Creating a Nonprofit Board

Guidelines on Building an Effective Nonprofit Board of Directors

A good nonprofit board of directors doesn't just happen. It must be worked on. Here are some considerations to get you started.

If you want to end up with an effective board of directors for your nonprofit organization, you should take various factors into consideration.

Size Matters

The number of board members should be not to big, not too small, but just right. What does just right mean? It depends partially on the functions of the board.

Larger boards, composed of around 15 members are useful when:

  • fundraising (or donating) is one of the main functions of the board
  • many subcommittees will be necessary for the board to fulfill all its roles

Meanwhile, smaller boards, of about 7 members, can operate more informally and possibly make decisions more quickly. (A small dysfunctional board, however, can be harder pressed to be decisive than a well-run large board).

Diversify

A diverse group of people is more likely to consider various perspectives on a problem or opportunity, and more likely to come up with creative solutions. Ethnic and racial diversity is critical – the board of directors should look as much like the client population or the population of the surrounding area as possible. But other types of diversity can be important, too.

Geographic diversity can be important. If you represent the interests of a county or state, for instance, it is altogether too easy to end up with a board that is comprised mostly of people who live in the same city where the nonprofit is located—people who can have trouble understanding the needs of your other constituents.

One of the most important areas of diversity you should carefully seek is diversity in expertise. You don’t want everyone in your free clinic’s board of directors to be a doctor, for instance. Nurses, social workers, accountants, and lay people can all strengthen the board. Here are some common types of knowledge and abilities you should look for from different board candidates:

  • Expertise in the subject matter relevant to the nonprofit (for instance, performing arts or homelessness, or whatever it is you do)
  • A solid financial background
  • Experience fundraising, or the ability to tap into high-dollar donors
  • Knowledge of program evaluation

Finding Candidates

The executive director of the nonprofit, other key staff, and the members of the current board should get together to identify people who can strengthen the board. If there is no existing board, the staff should use their network to ask people to ask people if they are interested in participating.

To save time for more pressing board matters at regular meetings, a subcommittee responsible for board recruitment can be formed. (Of course, the entire board might want to vote on new members, but the subcommittee can for a list of potential candidates, approach them, interview them, and present their findings to the board).

Interview for Fit

Once potential board members have been identified and approached, the next step is to interview them. You should look for:

  • explicit assurance regarding the amount of time they are willing and able to commit
  • an understanding and commitment to the mission your organization serves
  • the ability to feel comfortable speaking up along with the ability to listen to other’s opinions
  • the capacity to disagree with a board decision but to support the decision and organization once the vote has been cast

More on Nonprofit Boards of Directors

Estela Kennen - Estela is a doctoral student in Public Administration and a freelance writer and editor.

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23 Comments

Comments

Dec 12, 2008 7:22 PM
Guest :
This is a VERY informative website. Thank you very much!
Stephanie
Central Oklahoma
Dec 13, 2008 1:01 PM
Guest :
Right info for starters,

