Nonprofit Governance Best Practices
The basic principles of good governance haven’t changed much, if at all, in recent decades. Nonprofit boards must remain loyal to the organization’s mission and vision. It’s necessary for nonprofit boards to develop their strategic planning so that it aims to support the long-term sustainability of the organization. There’s a mutually beneficial relationship between a nonprofit’s viability and the public trust in, and support of, their communities. Nonprofits fill in the gaps in social services for communities. In return, communities support nonprofits financially and socially.
What has changed is how nonprofit organizations can use technology to advance their organizations’ missions and support best practices of good governance.
Benefits of Board Portals for Nonprofit Organizations
Nonprofit organizations often operate on limited budgets, primarily using a volunteer workforce. The most innovative nonprofit boards look for ways to stretch their time and budgets, so they can give the most money possible back to the organization. Software solutions like a BoardEffect board portal are an innovative way for nonprofit board directors to save time and money, while also garnering the trust and support of their communities by following best practices for good governance.
Seven Best Practices for Good Governance
While it’s not likely for best practices for good governance to change in major ways, it is likely that how nonprofit boards implement best practices will change as the advancements in technology progress. Here’s a look at best practices for nonprofit governance and how boards can implement technological solutions to help them:
- Job descriptions
Whether nonprofit organizations have term limits or not, best practices for nonprofit boards require boards to have a written description of the duties and responsibilities of board directors and officers. In addition to duties and responsibilities, job descriptions should also include the board’s expectation for people serving in certain capacities. Such expectations may include doing community outreach, attending all meetings, and being committed to honesty, integrity and transparency. Different board members may have different needs, so the expectations of each board member may be different, and boards should highlight those differences in each job description.
Also, it’s important for board members to ask each board member to sign a conflict of interest policy.
A board portal is a good example of how nonprofit boards can streamline policies by storing these important documents online using cloud-based technology.
- Clear expectations for financial giving
Even though board members donate much of their personal time to nonprofit board service, best practices for nonprofits suggest that board directors should demonstrate their commitment to the organization by making regular donations. Some organizations specify how much they expect board directors to give, while others merely suggest a reasonable amount. It’s also acceptable for boards to waive any requirements or recommendations for board member giving for members who aren’t financially able to give, but who offer valuable expertise and large amounts of their time and energy.
It’s best if nonprofits are open and honest about their expectations for board giving to prevent dissension. The best way to do this is to memorialize a policy for board member giving in a board portal where all members can access it when they need it.
Board director nominees likely know much about a nonprofit with which they’d like to be involved. A formal orientation helps them learn even more about the history and accomplishments of the organization. An orientation should include sharing any recent changes or problems within the organization.
Board buddies is a mentoring process whereby the board matches up all new board members with a veteran board member who helps them integrate comfortably onto the board. A mentor calls new board members to remind them about meetings, asks if they have questions and, in some cases, helps to acclimate them to parliamentary procedure. Mentors can be instrumental in helping new board members discover their talents and how they can use them to support the nonprofit.
The orientation process should include providing an overview of the board handbook. Review the mission, vision, values and purpose. Provide copies of the last several financial statements, agendas and meeting minutes. New members should have a copy of all pertinent contacts, a calendar of events and marketing materials.
Nonprofit boards should have a written policy that outlines the orientation process, which they should store in a board portal or with other important documents for the organization.
- Board Development
There are a couple of ways that boards can pursue board development. They can set up a committee that finds opportunities for classes and workshops and shares them with the board. Another option is for a person with governance expertise to make a short presentation on governance at each meeting. A board portal is a good central space for storing articles and documents on various nonprofit and governance issues.
- Board Self-Assessment
It’s not required for nonprofit organizations to perform annual board-self assessments. However, since nonprofits are largely self-governing, the board self-assessment process brings much value. Just as the board conducts an annual review of the Executive Director, they should arrange for an annual review of the board’s performance. An annual review of board performance examines whether the board holds too many or too few meetings, whether board members arrive at meetings well-prepared, whether certain members need additional training in a specific area and more.
A board portal offers a secure platform for conducting online surveys and establishing questions for board member interviews and group discussions about self-evaluation.
- External Counsel
Nonprofit boards typically watch their budgets closely. Certain situations may call for the need to seek outside counsel or professional expertise, such as accounting or legal expertise, to mitigate organizational risk. Such advice can be timely and is usually a prudent use of funds.
A board portal stores board agendas and minutes, which will reflect how and why boards sought outside professional services, which helps to support their fiduciary duties. This can be important information to share with donors and philanthropists.
- Strong Agendas and Meeting Facilitation
A good meeting is an interesting meeting where everyone has a chance to ask questions and to learn new things. Clear agendas and an experienced board chair contribute to well-run meetings. Board chairs who archive agendas in an electronic board portal can easily retrieve them to conduct an annual review of the board’s progress.
Good board dynamics are a cornerstone of nonprofit governance. Software solutions, such as a board portal by BoardEffect that’s specifically designed with nonprofit organizations in mind, helps boards to streamline many of their manual and routine processes, so they can focus more heavily on fundraising and on supporting the organization’s mission.