Best Practices of High Performing Nonprofit Boards

Prepared for:

Association of Fundraising Professionals

Nonprofit Board Best Practices

Peter Drucker suggests all nonprofit boards remind themselves:“Membership on this board is not power, it is responsibility . . . Board membership means responsibility not just to the organization but to the board itself, to the staff, and to the institution’s mission.”

Nonprofit Board Best Practices

To whom is the board responsible? What are the board’s

responsibilities? What qualities are needed on a

high-performing nonprofit board? How does an effective board

operate? How does a board assess its value?

Nonprofit Board Best Practices

To whom is the board legally responsible?

Who determines what is in the public’s interest?

Nonprofit Board Best Practices

What are the board’s responsibilities? The organization’s mission Ensuring, developing and conserving

the organization’s resources Management oversight and

organization assessment Outreach - a bridge and buffer between

organization and its stakeholders

Nonprofit Board Best Practices

What qualities make up a high performing nonprofit board? Wisdom Work Wealth

Nonprofit Board Best Practices

Wisdom Knowledge of mission Knowledge of organization’s value to

the larger community Perspective reached through

experience with similar organizations and issues

Nonprofit Board Best Practices

Work Motivation to apply oneself to the tasks

required to achieve the mission Skills needed to competently complete

the tasks required to achieve the mission

Nonprofit Board Best Practices

Wealth Ability to give or get money for the

organization’s mission Motivation to give or get money for the

organization’s mission

Nonprofit Board Best Practices

Essentials for Effective Boards: Climate of trust and candor Good meeting management practices Recognition of Chief Executive’s role Documentation of board’s and board member’s

roles and responsibilities Pays attention to talent needs and composition Encourages its own development Assesses its own effectiveness

Nonprofit Board Best Practices

Assesses its own effectiveness: Why does board matter beyond its legal and

symbolic functions? What is working well? What needs attention or improvement? What performance measures demonstrate

improved board performance or effectiveness? What can we do to improve the board’s

performance and effectiveness?

Nonprofit Board Best Practices

Essentials for Effective Boards: Climate of trust and candor Good meeting management practices Recognition of Chief Executive’s role Documentation of board’s and board member’s

roles and responsibilities Pays attention to talent needs and composition Encourages its own development Assesses its own effectiveness Prepares its staff and volunteer leaders for

their roles

Nonprofit Board Best Practices

Summary: Nonprofit boards are responsible to:

________________________________ Nonprofit boards are responsible for:

________________________________________________________________________________________________________________________________

Boards should be made up of people with:________________________________________________________________________________________________

Nonprofit Board Best Practices

Summary—Essential Practices of Effective Boards (cont’d.): Climate of trust and candor Good meeting management practices Recognize chief exec’s role Know board and board member’s roles and

responsibilities Attentive to talent needs and board

composition Encourage their own effectiveness Prepare staff & volunteer leaders for their roles

Nonprofit Board Best Practices

Peter Drucker suggests all nonprofit boards remind themselves:“Membership on this board is not power, it is responsibility . . . Board membership means responsibility not just to the organization but to the board itself, to the staff, and to the institution’s mission.”

Board Assessment from Nonprofit Best Practices

FunctionGood/No Problem

Could Be Better

1. Define and advance the organization’s mission, and regularly evaluate the organization’s programs and activities within the context of its mission.

2. Ensure that adequate financial resources are secured to support the organization.

3. Ensure that the organization’s current revenues are stable, and encourage the cultivation of sources of revenue that are sustainable for the long term.

4. Provide financial oversight by ensuring that income is managed properly and that financial statements are accurate, intelligible, comprehensive, and timely to reflect the true financial condition of the organization and key financial transactions.

5. Select, support, develop and regularly review the performance of the chief executive officer consistent with the prior expressed expectations articulated by the board.

6. Ensure effective organizational planning by participating with the staff in an on-going overall planning process that produces clear, measurable and attainable goals for the organization.

7. Monitor the organization’s performance and its progress against the established goals.8. Recruit, orient and develop a board of directors that seeks to contribute to the organization’s mission beyond its legal and symbolic purposes, and is willing to evaluate its own performance.9. Enhance the organization’s public standing through its transparency, integrity and accountability.10. Engage in public outreach on behalf of the organization by interpreting the needs of the community to the organization, promoting the needs and services of the organization to its stakeholders, and promoting the organization to donors and potential donors.

Individual Board Member Self Assessment

Work & WisdomAvailable

PointsPoints Comments

1. Meeting attendance (1 pt./meeting) 6

2. Participation in/attendance at XYZ activities, i.e. Annual Dinner, new program launch, etc. (1 pt./activity) Unlimited

3. Serve on and actively engage in the deliberations and activities of a XYZ working committee (1 pt./committee) Unlimited

4. Chair a XYZ committee or special initiative(2 pts./leadership activity) Unlimited

Wealth

5. Personal or company gift to XYZ (2 pts./$1,000 given) Unlimited

6. Assistance with setting up or making a development call with XYZ staff (1 pt./call) Unlimited

7. Contribution to XYZ as a result of board members assistance (2 pts./$1,000 given) Unlimited

8. Provide in-kind Professional Services (1 pt./service provided) Unlimited

TotalPoints

Individual Board Member Self Assessment

Establish a point system to annually evaluate individual board member’s level of engagement.

Each member is to complete the self-evaluation before each cycle of the Governance/Nominating Committee activity.

Completion and submission of the self-evaluation is required in order to remain a member in good standing of the board.

The Nominating Committee Chairman will review the self-evaluations and talk with any members who have not obtained at least X points during the previous year to determine if the individual wants to continue serving on the Board.

Board members are encouraged to obtain at least X performance points in line with the evaluation criteria.

Board members earning X points or more more will be recognized annually. Anticipating extraordinary personal or professional circumstances, a

member may request “in-active status” in writing and be excused from the expectations outlined.

The Nominating Committee should annually review the expectations and system and make adjustments, as required.

Individual Board Member Self Assessment

Work & WisdomAvailable

PointsAverage Mean

1. Meeting attendance (1 pt./meeting) 6 3.8 3

2. Participation in/attendance at XYZ activities, i.e. Annual Dinner, new program launch etc. (1 pt./activity) Unlimited 2.5 3

3. Serve on and actively engage in the deliberations and activities of a XYZ working committee (1 pt./committee) Unlimited 2 2

4. Chair a XYZ committee or special initiative(2 pts./leadership activity) Unlimited 2.7 0

Wealth

5. Personal or company gift to XYZ (2 pts./$1,000 given) Unlimited 5 3

6. Assistance with setting up or making a development call with XYZ staff (1 pt./call) Unlimited 3 2

7. Contribution to XYZ as a result of board members assistance (2 pts./$1,000 given) Unlimited 1.8 0

8. Provide in-kind Professional Services (1 pt./service provided) Unlimited 1.5 1

TotalPoints

22.3 14

Nonprofit Board Best Practices

Assesses its own effectiveness: Why does board matter beyond its legal and

symbolic functions? What is working well? What needs attention or improvement? What performance measures demonstrate

improved board performance or effectiveness? What can we do to improve the board’s

performance and effectiveness?

Nonprofit Board Best Practices

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