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Best Practices of Governance for Nonprofit Boards

Best Practices of Governance for Nonprofit Boards

Minimize risk of abuse while ensuring that your organization operates as fairly and effectively as possible.

Legal Requirements

Legally, each board member is required to meet specific standards of conduct. These are often broken up into three categories:

  1. Duty of Obedience. Board members must be faithful to their organization’s mission. They must not act in any way that is inconsistent with the goal of their organization.
  1. Duty of Care. Board members must always exercise “reasonable care” when making decisions on behalf of the organization. Here, “reasonable” is synonymous with prudent.
  1. Duty of Loyalty. The information gained through a board member’s position must never be used for personal gain. All efforts taken based upon information acquired through their position must first and foremost work for the benefit of the organization.

Good Governance Practices

While not required, these guidelines can help you keep in the clear on the above requirements while maximizing the effectiveness of your efforts and keeping everyone on the same page moving forward together.

While many best practices are not legally required, adopting specific codes of conduct regarding ethics, transparency, and prudency can help you earn the trust of donors, volunteers, and other partners.

Adapting these and other policies is both a strategic means to accomplish your goals as well as a statement to your supporters that you can be trusted beyond just good faith. It is a deliberate demonstration that your organization deserves the public trust and is serious in achieving its mission.

The New York City Office of the Mayor authored a white paper that outlines a few foundational best practices to be adapted by nonprofits for board development.

  • Create a strategic plan: Identify your long term goals and perform board member self-assessments to gauge if the board has the necessary skills to reach those goals. If you find you are lacking in any of the needed skills, you know what to look for in new board members.
  • Assemble a board development committee
    • Evaluate board member skills and expertise.
    • Establish skill level goals for different board members and the training needed to achieve them.
    • Identify opportunities for workshops and training programs and build time into the board calendar for educational opportunities.
  • Establish a 100% board contribution policy
    • Craft a formal policy outlining the minimum that board members are required to contribute.
    • Make time for formal discussion on the board agenda.
    • Discussion may also include board meeting attendance, meeting participation, committee expectations, or other relevant non-financial criteria.
  • Educate board members as to what type of new members they are recruiting for
    • Viable board candidates can be identified through established:
      • Networks
      • Volunteers
      • Donors
      • Community leaders
      • Business leaders
  • Make certain that all financial reporting is meaningful to the board
    • All board members should understand how to properly read financial reports, and if they do not, they should be trained to do so.
    • Provide board members with opportunities for conferences, workshops, professional mentoring, and chances to expand their network to better fulfill their role on the board.
  • Send minutes and reports to board members at least a full week before board meetings
    • Providing ample time for board members read the minutes ahead of time keeps everything moving faster in meetings without delay, so you can get straight to the pertinent items.
    • When routine agenda items begin to become lengthy, consider a consent agenda.
    • Require board members to provide detailed reports ahead of time, providing all members time to review the information before the meeting begins.
    • Matters that require research should be delegated to committees.

Training Resources

  • Board Source provides an electronic library of different nonprofit governance practices for your nonprofit to reference.
  • Jacobson Jarvis & Co provides occasional webinars, seminars and educational Q&A sessions in addition to consulting services for:
    • Charities
    • Foundations
    • Educational organizations
    • Church and religious organizations
    • Social clubs
  • Seattle Works consistently provides educational workshops to the Seattle area focusing on
    • Nonprofit leadership: Overview of the nonprofit sector as well as how board volunteers are able to influence and affect organizational policy and culture to create more effective nonprofits.
    • Nonprofit and public boards: Overview of nonprofit governance, touching on the roles and responsibilities of different board members.
    • Fundraising: Overview of nonprofit fundraising strategies and the role that board members play in raising funds.
    • Financial and legal responsibilities: How boards manage the financial and legal aspects of their nonprofit with a focus on understanding the oversight process.
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