Advanced Board Development


Published on

Presentation by Neel Hajra

Published in: Business, Technology
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Slide overview: Opening welcome Before proceeding through the training slides, offer the opportunity for participants to introduce themselves. Flip through the major sections of the training guide and any other materials provided to the participants. Highlight the common challenges of training participants, or ask the participants to identify why they are interested in building their boards. getting rid of “dead wood” on the board adding members too quickly anticipating future organizational growth in board recruitment moving from founding the governing board, finding the right board members for this process presenting the organization’s assets to a prospective board member bringing customers/consumers or org members onto the board finding the right qualities and skills managing expectations transitioning the leadership of the board
  • Advanced Board Development

    1. 1. Advanced Board Development 4 th Annual Funding Resources Face to Face October 22, 2008
    2. 2. Training Objectives <ul><li>Review climate for nonprofit boards today </li></ul><ul><li>Review the new standards of conduct of board service </li></ul><ul><li>Transparency, the Internet and the IRS </li></ul><ul><li>Discuss the work of the nonprofit board </li></ul><ul><ul><li>Board Operations, Strategic Planning, Ambassadorship, Oversight, Resource Development </li></ul></ul>
    3. 3. The Nonprofit Sector <ul><li>AKA the third sector, independent sector, charitable sector, voluntary sector </li></ul><ul><li>Nonprofits vary in size and scope </li></ul><ul><li>Over 1.5 million nonprofits in the U.S. </li></ul><ul><ul><li>Over 10.9 million paid employees and 60 million volunteers </li></ul></ul><ul><li> (Source: The Independent Sector, 2002) </li></ul>
    4. 4. Nonprofits in Michigan <ul><li>43,000 nonprofits </li></ul><ul><li>400,000 nonprofit employees </li></ul><ul><li>Average wage = $26,000 </li></ul><ul><li>Generate an additional 135,000 jobs as a result of spending </li></ul><ul><li>Generate nearly $69 billion </li></ul><ul><li>in total economic activity </li></ul><ul><li>Source: Michigan Nonprofit Association 2008 </li></ul>
    5. 5. Issues in the Sector <ul><li>Increased competition for funding </li></ul><ul><li>Increased expectations from funders </li></ul><ul><li>Charity “Watch Dog” groups </li></ul><ul><li>Staffs too small to build capacity </li></ul><ul><li>No strategic plans to set “road map” </li></ul><ul><li>Lack of leadership – boards </li></ul><ul><li>No succession planning – boards & staffs </li></ul><ul><li>Lack of focus on mission - boards </li></ul>
    6. 6. Issues with Boards <ul><ul><li>Do not fundraise </li></ul></ul><ul><ul><li>Do not understand diversified funding sources </li></ul></ul><ul><ul><li>Do not understand their duties and roles as </li></ul></ul><ul><ul><li>outlined by the IRS and sector experts </li></ul></ul><ul><ul><li>Do not educate themselves - “I've been a board </li></ul></ul><ul><ul><li>member for 20 years... there is nothing new to </li></ul></ul><ul><ul><li>learn.” </li></ul></ul><ul><ul><li>Defer to staff </li></ul></ul><ul><ul><li>Don't provide vision </li></ul></ul><ul><ul><li>Don't make decisions based on mission </li></ul></ul>
    7. 7. What Are We Missing? <ul><li>What issues do you see with nonprofit boards </li></ul><ul><li>today in general? </li></ul><ul><li>What issues do you see in Michigan? </li></ul><ul><li>What issues do you have with your board? </li></ul>
    8. 8. Why Be a Board Member? <ul><li>Help the nonprofit achieve its mission </li></ul><ul><li>Leverage existing skills or develop new management skills </li></ul><ul><li>Broaden your professional and personal network </li></ul><ul><li>Demonstrate commitment to your community </li></ul>
    9. 9. Appointed vs. Recruited <ul><li>There is no legal difference between a board </li></ul><ul><li>member who is appointed to a 501(c)(3) </li></ul><ul><li>nonprofit board and a member of the </li></ul><ul><li>community who is recruited and elected to the </li></ul><ul><li>board. You all hold the same responsibility. </li></ul>
