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Board Enlightenment: Getting the Board You Want and Need Mary Beth Harrington August 12, 2014.

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Presentation on theme: "Board Enlightenment: Getting the Board You Want and Need Mary Beth Harrington August 12, 2014."— Presentation transcript:

1 Board Enlightenment: Getting the Board You Want and Need Mary Beth Harrington August 12, 2014

2 Biography 10 years corporate marketing, public relations, advertising (psychiatric hospitals, DFW Tourism) Carter BloodCare, Marketing Director Dallas Zoo, Graphics Specialist Dallas Public Library, Volunteer Coordinator Volunteer Center of North Texas – Agency Relations Director Austin Public Library Foundation – Executive Director TANO – Community Outreach Director San Antonio Area Foundation – Curriculum Development Director 501c³ - Taking Nonprofits to the Third Power - President 501c³ - Taking Nonprofits to the Third Power 2

3 501c³ - Taking Nonprofits to the Third Power A few of our clients…. Texas Habitat US Tennis Association (USTA) Meals on Wheels of North Texas Texas Association of Museums Habitat for Humanity Texas Keep Texas Beautiful Literacy Texas Texas Library Association 501c³ - Taking Nonprofits to the Third Power 3

4 Board Development Education Enlightenment Empowerment Intervention 501c³ - Taking Nonprofits to the Third Power 4

5 Sources for Session Information Office of Attorney General of Texas Secretary of State of Texas BoardSource Internal Revenue Service 501c³ - Taking Nonprofits to the Third Power 5

6 Today’s Agenda Responsibility of Governance Fiduciary Responsibilities Responsibility of Board Management Responsibility of Board Recruitment Responsibility of Financial Sustainability and Advocacy Brave New World Responsibility of Evaluation 501c³ - Taking Nonprofits to the Third Power 6

7 Envisioning Exercise Why are you on the board of Habitat for Humanity ? What does Habitat for Humanity mean to you personally? What do you wish to gain personally from your time as a board member? How can you best serve Habitat for Humanity as a Board Member? What are you willing to do to see Habitat for Humanity succeed? Where do you see Habitat for Humanity as an organization in 2024? 501c³ - Taking Nonprofits to the Third Power 7

8 Pivotal Point 501c³ - Taking Nonprofits to the Third Power 8

9 Story Time! Man who walked this earth over 2000 years ago. In a short amount of time, he changed the world However, would his mission succeeded without his followers? “And he said unto them, Go ye into all the world, and preach the gospel to every creature”. This is how a movement starts….what is your role? Will your role be to…. Stay the course Allow for change to happen Plan for change 501c³ - Taking Nonprofits to the Third Power 9

10 Attributes of an Effective Nonprofit Board Commitment to the mission of the organization. Understanding of the board’s governance roles. Active involvement in board activities, committees. Thinking and acting strategically; not involved in day- to-day management of the organization. Abiding by the Duties of Care, Loyalty and Honesty. Supporting the organization both financially and through advocacy. 501c³ - Taking Nonprofits to the Third Power 10

11 Responsibility of Governance

12 Strategic Direction The Board has Ultimate Responsibility for Setting the Organization’s Strategic Direction. Annual planning retreat. Strategic plan is kept alive. Progress reports at every Board meeting. 501c³ - Taking Nonprofits to the Third Power 12

13 Governance The Board has Ultimate Responsibility for the Effective and Efficient Governance of the Organization. Policies and procedures for board operation. Bylaws Oversight (finances, planning, etc.) Training (orientation) 501c³ - Taking Nonprofits to the Third Power 13

14 Mission and Purpose The Board has Ultimate Responsibility for Ensuring the Organization Operates to Serve its Mission and Purpose. Mission-driven decision making. Mission printed on all board and committee agendas. Organizational culture prevents mission- drift. 501c³ - Taking Nonprofits to the Third Power 14

15 Habitat for Humanity International Mission Seeking to put God’s love into action, Habitat for Humanity brings people together to build homes, communities and hope 501c³ - Taking Nonprofits to the Third Power 15

16 Evolution of Board’s Role Then Nonprofits should be run like a business Manage day to day operations Sage advisors of best practices Now Sophistication of the nonprofit work force Board emphasis on strategy, sustainability, advocacy Big picture outlook 501c³ - Taking Nonprofits to the Third Power 16

