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BoardSource Overview
- 1. Nonprofit Board Service: Being an Effective Board Member Presented & Facilitated by: David Styers Senior Governance Consultant – BoardSource 202-204-8010 dstyers@boardsource.org © 2009. Not to be distributed or reproduced without the express permission of BoardSource.
- 2. About BoardSource • Enables organizations to fulfill their missions by helping them build effective boards • Resource for practical information, tools, best practices, training, and leadership development for board members of nonprofit organizations • Formerly the National Center for Nonprofit Boards
- 3. What is a Nonprofit? • An organization very similar to a for-profit: Choose a legal form Has a Board of Directors and Officers Pays salaries Has similar “business” expenses Makes investments Produces goods/services Is able to generate a profit… • The difference is what can be done with the profit: A for-profit generates profit for the owners. A nonprofit generates profit to use for the betterment of its mission and society. (Private Inurement Doctrine)
- 4. Nonprofit Sector Profile - Nationally Approximately 1.5 million organizations – 50,000 new nonprofits each year $7 billion industry – 5.2% of GDP and 8.3% of wages and salaries paid in US – 1 in 10 workers Contributions: $306 billion (2007) 26.2% of Americans volunteered in 2007 through a formal organization
- 5. Primary Board Responsibilities • Build a competent board Set Organizational Direction Provide Oversight • Determine mission and purpose • Monitor and strengthen • Ensure effective planning programs and services • Protect assets and provide financial Ensure the Necessary Resources oversight • Ensure adequate resources • Ensure legal and ethical • Select the chief executive integrity • Support and evaluate • Enhance the organization’s public the chief executive standing
- 6. Board Members’ Legal Obligations • Duty of Care – Using your best judgment – Actively participating, paying attention – Asking pertinent questions • Duty of Loyalty – Avoiding conflicts of interest – Putting aside personal and professional interests • Duty of Obedience – Staying true to the organization’s mission – Obeying the law, both public and organizational
- 7. Board Responsibilities: Newer Thinking • Build a strong Chief Executive/Board relationship • Develop a high level of trust • Focus on what matters most • Deliberate differently • Evaluate performance
- 8. It was great… Thank you! Let us know how BoardSource can help you and your board! BoardSource 750 9th St NW Ste 650 Washington, DC 20001 Phone: 202-349-2500 Fax: 202-349-2599 www.boardsource.org
Editor's Notes
- 9:00 – 9:01 (1 minute) WRITE UP for introductions, find out if they have a board placement program and how many serve on nonprofit board Thank you for the invitation to speak with you this evening. It is truly a pleasure to be able to talk with you about the powerful role you and your colleagues can play as nonprofit board members in Montgomery County.
- 9:01 – 9:02 (1 minute) Present the information on the slide in an interactive manner and facilitate discussion. BoardSource is dedicated to increasing the effectiveness of nonprofit organizations by strengthening boards of directors through consulting, training, publications, and membership. And although we do believe that if you’ve seen one board, you’ve seen one board, our research and experiences lead us to highlight which practices tend to build effective nonprofit boards. 20 th anniversary year 2008 We’ve worked with several major companies, including Target and Time Warner, on their employee board matching programs NGO Global
- 9:04 – 9:06 (2 minutes) Thus, unlike for-profits, nonprofits are tax exempt on their related business income
- 9:06 – 9:08 (2 minutes) Facts and Figures from the Nonprofit Almanac 2007, National Center for Charitable Statistics at the Urban Institute, Giving USA, and Bureau of Labor Statistics) Shortage of viable board members a year – 1 million or more Average 16 board members per organization, need 24 million board members Just over a quarter of Americans formally volunteer – are they counting board service? – Decrease of almost 2.5% over two years prior 80% of budgets less than $1 million
- 9:48-9:52 (4 minutes) Boards have responsibilities as a whole and as individuals. Review slide content in an interactive manner. Ensure audience understands these are the fundamental responsibilities.
- 9:52-9:55 (3 minutes) Individual board members have three Legal Obligations Duty of Care means using your best judgment. It doesn't mean you have to be perfect or that you cannot make a mistake, just that you have exercised reasonable caution in making decisions. How do you do that as a trustee? Ask good questions, attend meetings, participate in discussions, learn about the school's programs, read materials. Duty of Loyalty means putting your personal and professional interests aside for the good of the school. Having a conflict of interest policy in place would be one way to exercise duty of loyalty. Also, leaving aside personal agendas. Duty of Obedience means being true to the school's mission. Using funds for the purposes for which the organization was established, not for a completely different purpose. Donors, students and their families, the community have a right to expect that the funds given will be used for the stated purpose. It is also important that the board ensure that the school follows all laws and regulations that may apply to a nonprofit organization, such as payments of any taxes and public disclosure of information.
- (3 minutes) Building a highly effective board is like building a highly effective team – it takes time, leadership, having the right people on the bus (Jim Collins), high level of trust. The sum of its work is greater than the parts. Need to be attentive to relationships. Clarity about how decision making will occur. Does everyone at the board table have the same information? is it the right information? Consent agenda. Dashboards. Ask the right questions. Deliberate differently. The board manages 2 things and only 2 things: the Chief Executive and the board itself. Be sure to evaluate both. BdSource’s on line self assessment tool.
- 9:44 – 9:45 (1 minute) Thank you for caring enough about your board’s work to come to this session. Please complete the session evaluation. Thank you for coming.