by Resource Sharing Project staff
This article was written by the author for the RSP Executive Director Manual
Nonprofit organizations provide services that would not otherwise be provided by the government or for profit sector. Nonprofits are often founded by a group of highly motivated individuals who see a need and put the resources together to meet that need. Due to the inherent nature of nonprofit work, we as a society have agreed to support this work through private giving, grants, awards and federal and state tax exemptions. Sexual assault coalitions in general have the benefit of our sisters who came before us and have done the ground work it takes to put a formal structure of a coalition together. For that we are thankful.
Each coalition has a different look and feel to it and each has organized itself to meet the particular needs of that state or territory. These organizations all have something in common; the requirements of a 501(c)3 which includes a mission statement and a governing body: your board of directors.
This section addresses the work of a coalition board of directors (BOD) including:
The following is an excerpt from “Your Board of Directors: The Basics” by Christiane Hurt, Washington Coalition of Sexual Assault Programs’ Guide to Understanding and Developing the Board of a Community Sexual Assault Program:
Why a Board of Directors?
A board of directors must be in place for a nonprofit organization to become a corporation. By becoming a corporation, the organization takes on an identity of its own, apart from those of its founders. The corporation itself can hire staff, engage in business transactions, and own property.
Although for profit industries have boards of directors, they are very different from the Boards of nonprofit organizations. In a for profit corporation, the board of directors represents the people who hold stock in the corporation. As their representatives, the board makes decisions that would be in the shareholders’ best interests and will ultimately benefit them financially. In a nonprofit organization, there are no shareholders. However, there are a number of parties who are stakeholders in the organization, such as donors, clients, community members, and other service providers. In a nonprofit organization, the board of directors represents these constituents and makes decisions based on these multiple interests.
Because nonprofits exist to benefit society, they receive many privileges from both federal and state governments in order to help them operate. These organizations are exempt from paying income tax, can receive tax-deductible donations, are eligible to receive grant awards, and are often exempt from property taxes. Nationwide, these benefits total many billions of dollars annually. This money is, in effect, contributed to these organizations from the government and its taxpayers. Because nonprofit organizations receive these financial benefits from the government and its tax payers, the government then requires that there be a board of directors in each organization to represent the interests of the public. The board of directors of a nonprofit organization is in place to serve as the steward of the resources that are contributed to the organization from the community at large, including the government.
Board members also provide important resources that help fulfill an organization’s mission, including time, expertise, and energy. In addition, board members can communicate the values of an organization, bring credibility to the organization, and contribute their individual skills and expertise to the organization.
Because of their responsibility for the stewardship of the agency, the government outlines some of the basic duties of a board of directors. Legal responsibilities of a board of directors are applicable in most states. They may include the following:
Duty of Care
Duty of Obedience
Duty of Loyalty
These three duties represent different categories of responsibilities the Internal Revenue Service has given to boards. The Duty of Care refers to the board’s responsibility to be competent. In other words, the board must exert the care an “ordinarily prudent person” would when making a decision. Board members should read all program and financial reports and should engage in thoughtful discussions about all relevant issues. In order to show that the board has engaged in these discussions, minutes of each meeting should be taken and board members’ votes should be accurately recorded.
The Duty of Obedience requires that board members be faithful to the organization’s mission. Board members should refer to the organization’s mission when making decisions or planning for the organization’s future. The IRS gives organizations tax breaks and other special privileges for pursuing their mission; if organizations use these privileges for other reasons, they are in violation of the law. Board members are responsible for ensuring that organizations be true to their missions.
Lastly, the Duty of Loyalty refers to the board’s responsibility to be faithful to the organization. Each board member should have undivided allegiance to the agency and should not be engaged in conversations in which they may have conflicts of interest. For this reason, it is imperative that all boards develop and follow conflict of interest policies, in order to minimize the impact of potential conflicts.
Boards are critical pieces of any nonprofit agency and should not be underestimated. Serving on a board is a responsibility and a commitment. By understanding their responsibilities, board members can better serve the organization and help it meet its overall goals.
