Board Governance Video




Webinar Summary

This webinar is focused on what it means to serve on a nonprofit board and details the components that make a board successful. We will touch on diversity, both with nonprofit boards and staff, as well as the importance of having a solid strategic plan in place. We’ll end with the very relevant topic of how to keep your nonprofit alive and thriving in uncertain times. We brought in Tom Vansaghi, assistant profession of nonprofit leadership and director of strategic planning at William Jewell College, to shed some insight into these issues.

What does it mean to serve on a nonprofit board?

A nonprofit, unlike a for-profit, does not have owners. A nonprofit’s board of directors’ act as the fiduciaries or trusted advisors who steer the organization toward fulfilling their credible purposes and living out its mission. Stepping back to basics, the optimal size of a board is between 12-15 people. If the board is much larger than that, it becomes cumbersome and difficult to give everybody a meaningful role. However, if it's too small, then you don't have enough representation, or it can end up feeling like a burden for people who are taking on too many responsibilities.

Why do nonprofits have boards?

The board of directors is the entity that is looking out for the nonprofit, ensuring that it is being stewarded in the right direction. One of the key duties of a board is to ensure that the organization’s mission is clear and that the organization is not steering away from that.

There are three primary functions of nonprofit boards:

  • Ensure resources
  • Establish organizational identity
  • Provide oversight

Every nonprofit begins with an idea, and usually you can find three types of nonprofit boards:

  • Organizing and founding boards, which are in the early stage
  • Governing boards, which are in the developmental stage
  • Institutional or mature boards, which are in a mature stage and are supervising at a higher level

Healthy boards create a culture of inquiry where different opinions and perspectives are embraced. There is a level of trust and candor as well as thoughtful discussion and conflict resolution. There should be a healthy partnership between the CEO/executive director and the board that opens a space for healthy discussion.

Strategic planning tips

A strategic plan is one of the most important functions for a board of directors and the board should fully own and establish the strategic planning process. When creating a strategic plan, make sure it is actionable. The board should be accountable for monitoring the strategic plan and its progress and making sure every initiative is tied to the nonprofit’s mission. The plan should look out over the next three- or five-years to make sure the organization is moving methodically towards further achievement of their mission. From the plan, consider creating a one-page dashboard of the most important measures to track overtime.

Below are four key tips to effective strategic planning:

  • Focus on the most important issues
  • Don’t avoid difficult or sensitive questions
  • Produce a document (strategic plan)
  • Link to annual work plans and the annual budget

Look at strategic planning as an opportunity. Your plan should encompass the nonprofit’s mission, purpose, values and reason for being. A planning cycle may include reviewing your current plan and metrics, then doing an environmental scan, stakeholder analysis or surveying donors to see how you are doing. Take a look at your goals and make sure your initiatives line up to those goals. Consider doing a competitive analysis or business model analysis. From there look at organizational and leadership capacity and draft a plan that is relevant and intentional – and monitor progress.

Sustainability: How does a nonprofit stay relevant in an ever-changing world?

Organizing for successful fundraising takes time and planning and board members need training and resources to get involved. This training should include a clear understanding of the purpose or why of the nonprofit, of the programs and structure of the nonprofit and the benefits of making a gift. Board members can feel nervous about asking for money for many reasons including the fear of rejection or reciprocity, a lack of staff support and preparation or perhaps they haven’t made their own gift. If board members fully understand the mission and go into fundraising on behalf of the people they are trying to serve, the fundraising process should be fairly straightforward.

When donors stop giving, they are usually not satisfied with the level of communication they receive from the nonprofit. A Penelope Burt study found that donors want three things from nonprofits to ensure they continue donating:

  • 1. Prompt personal acknowledgement of gifts
    2. Confirmation that gifts will or are being used as intended
    3. Measurable results on how their gifts are effective before being re-solicited

As a nonprofit, board members should be engaged in the cultivation of current and prospective donors and have a clear map for the prospects they are working with. This enables prospects to be assigned to a staff person and/or a board member with a targeted gift level with meetings or visits scheduled out over a year or more. The majority of nonprofit revenue is generated through earned revenue and only 13% is through donated revenue, so don’t overlook earned or socially entrepreneurial sources of funds.

Diversity: Room for boards to grow 

Most nonprofits, in general, value diversity and inclusion and through their work intentionally serve diverse people and communities – in fact, around two-thirds of organizations say that diversity is a core value. However, the percentage of people of color on nonprofit boards has not changed in recent years. While 60% of nonprofits serve people of color, a BoardSource survey shows that only 8% of nonprofit board members are minorities and 30% of boards lack a single member of color.

We hope this information helps you navigate the year ahead and build a diverse, strong board that aides in the growth of your nonprofit and overall mission.

If you are interested in receiving a recording of this call or have any questions, please contact your UMB Bank representative. During these uncertain times, we want to assure you that UMB Bank remains committed to providing the customer service that you have grown to know, while helping to ensure the health and safety of our associates and clients.

With regard to the information presented in this webinar, UMB does not make any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, and specifically disclaims any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, product, service or process presented. Any such material or information presented is for informational purposes only.

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