Understanding the Type of Nonprofit Board You Need
One consistent element of impactful and resilient nonprofit organizations is an effective board. Yet time and time again I see organizations struggling with board effectiveness – a challenge that can make or break an organization.
Board management can be one of the most challenging aspects of nonprofit organizations. Board members are essentially volunteers, giving their time and resources to support the mission of the organization. However, this volunteer role is unique because the decisions made by the board have some of the greatest impacts (positive and negative) on the organization.
The cost of an ineffective board is staggering: organizations with disengaged boards are more likely to face financial crises, struggle with leadership transitions, and ultimately fail to fulfill their mission. Whenever I'm called upon to support a nonprofit board that is disorganized or ineffective, I often go back to "the basics.” Understanding the role of a nonprofit board enables you to build the best board for your organization.
Duties of All Nonprofit Boards
Governance and strategic planning. The board is responsible for making sure the organization's work is aligned with a mission and leading to a defined vision. This is one of the most significant differences between a for-profit and nonprofit – which at times may need to be articulated when you have board members who are not familiar with nonprofit operations. The board knows what sets the organization apart from similar organizations and leverages this value proposition to identify a strategic path forward.
Management oversight. The board is responsible for ensuring the organization's programs and activities are effectively serving the mission. They provide risk oversight and ensure sufficient resources for program management and operations. The board is responsible for hiring and evaluating the Executive Director.
Financial stewardship and sustainability. To support organizational income, all board members should be actively engaging in fundraising activities. They can do this by making personal donations, creating connections for major gifts within their personal and professional networks, or organizing fundraising events. The board also has a responsibility of ensuring the organization is ethically and responsibly using the funds it receives. This means all board members are responsible for reviewing the budget. They must be able to understand, and occasionally challenge, how the organization's funds are being utilized. Too often I see organizations get into strained financial situations due to a lack of oversight of the budget, despite receiving monthly reports showing the decline.
Types of Boards & What They Need
The three duties above are the general responsibilities of boards; the type of board you have, or need, will determine how they fulfill those duties. Here's where many organizations get stuck – they're trying to force the wrong board type for their current needs.
Managing or Working Board
This type of board plays an active role in managing the work of the organization. They may have no staff, a few part-time staff, or one full-time staff that facilitate the work that needs to happen. When you consider what to do strategically, you must consider the fact that board members are volunteers which impacts the amount of effort or time you can realistically put into your ideas. These boards need people who have time, space, resources, and energy to do. These boards will function best with effective committees that guide the work of an organization function (i.e., communications, programs, or development).
Top Needs of a Working Board:
Alignment about organization's purpose and its activities or programs
Community engagement practices
Committees with a specific focus and expectations
Active, engaged, and willing board members
Fundraising Board
While all boards engage in fundraising, for some organizations, the board's primary focus is raising funds to fulfill the organization's mission. I've most encountered these types of boards in organizations that need large budgets to do their work. These board members are local bankers, institutional faculty, and executives of prominent businesses. They commit to bringing in major donations and developing new streams of revenue, while providing critical oversight over expenses. Another common activity I see in organizations with fundraising boards is a junior board. These often serve as a pipeline for future board members. The junior board receives mentorship from other board members and receives training and support to develop skills in nonprofit fundraising. I've worked with at least 2 organizations in the last year that are looking to shift to a fundraising board to support organization sustainability and I’m sure many more will do the same given the current state of federal funding.
Top Needs of a Fundraising Board:
Relevant data on community impact and targets
Members with networks and connections to major donors
A prominent status or relationships with businesses and community wealth
Experience raising funds
Governing Board
This is the most common board I encounter working with nonprofits. A governing board will primarily focus on the direction, strategy, and oversight. Typically, an organization will have a governing board when there are many staff to fulfill the day-to-day duties so the board does not have to "be in the weeds" of daily operations or personnel issues.
Top Needs of a Governing Board:
Board members who are Mission & Vision advocates
A strategic plan with progress oversight
Awareness or training on Nonprofits
An effective board meeting structure
Clear expectations of how to engage
Advisory Board
An advisory board serves as a group to provide guidance and recommendations to the organization. This differs from the other boards as they are not responsible for governance or management. Advisory boards are often used to preserve relationships by retaining previous board members or highly engaged volunteers. They may also be utilized to gain critical insight around a topic or perspective (i.e., a public housing resident council or a government sanctioned advisory commission).
Top Needs of an Advisory Board:
Clear purpose of the board (what type of advising are they doing?)
Time and preparation before engagement
A relationship to the purpose
Diversity
Disengaged Boards
A disengaged board is one where members do not consistently attend meetings or events, do not fulfill their fundraising duties, and are unable to share general information about the organization and its work. This is a crisis that demands immediate attention – I've seen too many organizations with incredible missions fail because their boards couldn't step up when it mattered most.
It's not uncommon to find unengaged boards or board members. When I encounter a disengaged board, I first try to understand what has caused them to become disengaged. Sometimes they have rockstar staff that are able to get a lot of work done and take the lead on direction, allowing the board to "sit back and relax" (until that staff leave). Sometimes the board has ineffective leadership that does not hold board members accountable or is unable to facilitate effective meetings and board initiatives. Sometimes you have the wrong people because they no longer have the capacity to be a board member. Maybe you need a fundraising board but you don't have anyone with experience in fund development on your board or on staff, so the board is not sure what to do. These are some of the common reasons but there can be other reasons – what matters most is acknowledging if the board is disengaged, becoming clear about what type of board you need, and working with your board to figure out what support they may need to get there.
Needs of a Disengaged Board:
Refocus and alignment on organization's mission and primary programs/activities
A board matrix for targeted board recruitment
Champions on the board to steward, advocate, and push for change
The difference between a thriving nonprofit and one that struggles can often come down to board effectiveness. Organizations with engaged, properly structured boards raise more funds, have stronger community relationships, and achieve greater program impact. If you're reading this and thinking, "This sounds like my organization," you're not alone – and you don't have to figure it out on your own. Board transformation is possible, but it requires the right strategy, tools, and sometimes an outside perspective to break through longstanding patterns.
Ready to transform your board from a source of frustration into your organization's greatest asset? I've helped dozens of nonprofits identify their ideal board type and implement systems that actually work. I’ll be sharing a series of insights and tools over the next few months to take and apply to your own board.
Want to discuss your specific board challenges? Let's schedule a conversation about how we can get your board working for – not against – your mission.