About Policy and Governance
We hear a lot about a board’s responsibility to set policy and otherwise govern an organization. But exactly what do we mean when we say that?
Policy is defined by Webster’s Dictionary as “a high level overall plan embracing the general goals and acceptable procedures.” In effect, policies are the basic rules that an organization uses to determine its course of activity.
Governance is derived from the verb “to govern,” which is “to exercise continuous sovereign authority over. To control and direct the making and administration of policy.” The board establishes the foundation and the framework for the organization, thereby setting the parameters for all organizational activity.
The board is responsible for governing an organization, which is done most effectively through the establishment of policy. Governing is the act of setting the goals, vision, priorities, and basic decision-making structure for the agency. By setting these important parameters, the board creates the foundation for all organizational activities; all programs established in the organization should be in line with the organization’s mission and goals. By setting policy, the board establishes priorities for action and parameters for future decision-making. Board members should approve policies in a number of organizational areas:
- Board procedures and operation,
- Financial controls (investment, reporting, audits, etc.),
- Personnel (recruitment, diversity plan, hiring/termination, vacation time, evaluation, etc.),
- Public Relations (media plan, designated spokespeople), and
- Fundraising (types of activity, who will be involved).
Policies should be approved by the board, and can be developed in conjunction with staff. To be effective, policies must be implemented consistently and should be regularly reviewed and revised when necessary.
While the board sets the policy, staff is charged with carrying out the daily business of the organization. Staff members implement programs and activities to help the organization reach its goals, within the parameters set up by the board. Staff may develop procedures and plans to guide agency activities to reach the goals of the organization. Procedures and plans differ from policy; they are the documents that outline the details for the implementation of programs and activities, while policies set the parameters and serve as the general rules for all organizational activities.
Procedures are documents that can be developed by staff or board, depending on the topic. Procedures outline the steps required to complete specific activities or tasks. For example, a board may develop a procedure to outline how to recruit new board members. The procedure may outline how to recruit new members, how potential members apply, how the board reviews the applications, and how the board or membership votes on new applicants. In turn, staff may develop procedures explaining how to create and maintain client files.
Plans are documents that lay out concrete goals and timelines for activities. Similar to procedures, plans may be developed by either staff or the board, depending on the topic. For example, a board may have a fundraising plan that lays out goals for developing more income, a list of ways to generate the money, with timelines about when those fundraisers will take place, while staff might create a plan to guide volunteer recruitment.
The board sets the parameters for the staff’s work through the use of policy. Staff in turn develops programs that meet the goals of the board and fit in the framework they determine for the agency.
Responsibilities of Nonprofit Boards (Adapted from the National Center for Nonprofit Boards booklet, “10 Basic Responsibilities of Nonprofit Board Members”)
1. Determine the agency’s mission and purpose
A board of directors is responsible for setting the course for the organization. They should establish the mission for the organization when it is conceived. The board should revisit the mission of the agency every five years in order to evaluate its relevance to the field, in light of any trends or issues the agency is facing. In setting the organization’s purpose, the board determines the reason(s) for which the agency exists. The board should determine the agency’s programs and goals based on the mission of the organization. In other words, the energy of the organization must be used to accomplish the organization’s mission. The board is responsible for ensuring the organization stays true to its mission (Duty of Loyalty).
2. Select the Executive Director
The board of directors is responsible for hiring the executive director of the agency. The hiring process can be delegated to a committee of the board (such as a search committee), but the entire Board should be kept informed about the hiring process and should be able to give input into the criteria by which potential executives are assessed. Staff and other agency stakeholders should be given input into the search process. When it comes to hiring the chief staff officer of any agency, it is wise for the board to seek input from multiple stakeholders in order to make the best decision for the organization.
3. Support the executive director and assess his or her performance
The board must support and evaluate the executive director. Supporting the director includes:
- complimenting him or her for jobs well-done,
- giving him or her constructive feedback,
- assisting him or her when tough issues come up with other board members,
- keeping him or her informed of issues about which the board is aware,
- clarifying expectations the board has for him/her (including maintaining and up-to-date job description for him/her),
- encouraging the director to take care of himself or herself (including taking leave when necessary), and
- introducing him or her to community leaders.