    10. 10. Focus on Mission <ul><li>The sole reason the board exists is to ensure the mission is achieved </li></ul><ul><li>The mission should be the primary focus when transacting board business </li></ul><ul><ul><li>Program development </li></ul></ul><ul><ul><li>Setting financial priorities </li></ul></ul><ul><ul><li>Strategic planning </li></ul></ul>
    11. 11. Standards of Conduct “ Board members need to come prepared, rise to the occasion, work diligently as a group, and expect to be intellectually taxed by complex and consequential questions.” Governance as Leadership: Reframing the Work of Nonprofit Boards, Richard P. Chait; William P. Ryan; Barbara E. Taylor © 2005 by BoardSource, Inc., p. 180
    12. 12. Standards of Conduct (“Duties”) <ul><li>Duty of Care </li></ul><ul><li>Duty of Loyalty </li></ul><ul><li>Duty of Obedience </li></ul><ul><li>Duty of Confidentiality </li></ul>… when doing “the work of the board”
    13. 13. Protection Against Liability <ul><li>Liability can arise when duties of care, loyalty, or obedience are breached </li></ul><ul><li>Protections against liability </li></ul><ul><ul><li>Prudent and careful oversight! </li></ul></ul><ul><ul><li>Indemnification policy in nonprofit bylaws </li></ul></ul><ul><ul><li>Director and Officer Liability Insurance </li></ul></ul><ul><ul><li>Personal liability insurance (e.g., “umbrella” policy) </li></ul></ul><ul><ul><li>Employer insurance on behalf of employees </li></ul></ul>
    14. 14. Board Duties vs. Board Roles <ul><li>Duties explain how the board BEHAVES when fulfilling the Roles and Responsibilities. </li></ul><ul><li>Roles and Responsibilities are what the board DOES . </li></ul>
    15. 15. Work of the Board <ul><li>Board Operations </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Resource Development </li></ul><ul><li>Oversight </li></ul><ul><li>Ambassadorship </li></ul>
    16. 16. Board Operations <ul><li>Life Stages and Board Roles </li></ul><ul><li>Board Composition </li></ul><ul><li>Recruitment and Education </li></ul><ul><li>Effective Meetings </li></ul><ul><li>Committees </li></ul>
    17. 17. Life Stages and Board Roles <ul><ul><li>Variations: Founding Boards, Institutional Boards </li></ul></ul><ul><ul><li>(Source: Jay Connor, The Collaboratory for Community Support, 2003‏ </li></ul></ul>Board concentrates on planning, oversight, fundraising Maturity Board leads process of renewal or dissolution Review and Renew/Decline Staff implements day-to-day activities; board transitions to oversight Governing Board Growth Hands-on, fills role of staff Organizing Board Idea/Start-up Board Characteristics Board Stage Organization Life Stage
    18. 18. Board Composition <ul><li>Composition Analysis – (Non-appointed trustees) </li></ul><ul><ul><li>Consider the organization’s upcoming goals </li></ul></ul><ul><ul><li>Seek proper balance of skills, age, ethnicity, geography, gender, political affiliation, and constituent representation </li></ul></ul><ul><li>Ongoing Considerations </li></ul><ul><ul><li>Required officers: What are our needs? Succession Planning? </li></ul></ul><ul><ul><li>Size of the board: 9 – 15 according to best practices </li></ul></ul><ul><ul><li>Terms and term limits: Best practice 3 years – 2 terms </li></ul></ul>
    19. 19. Recruitment and Education <ul><li>Recruitment </li></ul><ul><ul><li>Analyze current board composition </li></ul></ul><ul><ul><li>Identify and cultivate candidates </li></ul></ul><ul><ul><li>Elect, orient, and engage new members </li></ul></ul><ul><li>Education </li></ul><ul><ul><li>Reports on program and mission achievement </li></ul></ul><ul><ul><li>External education on board roles and trends </li></ul></ul><ul><ul><li>“ How-to” topics </li></ul></ul><ul><ul><ul><li>Fundraising, reading financials, etc. </li></ul></ul></ul><ul><li>Conduct regular board assessments to determine both dynamics and performance </li></ul>
    20. 20. Effective Meetings <ul><li>Frequency </li></ul><ul><ul><li>Minimum of 3 per year </li></ul></ul><ul><li>Efficiency </li></ul><ul><ul><li>Follow agenda; use consent agendas and other techniques to honor volunteers’ time </li></ul></ul><ul><li>Attendance </li></ul><ul><ul><li>What do your bylaws say? What is your culture? What do you want the culture to be? </li></ul></ul><ul><li>Strong facilitation by Board Chair </li></ul><ul><ul><li>Positive group dynamics – engage all and expect engagement </li></ul></ul><ul><ul><li>Give opportunity for Board to discuss issues </li></ul></ul><ul><ul><li>Celebrate accomplishments </li></ul></ul>
