1. Background on Nonprofit Boards
A Primer
This PowerPoint presentation covers the following topics:
Nonprofit organizations: Characteristics, structure, vision and mission.
Boards of directors: Trusteeship, qualifications, governance and committees.
Staff profile: Executive director, program director

2. Nonprofit Organizations
Revenue generated by a nonprofit organization (through donations, grants or corporate contributions, for example) is not considered profit and is not shared or distributed to stockholders. Instead, it is reinvested into the organization for programs, services, future development and growth.
Many nonprofits registered with the IRS are exempt from federal income tax and donations to their organizations are tax-deductible.
Nonprofits have a board of directors composed of volunteers. The board articulates the organization’s vision and mission, and governs the organization. The board is usually headed by at least the following officers: chair or president, vice-chair or vice-president, secretary and treasurer.
Many nonprofits have paid staff. The chief staff person is usually referred to as the CEO, president or executive director. Additional staff depends on budget and workload needs.
Emphasize the following three points:
While there are some major distinctions between nonprofits and for-profit organizations (notably that nonprofits do not share profits with shareholders), most of the principles of good business can be applied to managing nonprofits.
Nonprofits used to believe it was enough to “do good” and were less attentive to good organizational practices. Today, there is a growing movement towards “business-izing” nonprofits; that is, making them look, operate and be accountable like their business counterparts while staying committed to their missions.
According to Giving USA, more than 98 percent of U.S. nonprofits can be classified as “small” (less than $1 million in revenue) or “medium” (between $1 million and $20 million in revenue) organizations.

3. READ, Inc. Organizational Structure
Organizational structures vary with the size and purpose of nonprofits. Just as in for-profit business, nonprofit organizational structures can be functional, divisional or matrix structures. The structure is determined based on the organization’s needs.

4. Vision
A picture of the ideal nonprofit; one that can meet all of its challenges and acquire the necessary resources to accomplish them.

5. Mission A general statement of purpose: Why we exist and what we do.
Our philosophy and values.
Our target customer.

6. Board of Directors
Composed of volunteers who serve as the “trustees” of the organization.
Responsible for organizational vision and mission.
Chief job of the board is governance.
Board meetings should be primarily focused on receiving committee reports, deliberating committee or staff recommendations and making decisions about those recommendations or other issues. Boards often get bogged down with reports – hearing and discussing them – which can hinder or distract them from taking actions or making decisions.
For more information and resources, see

7. The Meaning of Trustee
“Institutions need two kinds of leaders: those who are inside and carry on the active day-to- day roles and those who stand outside but are intimately concerned and who, with the benefit of some detachment, oversee the active leaders. These are the trustees.”
- Robert K. Greenleaf, The Servant as Leader, 1970
Most nonprofit boards are not referred to as the board of trustees. This is a title usually reserved for boards of larger institutions such as hospitals and colleges or universities.
However, the Greenleaf notion of “trustees” is an excellent conceptualization of the distinction of board members roles regardless of the size and nature of the board and its organization.

8. Board Member Qualifications
Job description:
Scope
Duties and responsibilities
Commitment (time, money, etc.)
Job specification:
Skills
Knowledge
Awareness
Even though nonprofit board members are not usually paid, it is helpful to look at their qualifications in the way we view the qualifications of paid staff, in terms of a job description and job specifications.

9. Board Job Description
Scope: The general purpose of the board member is to participate to the best of his or her ability in governing the affairs of the organization in a socially, fiscally and ethically responsible manner.
Duties and Responsibilities:
Help position the nonprofit to be responsive to consumer/client needs.
Attend meetings (call when you cannot).
Serve on at least one committee.
Come to meetings prepared to be an active participant.
Be involved in activities or special events related to the nonprofit.
Commitment:
Financially support the nonprofit according to your ability.
Follow through with “pledges”.
Membership in the nonprofit.

10. Board Skills Interpersonal skills (cooperation and getting along).
Constructive, critical analysis.
Team player.
Ease in public speaking.
Sales skills.
Ability to organize.