A committee of the board (such as the executive committee) may conduct the annual evaluation of the director. The director should know well in advance of the review by what criteria he or she is being assessed. Some agencies may choose to have staff, volunteers, or community members provide input into the review process as well. It is important that the review be conducted in a confidential, professional manner. The evaluation for the executive director can be similar to the evaluations conducted for other agency staff.
4. Plan for the organization’s development
As the board sets the mission and purposes for the organization, it should also be engaged in a planning process to determine what specific goals the agency should seek to accomplish in order to pursue its mission. Planning can happen many different ways for organizations, but it is important that every agency engage in a planning process. The board may choose to bring in an outside facilitator to guide the agency in its planning. It is possible for the board to engage in a planning process without outside assistance, but the board may wish to examine any of the number of materials that have been published regarding strategic planning before beginning to plan.
5. Ensure adequate resources
The board sets the course for the agency, and it must ensure that the organization has access to enough resources to meet its goals. The board should be the main fundraising body of the organization. While it may require Staff support to complete its fundraising, the board must not rely on staff to fundraise. Fundraising may be delegated to a committee of the board, but it is important to note that ALL board members should be involved at some level with fundraising. Fundraising is more than hosting special events; fundraising includes soliciting individual donors as well. All board members should solicit donations from community members, and should make their own financial contributions to the agency. Beyond fundraising, the board should evaluate other potential sources of revenue for the organization. The board should continuously aim to find sustainable income for the organization.
6. Manage resources effectively
Because the board is the guardian of the agency and its resources, it is the responsibility of the board to make sure these resources are used wisely. In order to determine how to allocate the organization’s resources, the board should develop (in conjunction with agency staff) and approve the annual budget for the agency. After a solid budget is approved, the board should monitor the agency’s expenses to ensure that the agency remains within the parameters of the budget. In order to monitor the use of resources effectively, the board should receive and read financial reports on a monthly basis. It is the board’s job to ask clarifying questions if the financial reports are unclear. The board must take the time to carefully read these reports in order to keep tabs on the agency’s fiscal health. In order to best manage these resources, the board should determine the financial policies for the agency. (More information about these policies in contained in the Financial Management handbook.) The board should also ensure that the agency receives an audit each year.
7. Determine and monitor the organization’s programs and services
Programs exist in ever-changing environments. In order to change to meet the evolving needs of clients, the board must assess any trends that would alter the needs of or fundamentally change the client base. Boards should then use this information in the organization’s planning processes to adapt programs to meet the new and emerging needs. Organizations may need to alter their programs even if there are not new trends in the field. The board is responsible for evaluating the effectiveness of the organization’s programs and services as well. The board, in conjunction with staff, should determine when programs and services should be changed.
8. Enhance the organization’s public standing
The board members are the organization’s main representatives out in the community. In order to promote the organization, board members should be able to speak about the mission, goals, and programs of the agency. Board members should take opportunities to promote the organization to civic, religious, community, and government groups as appropriate. The board and executive director should determine who serves as the official spokesperson for the agency, but all board members should be able to speak intelligently about the organization on a more casual basis. Because board and staff cannot speak to every constituent or community member, organizations should publish an annual report that details programmatic accomplishments and financial data. By publishing such a document, the organization informs the public about its mission and successes and generates more interest in the agency as a whole.
9. Ensure legal and ethical integrity and maintain accountability
The board of directors is responsible for ensuring that the organization is in compliance with the law and with its contracts. In order to establish a system that encourages ethical and legal activity, the board must set policy for the organization. Major policy areas include personnel, finance, and conflict of interest. The board must ensure that any policies meet minimum legal requirements. Many boards choose to have an attorney review the personnel policies, for example, in order to make sure the agency stays in compliance with applicable employment law. Similarly, a board may choose to have a Certified Public Accountant review the agency’s financial policies. Because the board is ultimately responsible for ensuring the agency’s compliance with the law, boards may choose to bring in outside professionals with specific areas of expertise to guide them in setting policy. The agency also must follow the requirements of its own by-laws and articles of incorporation. The board should understand the contents of these documents and should follow the guidelines they outline. If the board does not follow its own policies, the agency becomes vulnerable and may face a lawsuit. Similarly, the board should make sure that the agency adheres to its contracts as well as occupational, safety, health, labor, and related regulations.