17 For Profit vs. Nonprofit 501c³ - Taking Nonprofits to the Third Power 17

18 Nonprofit Resources 501c³ - Taking Nonprofits to the Third Power 18

19 Best Practices Support Averages, Surveys 501c³ - Taking Nonprofits to the Third Power 19

20 Roles and Responsibilities Board Members – Works as a team to support the mission of the organization and creates the vision for the organization’s future. Board Chair – Acts as liaison between the Board Members and the Executive Director as well as the Board Members and each other. Executive Director – Acts as a liaison between the Board and the Staff and handles day to day operations for the organization. See Section 6.02(d) 501c³ - Taking Nonprofits to the Third Power 20

21 Fiduciary Responsibilities

22 Duty of Care “Board members must act as an ordinarily prudent person would act under similar circumstances.” Translation: Board members must come to meetings prepared. The Board speaks with one voice and respects the wishes of the majority. 501c³ - Taking Nonprofits to the Third Power 22

23 Duty of Loyalty Board members must put the interests of the organization above their own. Translation: The Board has a conflict of interest policy and consistently enforces it. 501c³ - Taking Nonprofits to the Third Power 23

24 Duty of Honesty Board members must act in accordance with the organization’s stated mission and applicable laws. Translation: The Board follows the bylaws, ensures timely and accurate filing to regulatory bodies, reviews the Form 990 before it is filed, etc. 501c³ - Taking Nonprofits to the Third Power 24

25 Sarbanes-Oxley Adopted in 2002 for publicly-held corporations. Financial Transparency Conflict of Interest Many recommendations adopted in newly revised IRS Form c³ - Taking Nonprofits to the Third Power 25

26 IRS 990 First section of 990 is all about Governance! Huge implications for nonprofit governance. Transparency is a public document Recommended – post on organization website as well as GuideStar, Charity Navigator…. Perceptions and Implications of Disclosures. Conflict of Interest – Relationships Board members and their contact information listed on website The Board should review and discuss in detail. 501c³ - Taking Nonprofits to the Third Power 26

27 Policy “Musts” Conflict of Interest Policy Whistleblower Policy Document Destruction Policy Director’s & Officers Insurance 501c³ - Taking Nonprofits to the Third Power 27

28 Responsibility of Board Management

29 Board Orientation Required for New Board Members Governance and fiduciary duties. Budget and financials (Form 990). Strategic plan. Board Member job descriptions Commitment letter. Mission, vision and core values. Policies and procedures. Conflict of interest. Connections! Networks! c³ - Taking Nonprofits to the Third Power

30 30 Habitat Your Contacts Another Board Member’s Contacts

31 Hold Effective Board Meetings Board Chair leads the meetings Board responsible for board documents and sends agenda, minutes, financials, reports prior to meeting. Use Consent Agenda Delegate committee work to committees. Use Robert’s Rules. Stick to the agenda. Begin and end on time! Executive session at each meeting! 501c³ - Taking Nonprofits to the Third Power 31

32 Annual Planning Retreat Review mission, vision, core values every 3- 5 years. Assess current strategic plan. Long term vision - 12 month plan of work. Focus forward, build consensus. Develop action plans with accountability and time lines for achievement. Team building and fun! 501c³ - Taking Nonprofits to the Third Power 32

33 Establish Effective Committees What is required to achieve the annual plan of work? Committees do the day to day work and report to Board via Committee Chair (Board Member) Action plans shared with full Board. Assess progress at every meeting. Sunsets. How will you use to select committee members? Executive Committee 501c³ - Taking Nonprofits to the Third Power 33

34 Board Tenure Term Limits. Term Limits. Term Limits. New blood, ideas, connections, $$$’s Remove deadwood Hold board members accountable Average tenure is 3 years, renewable once. Retire to Advisory or Emeritus Status. 501c³ - Taking Nonprofits to the Third Power 34

35 Advisory Boards Allows board members an place to land at the end of their term Keeps them engaged and committed Create a written description of the advisory board’s responsibilities and the expectations for its members. Assign a liaison from the official board of directors. Commit the time to work with the advisory board so that “advisory board members [don’t] feel ignored or superfluous.” Hold annual meeting, send updates. 501c³ - Taking Nonprofits to the Third Power 35

36 Board Commitment Letter Restate job description. Sign annually. Make financial/or other commitment. Escape clause: I agree that if, at any time, I am unable to fulfill the commitments as a member of the board of directors, I will give notice of my resignation to the president of the board. 501c³ - Taking Nonprofits to the Third Power 36

37 Deal with Unproductive Board Members You get what you accept and what you reward! Term limits. Commitment letters. Keep performance expectations high. 501c³ - Taking Nonprofits to the Third Power 37