    21. 21. Committees <ul><li>Used to organize the work of the board </li></ul><ul><ul><li>Board should set clear goals, establish follow-up guidelines to ensure each committee serves its purpose </li></ul></ul><ul><li>Common committees </li></ul><ul><ul><li>Executive, Finance, Development, Governance, Programs, Audit </li></ul></ul><ul><li>Consider ad hoc and standing committees </li></ul><ul><ul><li>Non-board members can serve on non-governing committees </li></ul></ul>
    22. 22. Zero Basing Committees <ul><li>Change your bylaws to say: </li></ul><ul><li>“The board will establish, on an annual basis, </li></ul><ul><li>the committees of the board that need to </li></ul><ul><li>exist to meet the mission, strategic plan and </li></ul><ul><li>goals of the organization” </li></ul>
    23. 23. Committees That Work <ul><li>Don’t create board committees that duplicate staff work – standing committees in bylaws don't recognize the fluidity of needs of the board </li></ul><ul><li>Don’t hold committee meetings too close to full board meetings – committees need time to prepare proper reports to be included with board packets </li></ul>
    24. 24. Structures for Committees <ul><li>Committees with a purpose statement and clear goals as established by the board get more done for the organization </li></ul><ul><li>Consider a job description for chair and committee members </li></ul><ul><li>Clear goals from the board on an annual basis </li></ul>
    25. 25. Work of the Board <ul><li>Board Operations </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Resource Development </li></ul><ul><li>Oversight </li></ul><ul><li>Ambassadorship </li></ul>
    26. 26. Why Have a Strategic Plan? <ul><li>Provides organization focus </li></ul><ul><ul><li>Sets priorities </li></ul></ul><ul><ul><li>Provides flexibility </li></ul></ul><ul><ul><li>Helps achieve mission </li></ul></ul><ul><li>Sets path for program and resource development </li></ul><ul><li>Funders ask for it </li></ul>
    27. 27. Strategic Plan Essentials <ul><li>Focus on the mission </li></ul><ul><li>Avoid set rules </li></ul><ul><li>Consider different formats </li></ul><ul><li>Research before beginning </li></ul><ul><li>Complete in big/small chunks </li></ul><ul><li>Include both board and staff input, and consider community input </li></ul><ul><li>MUST BE USABLE </li></ul>
    28. 28. Work of the Board <ul><li>Board Operations </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Resource Development </li></ul><ul><li>Oversight </li></ul><ul><li>Ambassadorship </li></ul>
    29. 29. Physical Resources <ul><li>Facilities </li></ul><ul><li>Office Equipment </li></ul><ul><li>Computers, Web, and other technology </li></ul>
    30. 30. Human Resources <ul><li>Board oversees the Executive Director </li></ul><ul><ul><li>Provides oversight and works in partnership with the Executive Director </li></ul></ul><ul><ul><ul><li>Recruits/hires </li></ul></ul></ul><ul><ul><ul><li>Sets goals </li></ul></ul></ul><ul><ul><ul><li>Delegates tasks and authority to ED </li></ul></ul></ul><ul><ul><ul><li>Evaluates (rewards/coaches/terminates) </li></ul></ul></ul><ul><li>Executive Director manages all other staff </li></ul><ul><ul><li>Paid and volunteer </li></ul></ul>
    31. 31. Financial Resources <ul><li>Board must ensure adequate financial resources (contributions, earned revenue, loans, etc.) </li></ul><ul><ul><li>Usually includes fundraising </li></ul></ul><ul><ul><li>Different approaches to fundraising – board is expected to lead the effort </li></ul></ul><ul><ul><li>Consider diverse funding sources </li></ul></ul><ul><ul><li>Establish broad fundraising policies </li></ul></ul><ul><li>Best practice: 100% participation by board in annual giving </li></ul>
    32. 32. Work of the Board <ul><li>Board Operations </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Resource Development </li></ul><ul><li>Oversight </li></ul><ul><li>Ambassadorship </li></ul>
    33. 33. Program Oversight <ul><li>Approve general program goals that are aligned with mission and strategic plan </li></ul><ul><li>Oversee progress against goals through staff reports </li></ul><ul><li>Avoid micromanagement </li></ul>