10. Board Development
Boards grow and change throughout the life of an organization. In order to best meet the changing demands facing them, the board should:
- Develop a new member orientation that prepares newcomers for their roles,
- Educate themselves continuously,
- Assess board performance,
- Identify and recruit new members, and
- Develop committees as appropriate.
A committee of the board, such as the nominating committee, may complete some of these tasks. All board members should identify their own needs for ongoing education and be responsible for seeking out resources that will assist them in their jobs.
A Word about Board Accountability
It is important to remember that a board of directors is accountable to its community, its clients, the federal and state governments, and all of the organization’s funding sources for the good management of the agency. By following the responsibilities outlined in the above list, any board of directors will be on the path to agency governance. However, the journey to healthy organizational development never ends. As the board becomes clearer about its roles and responsibilities, and continues to follow through on those responsibilities, new goals and objectives will emerge.
As the board develops, the members of the board should assess their performance and continuously look for ways to improve their operations. Creating effective feedback and evaluation opportunities for community members, staff, clients, and funders can provide the organization with valuable information about its performance and ways in which it can become more effective. These assessments and feedback opportunities can take many forms: the board may take an inventory on itself (see Board Assessment) or may bring in an outside consultant to complete an organizational assessment. The board may provide other stakeholders with a survey through which other individuals or groups can provide feedback.
Whatever the method, by soliciting feedback and thinking critically about the goals and objectives for an organization, the board can strive to continuously improve its effectiveness and supersede basic expectations.
The board of directors for your coalition can be structured in many different ways. Careful reflection upon the makeup of the board is an important decision by the board of directors that should be undertaken after serious consideration and with substantial input from the executive director, membership and other agency stakeholders. Over the past five years there has been increasing discussion about what the makeup of an ideal coalition board would consist of. There is no consensus about this decision and each coalition must arrive at its own conclusion, although boards have increasingly been structured to include representatives of communities or organizations outside of the coalition membership agencies.
Whose job is it? One could easily look at the duties of a board listed at the start of this section and conclude that the recruitment and selection of board members is the responsibility of the board. That is a true statement; however, you as the executive director have a great interest in the board and who serves because of some very basic and fairly apparent reasons:
- The way they do their job reflects upon you
- Their ability to be a well-functioning board with appropriate skills, and commitment will impact your level of performance, and
- Your board is your supervisor. You want one that is able to hold you accountable and at the same time respect your autonomy and understand both the role of the board and the role of the director.
Executive directors are often looked to by the board to play a substantial role in selection of new board members, and it is not uncommon for the board to rely totally on the director to scout out and put forth nominations for new recruits. You may find this especially true for your member programs and their board of directors.
A board of directors should have in place some structure to solicit new board members. This often is in the form of a nomination or board development committee. Tasks that this committee might have would include the following:
- Analyzing present composition and needed composition
- Analyzing performance of current board members eligible for re-election
- Developing a recruitment plan
- Identifying prospects
- Conducting the recruitment
The recruitment plan should consider the coalition’s goals around supporting underserved communities in their service area and that should be reflected in the recruitment plan for board members. Consideration should be given to BOD meeting accessibility and environment.
Organizations should use a recruitment matrix in order to identify the skill base and knowledge that is needed in new coalition board members. There are many of these tools available on the web that can be easily downloaded and adapted for your use.
Diversifying your board can be put into seven words: It is the right thing to do. The coalition’s role is to do the work that individual sexual assault agencies cannot do and therefore rely on a larger more encompassing organization to be the voice for them on a state wide level. So as a sexual assault coalition you are representing the victims of sexual violence in your state or territory. A BOD of a coalition must then reflect the constituency of the sexual assault victims within your service area. Funders, donors and other interested parties often look at who constitutes the BOD for an organization and they may have an expectation that the constituency that is served is represented on the board. Another benefit to having a diverse BOD is that it results in increased awareness of the organization and its work by more people in more areas. It also provides the organization with increased opportunity to become more culturally competent.
