Your board of directors will be critical in keeping your nonprofit focused as it grows. Your organization’s life stage will help determine your board’s priorities, responsibilities and composition, but NFP boards should evolve over time.
Early Years
Founders or early volunteers are likely to populate an initially small board that primarily focuses on running the organization day-to-day. Young boards tend to be more entrepreneurial and risk-taking than more established ones. Even with a small board, however, critical decisions should be made by formal votes recorded in written minutes, rather than by casual consensus.
Within the first few years, you’re likely to add paid staffers capable of taking over daily operations. At this point, begin to create a formal governance structure for your board and try to add members with more diverse backgrounds. Look for candidates with at least two of the “three W’s”:
- Work. Seek people who can be counted on to reliably and enthusiastically pitch in wherever and whenever needed. These individuals do more than attend board meetings, they also volunteer, organize events and interact with clients.
- Wealth. Those with wealth, or connections to wealth, can generate funds, whether by donating from their own pockets or tapping others.
- Wisdom. Wisdom refers to necessary expertise. These candidates may have nonprofit sector experience, deep knowledge about your constituency, or professional credentials in accounting, law, marketing, public relations, IT or another field.
Growing Pains
Perhaps the most common marker of a nonprofit in the growth stage is a change in its board’s focus from operations to governance. Although your board likely will continue to be active in operations, it must start pivoting to strategic matters — the policies, planning and evaluations necessary to pave the path to sustainability.
You may want to enlarge your board at this stage to accommodate a wider range of skills, talents and backgrounds. Propelled by their passions for the cause, former or current volunteers or clients may ascend to board positions.
As your organization grows you may also want to establish board committees. However, it’s important to resist the urge to form too many committees. Some organizations implement a three-committee structure, with committees for internal affairs (for example, finance, HR and facilities), external affairs (such as fundraising, PR and marketing) and governance.
Maturity and Stability
A mature nonprofit’s brand identity may enable it to attract more wealthy, prestigious and well-connected members. Ideally, these members will have more to offer than simply money, such as industry expertise or a strong personal commitment to your mission. Adding such board members may increase your nonprofit’s financial stability.
Mature organizations usually have a greater wall between paid staffers and board members, with the executive director serving as a bridge between the two groups. At this stage, the board assumes a greater leadership role by setting direction and strategic policy. It may be tasked with difficult decisions involving funding, tax compliance and even legal matters.
Welcome New Ideas and Perspectives
Note that nonprofit boards tend to become more conservative — in terms of openness to change and risk — over time. This isn’t necessarily a problem unless you have board members who are stubbornly stuck in positions that no longer work. To maintain a board that welcomes new ideas and perspectives, you might want to ask board members to agree to serve time-limited terms. Contact a member of our Not-for-Profit Team for more information.