6 Considerations When Analyzing a Nonprofit’s Board Structure

Your role as a board member on the nonprofit board is an important one and goes beyond assessing that nonprofit’s financial performance or making financial projections for the organization. Keeping an eye on overall organizational health is vital. Doing so without interfering with its operations requires asking good questions, participating in board activities, and being aware of your responsibility as a board member. As reflected by board behavior, here are some questions you ought to consider as you move through your board term.

1. Does every board member understand their role as both fiduciaries AND as guardians of the organization’s mission & vision? 

This translates to having a good handle on the overall financial picture – not the day-to-day operational budget lines, but a comprehensive understanding of the revenue streams, the gross expenses, and any financial burdens like open lines of credit or other loans. Is the organization transparent and accurate when presenting its financial picture? If you have questions, you must ask.

Often this requires a bit of courage since raising your hand as the only board member with questions can be difficult, but the adage is true: if you have a question, it is likely others do too. Board members are also obligated to hold the tiller firm with regard to mission and vision, avoiding the pitfalls of “mission creep” into other, potentially unrelated service areas, and participating in meaningful work like strategic planning.

2. Does every board member understand their role as fundraisers for the organization? 

A nonprofit’s fundraising operations are a critical revenue stream that requires participation from many corners: the executive director, paid staff, volunteers, and board members. When you and your board colleagues participate in all the steps of the donor cycle – identification, cultivation, solicitation, stewardship – it is easy to say that the board values this activity. Be wary of evaluative metrics that suggest keeping fundraising costs as low as possible is the most effective way to operate.

Think about it – can you identify one area of industry or business where management is asked to increase revenue without increasing costs? Admittedly, fundraising expenses can increase wildly without a disciplined strategy, but as a board, you must be willing to accept the costs that allow operations to run more efficiently. Expenditures on fundraising software and the staff to use it well, for example, are one way to promote healthy operations.

3. Does every board member understand their role in operations management? 

This means that the board should be aware that unless they are explicitly tasked with running or fundraising for their organization, they should have only one so-called direct management report: the executive director. The board’s relationship with other administrative staff should therefore be cordial and respectful but in no way supervisory.

This also translates to offering the executive director the same guidance and feedback that might be provided to any other employee, including timely guidance and updates and performance reviews. Performance reviews are particularly important; by collecting surveys from within the organization about the executive director, the board can get a good idea of the leader’s effectiveness and the relative stability of the organization.

4. Does the board function well overall, meaning, is information shared beyond a few chummy trustees, and are decisions made as a group? 

Often a board’s work is hampered by an “old boys’ club” where the executive committee makes decisions in a relative vacuum, opting to keep information away from the general board as a means to protect a misguided sense of confidentiality. Such information can vary, but examples could include potential or actual lawsuits, financial troubles, or problems with the executive director. Be wary of an over-active executive committee that opts to “protect” the rest of the board from bad news. One dangerous result of this is a board that doesn’t trust each other – and then good governance and thus organizational support will grind to a halt.

5. Does the board function with various committees to assist the nonprofit’s mission delivery? 

An excellent nonprofit board has a committee structure that supports the organization’s activities. In addition to an obvious committee like finance, some organizations have a facilities committee, education or programs, development (fundraising), and others. Do these committees meet regularly and understand how they can support the organization? For example, does the Programs committee advocate for the tools and supplies needed?

It’s easy for a board committee to opine that too much technology is expensive, for example, but if trustees understand the advantages of fundraising software to expand service areas or enhance programming, then advocating for these kinds of expenses can help move the organization forward.

6. Finally, in your service to the board of a nonprofit, the best philosophy you can adopt is “if you see something, say something.” 

This is less ominous than it sounds; what this attitude requires is an open and curious mind to understand how the nonprofit works and how the board can best support it. Nonprofit board service can be gratifying if you are committed to the organization’s mission and vision, enjoy your colleagues on the board and understand how your contributions as a board support the nonprofit. Understanding your role and the work of the organization can help you avoid situations that are unpleasant surprises and ensures a board term that serves you and the organization.

Published: May 4, 2022