38 Responsibility of Board Recruitment

39 Expectations Ensure a Consistent Message About Expectations, Roles and Responsibilities Develop a Recruitment Packet: Time requirements in detail. Talent – serve on Board committees. Treasure – make annual contribution. Other: Roster, annual report, financials, fact sheet, history, accomplishments, etc. 501c³ - Taking Nonprofits to the Third Power 39

40 Ongoing Nominating Committee Tools for the Effective Nominating Committee: Matrix What skills are needed? When are they needed? Who? Brainstorming. Relationship to organization? Plan to recruit. Discussion…what do you need? 501c³ - Taking Nonprofits to the Third Power 40

41 Board Recruitment Matrix Access the current board members based on Skills Contributions Contacts Identify what is missing Is the board diverse based on gender, race, economic means, area of town, others? Does the board reflect the community? Consider a client as a pro bono board member. 501c³ - Taking Nonprofits to the Third Power 41

42 Effective Board Recruitment Recruitment Basic: Time Talent Treasure Every board member contributes some of each attribute. Use LinkedIn Board Connect c³ - Taking Nonprofits to the Third Power 42

43 Responsibility for Financial Sustainability and Advocacy

44 2013 Giving USA Report Charitable giving increased 3.5% Giving by individuals increased by 3.9 % Giving by bequests declined by 7.0% Giving by foundations increased 4.4% Giving by corporations increased 12.2% Giving to religion is largest 32% Giving to education and human services13% Giving to foundations10% Giving to health organizations 9% Giving to arts and cultural organizations 5% 501c³ - Taking Nonprofits to the Third Power 44

45 2013 Giving USA Report Giving by Individuals - 72% Giving by Foundations – 15% Giving by Bequests – 7% Giving by Corporations – 6% 501c³ - Taking Nonprofits to the Third Power 45

46 Effective Fundrai$ing Success Rate Individual Contributions Bequests Grants Corporate donations Special Events* Amount of Staff Time Special Events* Corporate donations Grants Bequests Individual Contributions 501c³ - Taking Nonprofits to the Third Power 46

47 Special Event Fundrai$ers Which of these is the real purpose of a special event? 1) To make as much money as possible! 2) To use the event as a way to market our mission to cultivate potential new donors and if we make a profit, all the better! 501c³ - Taking Nonprofits to the Third Power 47

48 “Friend”raising Board Board members introduce “friends” to Executive Director Board member follows meeting with phone call or note to “Friend”. With permission, “Friend” is added to organization communications. “Friend” is invited for tour of organization to see programs in action. Board member follows tour with phone call or note to “Friend”. “Friend” is invited to call to action event. 501c³ - Taking Nonprofits to the Third Power 48

49 Talk Story Identify four or five supporter types/profiles Have board members call donors and ask: What is it that we do well? How did you get engaged in our cause? Two things emerge: Rebuilds the connection because it reminds them why they care about your organization Identifies what programs people want Use social networks and social media to reach new people! 501c³ - Taking Nonprofits to the Third Power 49

50 501c³ - Taking Nonprofits to the Third Power 50 Habitat Your Contacts Another Board Member’s Contacts

51 Advocate Everyday Once a week tell someone about Habitat Be the “go to” person for information on Habitat Effective board members serve on one board at time Loyalty Faith Based Organization School Habitat 501c³ - Taking Nonprofits to the Third Power 51

52 The Brave New World

53 Strategize for the New Demographics Silent Generation – Involvement because it makes you a better person Baby Boomers – Involvement to see specific impact Millennials (soon to become new participants!) – Involvement to be a part of something, to do something or be with someone. Web 2.0! “How do you entrust your brand to individuals to create community around themselves in the name of your brand?” – Marc Chardon, Former Blackbaud President & CEO downturn.html 501c³ - Taking Nonprofits to the Third Power 53

54 Web 2.0 Engagement Web 1.0 Events We decide the day, time and location, provide the tools, day, set the course, you show up and bring your $$$ - Car Wash Web 2.0 Events You create your own social experience and project our brand through it… - Let’s have a car wash! 501c³ - Taking Nonprofits to the Third Power 54

55 Web 2.0 Web 2.0 – Created by individuals themselves. Positive + They not only donate, but advocate, volunteer, initiate programs and activities. Negative – Short timer, desire full responsibility, know everything. 501c³ - Taking Nonprofits to the Third Power 55

56 Responsibility of Evaluation

57 Leadership Evaluation Daring to Lead study indicated, that of those surveyed 67% of nonprofit executives anticipate leaving their positions within five years. 501c³ - Taking Nonprofits to the Third Power 57

58 Executive Evaluation Assign a board committee to manage Executive Director (ED) evaluation. Have ED review the process and instrument(s) prior to the start. Collect evaluation from all board members rather than compile an "average," report actual responses. Host a special executive session of the board to discuss the survey results and comments in general with the ED. Allow ED to respond (in person or in writing) to the full board and response is placed in the executive's personnel file. 501c³ - Taking Nonprofits to the Third Power 58

59 Chief Executive Succession Planning Begin the succession planning process as soon as a new chief executive joins your organization Create a system that ensures the organization always has an up-to-date succession strategy Identify five succession planning steps to take prior to the executive search Identify six key issues for the board to address during the executive search 501c³ - Taking Nonprofits to the Third Power 59

60 Board Bless and Release Misrepresenting the organization, by saying negative things about the executive director, staff, or other board members to members of the public or press. Doing media or public relations work without the knowledge of anyone else in the organization Misunderstanding or taking no part in the fundraising aspects of their role on the board Being difficult to work with, due to their overall negativity or lack of willingness to help Not attending board meetings, creating a knowledge vacuum where they cannot make decisions based on facts 501c³ - Taking Nonprofits to the Third Power 60

61 What Will Be Your Next Step? Board Development: Develop Job Descriptions, Board Orientation, Recruitment New Board Members Board Management: Hold Annual Retreat, Keep the Plan Alive, Establish Committees Strategize to Engage New Donors: Engage friends and colleagues in the organization’s mission, Talk Story Executive Evaluation: Welcoming New Leader, Leadership Evaluation 501c³ - Taking Nonprofits to the Third Power 61

62 Pivotal Point 501c³ - Taking Nonprofits to the Third Power 62

63 Nonprofit Resources

64 Favorite Nonprofit Websites GrantStation – Chronicle of Philanthropy - Nonprofit Quarterly - Blue Avocado – BoardSource - Idealware – TechSoup – Nonprofit Risk Management Center – Independent Sector – C-Forward – Texas C-Bar – 501c³ - Taking Nonprofits to the Third Power 64

65 501c³ - Taking Nonprofits to the Third Power Programs for Conferences and Resource Centers Customized Programs for Individual Nonprofits Strategic Initiative Retreats for Nonprofit Boards Nonprofit Interventions for Staff, Boards and Volunteers Certified ToPs (Technology of Participation) Facilitations Qualified LeadershipPlenty Courses Constant Contact - Authorized Local Expert Certified CCAT (Core Capacity Assessment Tool) Evaluations Association Management Consulting Targeting Membership Growth Dynamics Volunteer Program Assessments Free Nonprofit Career Counseling for Universities as well as Individuals Free Nonprofit Referrals and Resources 501c³ - Taking Nonprofits to the Third Power 65

66 501c³ - Taking Nonprofits to the Third Power Volunteer Management Services LeadershipPlenty Modules Nonprofit Management Courses Strategic Planning Succession Planning Change Management Advocacy Understanding the Nonprofit Sector Social Media & Marketing Courses Our services start with a free conversation to access your situation; together we then determine what elements of support you may need and provide you with an individualized proposal based on those needs and budget. Through our skilled diagnosis, we ensure that you receive the level of support you need at a price your agency can afford. Our mission is to Unleash the Power of the Nonprofit Community by generating Confidence, Competence and Collaborations! c³ - Taking Nonprofits to the Third Power

67 PROSPERITY PARTNERS Who We Are: Highly experienced professionals who share a common goal: helping nonprofits achieve success and sustainability in a challenging economy. What We Do: Provide a wide range of services for nonprofit managers, board members, and volunteers including conference presentations, training meetings, on-site workshops, webinars, strategic planning and facilitations sessions. What We Offer: Affordable, personalized consultations and services tailored specifically to help you achieve your organizational goals 501c³ - Taking Nonprofits to the Third Power 67

68 PROSPERITY PARTNERS CAPACITY BUILDING Nonprofit Tune-Up: Evaluate your organization’s viability and where to focus for improvement Building Capacity Public Relations and Community Outreach Building Collaborations and Community Partnerships SEO for Nonprofits Getting Started with Online Video Getting Started in the Nonprofit Cloud Online Fundraising: Beyond the Donate Button FUNDING AND RESOURCE DEVELOPMENT Grantsmanship 101: Developing Strategies for Successful Proposals The Write Stuff: An Intensive Workshop on Proposal Preparation The American Idyll: How to Compete for Funding and Win! Volunteers: Managing Our Most Valued Resource Special Projects and Special Events: Dollars or Sense? c³ - Taking Nonprofits to the Third Power

69 Advice and Counsel are Free! 501c³ - Taking Nonprofits to the Third Power Mary Beth Harrington


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