11. Board Knowledge
Expertise or background in a particular discipline (fundraising, public relations).
Previous board or leadership experience.
Understanding of nonprofit structure and sector (industry).

12. Board Awareness Community (broadly defined).
Strengths, weaknesses, resources, diversity, “movers and shakers”, politics of effecting change, etc.
Self-awareness of strengths.
Committed and passionate to organization’s mission.
Organization’s expectations.
Board member role/function.
Board member participation increases when they understand the organization’s mission and what is expected from them as a board member (Marabella, S. D Using exchange theory to enhance not-for-profit board participation. Ann Arbor, MI: UMI Dissertation Service).

13. The primary job of the board is…
Governance
… the exercise of power, influence and control over a nonprofit.

14. Governance v. Management
POLICY (Governance):
Usually the board’s job.
Broad in scope and implications.
Commits the nonprofit’s human or material resources in a substantial way.
Long-term impact/duration.
ADMINISTRATION (Management):
Usually the ED/staff’s job.
Relatively narrow, reversible scope.
Apply the precedent rather than establish it.
Shorter-term impact/ duration.
The delineation between governance and management is critical, as inappropriate crossovers (such as the board micro-managing the staff) often occur, particularly in smaller nonprofits.

15. Making Policy
This chart is not intended to provide exact percentages of who is responsible for making policy but is a graphic image that tells three things:
Board and staff work together on drafting and creating policy.
The board has the official responsibility for approving policy with help from staff.
The staff has the official responsibility to implement policy with help from the board.

16. Board Committees
Conduct the business of the board and report to the board.
Are usually chaired by a board member; however, membership on a committee is not necessarily restricted to board members.
Can be standing (permanent) or ad hoc (created as needed, usually for a limited time period).
Committees are where the work of the board should take place but this is not always the case. Boards often work as “committees of the whole” during board meetings – meaning that the entire board operates as the personnel or planning committee, instead of delegating these responsibilities to sub-groups of the board who conduct their business outside the board meeting. This is typically inefficient (wastes time that the board should use to make decisions) and ineffective (often boards who operate this way do not take the time to fully investigate the issue as well as committees may and may not make decisions that are fully informed).

17. Typical Standing Board Committees
Planning Committee. This committee develops, implements and evaluates organization-wide planning processes.
Marketing Committee. This committee creates and sustains an organizational identity in the nonprofit’s relevant market.
Development or Fundraising Committee. This committee identifies revenue sources and creates plans to acquire that revenue.
Personnel Committee. This committee develops employee policy and practices and conducts the performance management process for the ED.
Executive Committee. This committee is composed of officers of the board. This committee is empowered to make decisions in the absence of the board. This committee often meets to develop the agendas and priorities of the board meetings.

18. Typical Ad Hoc Board Committees
Literacy Day. This committee plans and coordinates a special event to promote literacy in the community.
Capital Campaign. This committee plans and implements a fund drive to raise money over a period of time (1 to 2 years) for capital expenses such as a new office building.

19. Executive Director Chief staff person of the nonprofit.
Reports to the board of directors; implements the plans, priorities and direction established by board.
Participates in the development of policy, plans, programs and direction that is ultimately determined by the board.
Responsible for managing the operations and fiscal activities of the nonprofit; ultimately responsible for (but depending on size of staff may only monitor and not actually do) supervision and appraisal of staff (non-direct reports), program implementation and evaluation, marketing and accounting.
Also, may be called the President, Chief Executive Officer (CEO), Administrator.
The working rapport between the executive director and the board, particularly through the chair, is critical to the success of the nonprofit.

20. Program Director Reports to the chief staff person (e.g., ED).
Responsible for creating, implementing and evaluating programs that fulfill the goals and objectives determined by the board of directors.
Manages the program staff, which often includes volunteers.

21. Personnel Committee
Responsible for setting the overall human resource direction, policy and procedures.
Evaluates the performance of the Executive Director (but not his/her staff).
Studies and recommends to the board strategies, solutions and positions on HR issues as they emerge in the organization.