Read your mission statement. Many coalitions have words such as “unite” or “inclusive” or “alliance” which all support having a diverse BOD. Such a board may help this governing body of your agency keep aligned with your mission. Additionally having a more inclusive BOD may also increase your service base or increase opportunities for systems advocacy or at least get increased familiarity with your organizations within your service area–all good things.
A final reason to have a diverse board is that it lends a perspective that may help keep the coalition focused. The perspective of those utilizing the services your coalition provides should be reflected in the planning and operation of your organization and that means top down. This should help build accountability for the coalition to advocate for an effective response to all people affected by sexual violence.
Your board needs to have a firm commitment to diversity and stand behind that commitment. Ways to add accountability is to create a sense of ownership in this endeavor. The board needs to announce this commitment, put it in writing; and create a policy that supports this work. The board should develop clear and specific goals and include them in the minutes and in the organization’s strategic plans. These goals and progress towards obtaining them should be reviewed periodically.
In your effort to diversify your coalition BOD use care not to cross the line into tokenism. Tokenism occurs when you recruit based on a person’s ability to represent a specific group and there is an expectation that the person selected will represent or be the voice of all people within that group or similar group. This places people in an impossible box and it is unlikely that a person recruited to fill this box will have a very long tenure or perhaps sketchy attendance and eventually may leave very disheartened and you potentially will have done more damage than good in your endeavor.
According to Board Source and the Learning Center, the following are ways to promote diversity while avoiding tokenism:
- Choose board members who contribute according to their skill and knowledge. Focus on the entity as a diverse mixture, not as individual representation.
- Remind board members of their Duty of Loyalty””board members are charged with duty to the organization and its best interests, tokenism promotes individual commitment to a population group or interest.
- Treat each board member equally
- Expect the same from everyone
- Each board member, new or old, has the same responsibilities
- Involve every new member immediately
- Assign tasks independently of cultural or ethnic background
- Recruit several members at the same time from the same group.
An executive director will encounter many opportunities for learning experiences when working with their boards. Most of these learning opportunities are disguised as challenges. These experiences can be simultaneously enlightening and stressful, and the executive director must determine how to minimize the negative impact that a difficult board member, situation or event has on themselves and their agency.
On the one hand you are the employee and they are your employer so with that in mind there is an inherent power differential that will always be in play. On the other hand you as executive director have something they need. They need a qualified person to run the organization because they are responsible for having a competent and capable person at the helm. So until you or they decide it is not a good fit, you will get this board with all its idiosyncrasies for better or for worse. Most of the time this is just an issue of getting to know the people involved. Occasionally, however, it becomes more serious than personality differences.
Your board chairperson should be someone you can rely on to assist you in working out challenging problems. Hopefully there is nothing to impede the relationship you have with this significant person. As issues arise on the BOD the chairperson is usually responsible for handing these situations. Such situations are poor attendance; poor follow through, micro managing the ED, breach of confidentiality and anything else regarding the behavior of specific board members. Below are some websites for handling difficult board members. Another resource is to contact your RSP TA provider and see what resources or referrals the RSP has available.
To keep an organization at the top of its game it is helpful to do an organizational assessment periodically. This assessment may be a board assessment or an overall organizational assessment, see additional sections in the chapter of the manual for more information on an organizational assessment.
There are many board assessment tools available on line. Check the resources at the end of this section for quick on-line tools. Generally speaking the board should evaluate itself on each of the ten responsibilities that is has. Each member should evaluate the board and then there should be a discussion about each evaluation item. Is the board doing well, fair, poor or is there insufficient information to make a statement on each item of the assessment? A plan should follow with goals and a timeline for bringing each item up to a pre-determined level. These goals and timelines should be included in minutes and revisited periodically to ensure compliance with the plan. An evaluation without accountability is seldom useful in effecting change.
Here is a list of sample board assessment tools: