Board Training for Nonprofits

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Board Training for Nonprofits

  1. 1. Effective Non-Profit Boards BOARD OF DIRECTOR TRAINING
  2. 2. Agenda 2 ROLE OF THE BOARD BOARD GOVERNANCE GRANT OVERSIGHT AND ACCOUNTABILITY FINANCIAL OVERSIGHT AND PLANNING POLICY DEVELOPMENT AREAS FOR FURTHER EXPLORATIONCatapult Strategic Consulting, LLC September 2012
  3. 3. Board MemberRoles and ResponsibilitiesTHE PLAYERS AND THEIR PARTS
  4. 4. Who is at the Board Table? 4 Directors Officers CEO and StaffCatapult Strategic Consulting, LLC September 2012
  5. 5. Board Member Obligations 5 Duty of Care Use your best judgment in all dealings Duty of Loyalty Be faithful and avoid conflicts of interest Duty of Obedience Stay true to the organization’s mission and applicable lawsCatapult Strategic Consulting, LLC September 2012
  6. 6. Top 10 Roles of the Board 61. Establish organization’s mission and purpose2. Select the Executive Director3. Support and evaluate the Executive Director4. Ensure effective planning5. Monitor and strengthen programs and services6. Ensure adequate financial resources7. Protect assets and provide financial oversight8. Build a competent board9. Ensure legal and ethical integrity10. Enhance the organization’s public standingCatapult Strategic Consulting, LLC September 2012
  7. 7. Board Officers 7 Provides leadership to board Chair Runs meetings Interacts closely with CEO Coordinates financial oversight Treasurer Chairs the finance committee Keeps records for the board Secretary Takes minutes of board meetingsCatapult Strategic Consulting, LLC September 2012
  8. 8. Role of CEO 8 Ex-Officio Member of Board Board Administration & Support Program and Service Delivery Financial, Tax, Risk & Facilities Management Human Resources Management Communications & Public Relations FundraisingCatapult Strategic Consulting, LLC September 2012
  9. 9. Who is Responsible? 9 For each item below, identify the group you think should handle the task. Do you think the task is the responsibility of the directors, the officers or the CEO and staff?  Grant Writing  Center Curriculum  Board Member  Staff Performance Recruitment Reviews  Fundraiser Details  Fundraising  Grant Quarterly Reports  Risk Management  Annual Operating  Update Mission Budget Statement  Long Term Planning  Donor Recognition  Volunteer ManagementCatapult Strategic Consulting, LLC September 2012
  10. 10. Board Governance HOW YOU DO WHAT YOU DO
  11. 11. Board Governance 11 Documentation Decision Making Strategic PlanningCatapult Strategic Consulting, LLC September 2012
  12. 12. Purpose of Governance Documents 12 Specify Entity’s Purpose Define Legal Rights and Limits Prevent Misunderstandings Guide Decision-Making Provide Flexibility Record Activities Manage Risk Maintain Non-Profit StatusCatapult Strategic Consulting, LLC September 2012
  13. 13. Organizational Documents 13 Articles of Incorporation Application for Tax Exempt Status Determination LetterCatapult Strategic Consulting, LLC September 2012
  14. 14. By-Laws 14 Organization Name and Purpose Membership, if any Number, Term, Election and Removal of Board Members Board Member Powers and Compensation Meetings and Quorum Designated Officers and their Duties Board Committees Board Member Restrictions Contracts, Checks, Deposits and Funds AmendmentsCatapult Strategic Consulting, LLC September 2012
  15. 15. Reporting Documents 15 Board Manual Meeting Minutes Form 990 Lobbying Activity Compensation SubstantiationCatapult Strategic Consulting, LLC September 2012
  16. 16. Decision Making Process 16 Board Member Board Proposal/ Discussion Decision Committee Motion CEOCatapult Strategic Consulting, LLC September 2012
  17. 17. Keys to Effective Decision-Making 17 Stick to Strategic Priorities Define Problems and their Significance Establish Criteria for Evaluating Alternatives Distribute Important Information Before Meetings Communicate, Communicate, CommunicateCatapult Strategic Consulting, LLC September 2012
  18. 18. Strategic Planning 18 Update and clarify your mission Identify the ideal future Define coordinated activities Give direction to board and staff Quantify necessary resources Detect areas of greatest riskCatapult Strategic Consulting, LLC September 2012
  19. 19. Strategic Plan Components 19 Mission Why we are here What the world will look like when we have accomplished our Vision mission SWOT Our strengths, weaknesses, opportunities and threats The key areas we will address now to achieve our mission and vision, while utilizing our strengths, compensating for our Priorities weaknesses, taking advantage of opportunities and protecting against threats Broad statements of what we will accomplish during the planning Goals period Objectives Specific and measurable steps to attain our identified goals Who is responsible for accomplishing objectives and goals of the Action Plans plan; includes deadlines and budgetsCatapult Strategic Consulting, LLC September 2012
  20. 20. Secrets to Successful Business Planning 20  Senior Leadership Supports  Involves Members of all Stakeholder Groups  Considers Best Practices of Others  Innovation is Valued  Staff By-In  Communication, Communication, Communication If you dont know where you are going, you will wind up somewhere else. -Yogi BeraCatapult Strategic Consulting, LLC September 2012
  21. 21. GrantOversight & Accountability PROGRAM FUNDS, BUDGETS AND CONTRACTS
  22. 22. Characteristics of Program Funds 22 Restricted Contributions Only Pay for Specific Business Costs Spent During Specific Time Frames Limited, if Any, Use for Overhead ContractualCatapult Strategic Consulting, LLC September 2012
  23. 23. Board Responsibilities re: Programs 23 Ensure program funds are only spent on program activities Measure and monitor program progress and effectiveness Make changes as necessary Report to funding sources (i.e., government) – how money was spent and outcomes Meet legal requirements outlined in grants Ensure continued fundingCatapult Strategic Consulting, LLC September 2012
  24. 24. Classification of Revenue 24 Unrestricted Revenue Temporarily Restricted Revenue Permanently Restricted RevenueCatapult Strategic Consulting, LLC September 2012
  25. 25. Program Budgets 25 Financial Activities OutcomesCatapult Strategic Consulting, LLC September 2012
  26. 26. Financial Budgeting 26 Grant Receipts Other Program Income $ spent – Direct Program Expenses Overhead AllocationCatapult Strategic Consulting, LLC September 2012
  27. 27. Activity Budgeting 27 Staff Hours Volunteer Hours Clients contacted Classes TaughtCatapult Strategic Consulting, LLC September 2012
  28. 28. Tracking Outcomes 28 Clients served Skills Learned Placements Made Client SatisfactionCatapult Strategic Consulting, LLC September 2012
  29. 29. Contract Compliance 29 Grant is a Legal Contract Obligations Outlined in Contract Documents Document How Program Funds Spent Demonstrate How Programs Goals Achieved Regular Reporting Intervals Keep Program/Contract Officer InformedCatapult Strategic Consulting, LLC September 2012
  30. 30. Compliance Program Elements 30 Authorization Independence Transparency Documentation Reporting Guidelines Internal Controls RegulationsCatapult Strategic Consulting, LLC September 2012
  31. 31. Common Noncompliance Issues 31 Sufficient Program Documentation Travel Documentation Cost-Sharing Records Retention Separation Financial Administration for Each Award Violation of Institutional Conflict of Interest Rules Subgrantee Monitoring Residual Funds accounting and dispositionCatapult Strategic Consulting, LLC September 2012
  32. 32. Risks of Noncompliance 32 Administrative Sanctions Reductions in Payments Termination of Grant Suspension Corrective Action Plans Fines or Penalties Damage to ReputationCatapult Strategic Consulting, LLC September 2012
  33. 33. Financial Oversight & Planning LINKING MONEY & MISSION
  34. 34. Leadership Obligations 34 Understand Service Delivery Model Know Fully-Loaded Cost of Providing Services Communicate Your Financial Story to StakeholdersCatapult Strategic Consulting, LLC September 2012
  35. 35. Financial Documents 35 Financial Statements o Statement of Activities (aka Income Statement) o Balance Sheet Audits IRS Form 990Catapult Strategic Consulting, LLC September 2012
  36. 36. Financial Statement Interpretation 36 Statement of Activities Records all revenue received, expenses incurred, and changes in net assets during a particular period of time (i.e., month, quarter, year) Balance sheet Shows the assets, financial resources, debts, and other liabilities at any given moment in time (i.e., end of fiscal year)Catapult Strategic Consulting, LLC September 2012
  37. 37. Scarce Resources 37 Cash Personnel Time Space Supplies DonationsCatapult Strategic Consulting, LLC September 2012
  38. 38. Allocating Resources 38 Grant Obligations Cost/Benefit Industry Standards Watch Dog GroupsCatapult Strategic Consulting, LLC September 2012
  39. 39. Forecasting Considerations 39 Strategic Plan Driven Involve All Programs Include Contingency Plans Cash is King Account for Restricted Funds Research Material Assumptions Roll for 12 Months or 4 Quarters Require Board ApprovalCatapult Strategic Consulting, LLC September 2012
  40. 40. Day 1 Review 40 Board Member Roles Accountability  Directors  Program Funds  Officers  Budget & Management  Staff  Compliance Governance  Financial Oversight &  By-Laws Planning  Decision Making  Financial Statements  Strategic Planning  Resource Allocation  Forecasting Grant Oversight &Catapult Strategic Consulting, LLC September 2012
  41. 41. Questions & AnswersWHAT’S ON YOUR MIND?
  42. 42. King Edwards Incorporated BOARD OF DIRECTORS TRAINING
  43. 43. Policy Development MOVING THE ORGANIZATION FORWARD
  44. 44. Board Resolutions 44 Formal Documents Solidify and Document Board Decisions Typically Address  Financial Matters  Implementation of Policy  Adoption, Approval or Authorization of Actions being taken by OrganizationCatapult Strategic Consulting, LLC September 2012
  45. 45. Board Meeting Minutes 45 Document key information and important decisions Record board actions, elections and committee and staff reports Legal record of board discussions and decisionsCatapult Strategic Consulting, LLC September 2012
  46. 46. Content of Meeting Minutes 46 Date and Time of Meeting Whether meeting is regular or special meeting Whether notice was given or waiver of notice was signed by all directors Names of directors in attendance and directors not in attendance Names of attending guests and their titles Whether a quorum was established An departures and re-entries of attendees Any board actions takenCatapult Strategic Consulting, LLC September 2012
  47. 47. Great Minutes 47 Include alternatives considered for important decisions Attach and/or briefly summarize committee reports Record when requirements of vote (i.e., majority) are reached Record recusals from discussions and abstentions from voting Include votes against motions Include action itemsCatapult Strategic Consulting, LLC September 2012
  48. 48. Areas for Further Exploration BOARD BEST PRACTICES
  49. 49. Role of the Board of Directors 49 Role is Clear and Distinct from Staff Board has Governance Focus Members Understand their RolesCatapult Strategic Consulting, LLC September 2012
  50. 50. CEO is the Agent of the Board 50 Board of Directors CEO StaffCatapult Strategic Consulting, LLC September 2012
  51. 51. Well-Informed Board 51 Job Descriptions Board Handbooks Board Orientations Continuing Education Opportunities Regular and Honest EvaluationsCatapult Strategic Consulting, LLC September 2012
  52. 52. Recruit Strategically 52  Demographic Diversity  Professional Experience  Leadership Qualities  Community Connections  Past Board Experience  Capacity to GiveCatapult Strategic Consulting, LLC September 2012
  53. 53. High Functioning Board Committees 53 Clearly defined areas of responsibility Cut across all organizational functions – not “program silos” Chaired by board member Includes non board members Senior staff member provides supportCatapult Strategic Consulting, LLC September 2012
  54. 54. Suggested Committee Structure 54 • Limit Standing Governance Committees Ad Hoc Ad Hoc • Use Ad Hoc Committees as Necessary External Board of Planning & Program Relations Directors Development Ad Hoc Ad Hoc Performance OversightCatapult Strategic Consulting, LLC September 2012
  55. 55. Board Leadership in a Nutshell 55 Where should the organization be headed in the long run? Where is the organization now? How well is the organization performing programmatically, financially and administratively?Catapult Strategic Consulting, LLC September 2012

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