS

Idealcandidateswillhavethefollowingqualifications:

- Extensive professional experience with significant executive leadership accomplishment in business, government, philanthropy, or the nonprofit sector.

- A commitment to and understanding of the organization’s beneficiaries, preferably based experience.

- Savvy diplomatic skills and a natural affinity for cultivating relationships and persuading, convening, facilitating, and building consensus among diverse individuals.

- Adequate time to invest in board and committee work.

- Personal qualities of integrity, credibility, and a passion for improving the lives of the organization’s beneficiaries. Service on the board of directors is without remuneration, except for administrative support, travel, and accommodation costs in relation to board members’ duties.

Qualifications - This is an extraordinary opportunity for an individual who is passionate about the organization’s mission and who has a track record of board leadership. Selected board members will have achieved leadership stature in business, government, philanthropy, or the nonprofit sector.

His/her accomplishments will allow him/her to attract other well-qualified high-performing board members.

BOARD MEMBER EXPECTATION STATEMENT

GENERAL EXPECTATIONS - Support the organization’s mission, purposes, goals, policies, and programs. - Suggest possible nominees to the board who can make significant contributions to the work of

the board and the progress of the organization. - Serve actively on committees of the board as requested by the Chair. - Attend activities and events sponsored by the organization whenever possible.

MEETINGS - Prepare for and participate in board meetings and committee meetings, including appropriate

organization’s activities. - Ask timely and substantive questions at board and committee meetings, while supporting the

majority decision on issues decided by the board. - Maintain confidentiality of the board’s executive sessions, and speak for the board or the

organization only when authorized to do so. - Suggest agenda items for board and committee meetings to ensure that significant policy

relation matters are addressed.

AVOIDING CONFLICTS - Serve the organization as a whole rather than any special interest group. - Avoid even the appearance of a conflict of interest that might compromise the board and

disclose any possible conflicts to the board in a timely fashion. - Never accept or offer any favors or gifts from or to anyone who does business with the organization.

FIDUCIARY RESPONSIBILITY - Exercise prudence and sound fiscal practices with the board. - Faithfully read and understand the organization’s financial statements and otherwise help the

board fulfill its fiduciary responsibility.

FUND RAISING - Make an annual gift to the organization according to personal means, and with the realization

that the leadership role the board plays in fund development. - Assist the organization with the development of and implementation of fund development

strategies. - Make the organizationone of your three giving and serving priorities.

What’s expected,whatdoweexpectof you?

BOARD OF DIRECTORS MEETING AGENDA

1. MEETING OPENING: WELCOME AND CALL TO ORDERMISSION MOMENT - PROGRAMS, PROJECTS, TESTIMONIALS, ETC.PREVIOUS MEETING MINUTES

2.MATTERS FOR DECISIONS: FOR EXAMPLE - MAJOR STRATEGY DECISIONS I.E. PLANS FOR 2016-2017

3.MATTERS FOR DISCUSSION:EXECUTIVE DIRECTOR’S REPORT – SIGNIFICANT ISSUES, MATTERS FOR APPROVAL, ETC.

4. COMMITTEE MINUTES:FINANCE COMMITTEEGOVERNANCE/BOARD DEVELOPMENT COMMITTEEFUND DEVELOPMENT COMMITTEE

5.NEW AND OLD BUSINESS

What do we talk about?asamplingof meetingtopics

6.WRAP UP AND ADJOURNMENT:REVIEW ACTIONS TO BE TAKENEVALUATE MEETINGNEXT MEETINGMEETING CLOSE

CONCLUSION

This resource provides you with some concrete suggestions on how to govern an organization through efficiently recruiting new Board members, assessing them, and setting them up for success. I hope that through this resource you will have the tools that you need to begin to shift your organization from managing to governing.

It all begins and ends with your Board of Directors, so use the resources laid out here to ensure that your organization is set-up to engage your members and ensure the long-term sustainability of your organization.

Thanks for Reading!For more from Robin L. Cabral,

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