    34. 34. Legal Oversight <ul><li>Ensure compliance with external laws… </li></ul><ul><ul><li>Employment law (non-discrimination) </li></ul></ul><ul><ul><li>Tax law (exemptions, political activities, for-profit activities) </li></ul></ul><ul><ul><li>Accreditation, medical regulations, etc. </li></ul></ul><ul><ul><li>Civil and criminal laws in general </li></ul></ul><ul><li>… and internal laws </li></ul><ul><ul><li>Bylaws, articles of incorporation </li></ul></ul><ul><ul><li>Organization and board policies </li></ul></ul>
    35. 35. Financial Oversight <ul><li>Internal accounting controls </li></ul><ul><li>Budgeting </li></ul><ul><ul><li>Staff and Finance Committee generate draft </li></ul></ul><ul><ul><li>Board approves final budget </li></ul></ul><ul><li>Financial review </li></ul><ul><ul><li>Balance sheet </li></ul></ul><ul><ul><li>Income statements </li></ul></ul><ul><ul><li>Cash forecast </li></ul></ul><ul><li>Auditing </li></ul><ul><ul><li>Examination of financial statements to ensure accuracy </li></ul></ul><ul><ul><li>May be requested by funders </li></ul></ul>
    36. 36. Transparency <ul><li>Guidestar Report – Use it to your advantage </li></ul><ul><ul><li>Becomes a marketing tool </li></ul></ul><ul><li>Websites </li></ul><ul><ul><li>Strategic Plan </li></ul></ul><ul><ul><li>990 </li></ul></ul><ul><ul><li>Annual Report </li></ul></ul><ul><ul><li>Board Members’ Names </li></ul></ul><ul><li>Principles for Good Governance and Ethical </li></ul><ul><li>Practices : A Guide for Charities and </li></ul><ul><li>Foundations – Stop Gap Measure for Legislation </li></ul>
    37. 37. Regulatory Activity <ul><li>Federal and state legislative activity demands greater accountability in all sectors </li></ul><ul><li>Sarbanes -Oxley Act of 2002 (SOX) </li></ul><ul><li>Enhanced enforcement by the IRS </li></ul><ul><li>Senate Finance Committee hearings </li></ul><ul><ul><li>Panel on the Nonprofit Sector October 2007 </li></ul></ul><ul><li>State legislative activity </li></ul><ul><ul><li>Including Michigan </li></ul></ul>
    38. 38. Best Practices <ul><li>IRS, Watch Dog Orgs, Independent Sector & Most Funders Want: </li></ul><ul><ul><li>Policy – Board reviews the 990 before it's filed </li></ul></ul><ul><ul><li>Whistle blower policies </li></ul></ul><ul><ul><li>Code of ethics </li></ul></ul><ul><ul><ul><li>Conflict of interest policy </li></ul></ul></ul><ul><ul><ul><li>Restriction against loans to executive </li></ul></ul></ul><ul><ul><li>Audit requirements </li></ul></ul><ul><ul><ul><li>Independent audit committee </li></ul></ul></ul><ul><ul><ul><li>Auditor rotation </li></ul></ul></ul><ul><ul><ul><li>Full board approval of audit </li></ul></ul></ul>
    39. 39. New IRS Form 990 <ul><li>Asks for: </li></ul><ul><ul><li>Whistle Blower Policy </li></ul></ul><ul><ul><li>Restriction Against Loans for Executives </li></ul></ul><ul><ul><li>Code of Ethics </li></ul></ul><ul><ul><li>Conflict of Interest Policy </li></ul></ul><ul><ul><li>Document Retention Policy </li></ul></ul><ul><ul><li>Audit Standards </li></ul></ul><ul><ul><li>List of top programs/services related to executing mission and the expenses related to run those programs/services </li></ul></ul><ul><ul><li>Compensation level of top paid staff </li></ul></ul>
    40. 40. Work of the Board <ul><li>Board Operations </li></ul><ul><li>Strategic Planning </li></ul><ul><li>Resource Development </li></ul><ul><li>Oversight </li></ul><ul><li>Ambassadorship </li></ul>
    41. 41. Ambassadorship <ul><li>Ensure that board speaks as a unit </li></ul><ul><li>Advocate for the organization and its mission </li></ul><ul><li>Designate an authorized spokesperson in advance of crisis </li></ul><ul><li>Support marketing and communication plan </li></ul>
    42. 42. Parting Comment <ul><li>Board members who recognize that </li></ul><ul><li>everything in life is about relationships and </li></ul><ul><li>who are strong ambassadors for your </li></ul><ul><li>nonprofit are the best board members! </li></ul>
    43. 43. BoardConnect ® Services
    44. 44. Thank You For Participating! <ul><li>Contact Diana Kern at 734.998.0160 ext. 230 </li></ul><ul><li>or visit </li></ul><ul><li> </li></ul><ul><li>for general nonprofit resources </li></ul><ul><li>for BoardConnect information </li></ul>