Tips for nonprofit leaders

Healthy society can’t function purely on market forces, because money can’t buy everything it needs. Certain areas shift either fully to taxpayer support, such as policing, childhood education, and justice; or find some hybrid of private-public mix. In other words, charities and other nonprofits.

The nonprofit way of life struggles year to year, even month to month, with its dependence on unpredictable resources of income and those precious gifts of time, compassion, and expertise which volunteers provide.

Driven by caring and a sense of community, volunteer boards steer most nonprofit ships. These giving stewards inspire, offering precious time and often, personal resources, to help make communities healthier and more enjoyable. What they bring to the borrowed board tables varies — accountants, business owners, and lawyers; former clients and experienced volunteers from the “trenches;” and others simply passionate for a cause or eager to make a difference.

After serving on several through the years, it’s clear that on average, most of us volunteer directors know little about our jobs, even if we think we do. Efficiency, effectiveness, and growth are thus sometimes hampered.

So detailed courses such as that offered by UI and featured in Monday’s Press come in very handy. But not everyone has or takes the time. The National Council of Nonprofits (also a nonprofit) offers general guidance regarding boards’ legal duties, responsibilities, roles, and management tips specific to nonprofits, which run differently than for-profit companies.

Nonprofit boards have the same three legal duties as other boards, including fiduciary responsibilities. Yes, a volunteer director in limited cases may be held liable for breach of that duty. The three basics are:

Duty of care. To ensure assets, facilities, and people are managed prudently; sustain good will; provide oversight for all activities which advance the nonprofit’s effectiveness and sustainability.

Duty of loyalty. Make decisions in the best interest of the nonprofit; not in his or her self-interest. Donations are fine, but an easy example of self-interest is a director benefitting (not necessarily just financially) from the nonprofit’s contract with her business.

Duty of obedience. Ensure the nonprofit (1) follows applicable laws and ethical practices;

(2) adheres to its stated corporate purposes; and that (3) its activities advance its mission. In addition to state, federal, and local law, the nonprofit bylaws and other governing documents define these standards.

Navigate, don’t steer. Except for the smallest organizations, board members (a.k.a., “directors”) don’t, or shouldn’t, handle the day-to-day. That’s for executive directors (ED not to be confused with board of directors) and managers, who are generally paid staff. Boards set policies, hire and supervise the ED (specific and clear, consistent guidance is a key problem area with volunteer boards), provide insight, and handle fundraising. The Board inspires, guides, advocates, and protects; the ED generally does the rest. Many an ED gets burned out and frustrated by micromanaging, well-intentioned volunteer boards, whose members often send the ED mixed messages. Designate one, primary board contact between board and managing staff. If it’s not working, evaluate and retrain, or rethink, the ED; otherwise, leave him to it.

Train your board, right away. Yes; full orientation is time-consuming, but new directors can’t be expected to come in understanding what’s expected of or needed from them. This also prevents unnecessary board conflicts, misimpressions, and their fallout on staff, clients, and the public. Giving a thick binder of minutes and background documents is standard (include defining board roles in real terms, specific board and staff job descriptions, organization charts; the nonprofit’s mission, accounting, and status), but they generally don’t cover the bigger picture.

Consider the consent agenda, and follow Robert. In any meeting common frustrations are wasted time and unnecessary discussions. A consent agenda streamlines meetings, so routine stuff goes quickly and meetings can focus on big issues. Robert’s Rules of Order may seem fussy, but they keep things moving efficiently. More on both of these in Tuesday’s column.

Our expectations of others and ourselves define future relationships, aiding both effectiveness and fulfillment in charitable work. No one wants to waste time or effort, especially within charities where the stakes are too high to risk anything but optimal functioning.

A caveat: Don’t confuse “board” or “director” with “trustee.” Trustees of charitable trusts have different roles and responsibilities and are held to a higher fiduciary standard.

For more information and links to tips and informational videos, business forms, and other resources see CouncilofNonprofits.org. Next time, tips for efficiently run meetings.

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Sholeh Patrick is a columnist for the Hagadone News Network and former business lawyer. Contact her at Sholeh@cdapress.com.