SomaliCan
Columbus, Ohio
Feb 15, 2009 4:42 PM
Guest :
THis was very informative. This site helped me with my next steps in Board formaiton.
Mar 10, 2009 8:53 AM
Guest :
Is there a point at which a small organization would decide that an executive director is not necessary due to lack of funding to pay their salary?
Mar 10, 2009 7:16 PM
Estela Kennen :
Well, there might be a point when you would decide that the position of Exec Director is not viable due to lack of funding, but lack of finances don't change whether a position is necessary or not. If there is no executive director, who will take over those functions? who will orchestrate the day-to-day tasks and see that the mission of the organization is being followed. If someone else can do it (or if the ED position can be restructured -- for instance, become part-time, or taken on additional duties so another position can be removed), then by all means do it. If the organization is small enough that there are no day-to-day tasks, then maybe there is no point of an ED... or at least, a paid ED. But in most cases, the ED fulfills critical functions, without which the organization would fail.
May 7, 2009 5:00 PM
Guest :
Hi Estela,
Thank you for the site. It is valuable information and template. Is the executive director a voting or non-voting member of the board?
Theodore
Melbourne
May 13, 2009 12:02 PM
Estela Kennen :
There might be a rule governing this in your jurisdiction, but the general practice is that the executive director should be a non-voting member. That can create problems when the Exec Director is also the founder of the non-profit, and wants to have a say in both the day-to-day operations and the strategic planning, as is often the case with small start-ups. However, the risk of conflict of interest (or the risk of even the appearance of conflict of interest) is too great for the Exec Director to vote on the board of a legitimate nonprofit.
Jun 4, 2009 6:57 AM
Guest :
Maybe this is a special circumstance, but I am currently working as a contract employee for a tourism authority. Officially a governmental non-profit aimed at increasing travel and tourism to the area, the board is made up of several hotel managers, event site managers or sales people, and local government employees or elected officials. How can this not be a conflict of interest?
Jun 25, 2009 3:47 PM
Guest :
Can a Director and original founder act as a board member to keep from losing control of the organization they started? As long as they obstain from voting on issues concerning Director related issues.
Nov 5, 2009 10:33 AM
Guest :
Thank you for this helpful website. We have been a informal board of a support group that has had no funding. Recently we have been in a position to receive donations. therefore, we are opening a bank account and have been told we should form a board and have a meeting with minutes showing that we agree to open an account for the purpose of maintaining our website and help with costs. Should we first have a meeting establishing the board of directors and each of their duties?
Nov 5, 2009 7:00 PM
Estela Kennen :
Dear Nov 5,
Is your organization official? If not, the first step would be to incorporate it. Then I would establish the board and delineate its functions; then I would discuss and vote on the creation of a bank account (this could happen at the same meeting if you guys are very efficient). I wish you success with your venture!
Dec 22, 2009 8:08 PM
Guest :
GREAT! Thank you for the useful information.

A. Williams
of CLP
Dec 29, 2009 5:56 PM
Guest :
Estela,
Another question re - NFP boards. I'm working as a volunteer with a national NFP and would like to increase/improve local awareness. Is it common (or allowed) for national groups, with their own boards, to have local boards? The objective not being to drive goals of the total organization - but rather to drive local fundraising and awareness? Thank you
Dec 30, 2009 8:36 AM
Estela Kennen :
Dear Dec. 29,
Great question! If your NFP is an independent legal entity (ie, with its own 501c3 designation, FEIN, articles of incorporation) that is just affiliated to/branded by the national group, then you are most certainly allowed to have your own board. However, it sounds like your local group is a branch of the national organization. In that case, the thing to do might be to create what is usually termed an "Advisory Board" (but could also be called a "Committee" or perhaps "Council") which does not have binding authority, but is there to support the local entity. In fact, you should talk to the national group about the possibility of making advisory groups part of the policy for local branches of the organization. Hope that makes sense. Good luck!
Dec 30, 2009 1:45 PM
Guest :
Estela,
Is it ok for a major donor/funder of a non-profit to be a board member? Also, our non-profit board has several members that are appointed by our major funder. In essence, there appointees and them make up 2/3 of the Board. Is that common?
Thanks.
Jan 7, 2010 6:11 AM
Estela Kennen :
Dear Dec 30,
It is quite common for major donors/funders to be board members (it is reasonable for them to want a say in how their money is used and that it is managed well). Your set up regarding 2/3 of board members being appointed by the major donor is common under certain situations, mostly for family or company-affiliated foundations. If yours is a charitable organization (ie, 501c3) that is not a foundation, there could be potential long-term problems with the setup you mentioned. The best strategy for the org might be to slowly divest yourself of the donor's appointees (though not entirely, maybe to 1/3 or 2-3 board members). You will have to sell why this would be beneficial to the org (can attract more donors; does not make it dependent on one donor; need fresh blood every once in a while; board diversity does not currently correspond to the org's mission, etc.) Good luck.

Estela,
Is it ok for a major donor/funder of a non-profit to be a board member? Also, our non-profit board has several members that are appointed by our major funder. In essence, there appointees and them make up 2/3 of the Board. Is that common?
Thanks.

Feb 2, 2010 2:27 PM
Guest :
Is it appropriate for an Executive Director of a non-profit sit on the board of another non-profit? The two organizations are close geographically (same donor base) and also share many services.
Feb 3, 2010 7:55 AM
Estela Kennen :
Executive Directors of one nonprofit often sit on the board of a nearby nonprofit because they have many pertinent skills and connections. However, conflicts of interest can arise if, say, the two organizations are seeking funding from the same sources. This is what conflict of interest clauses in bylaws are for! The Director can recuse him/herself from decisions regarding whether to pursue funding that might be of interest to both organizations. Or the Director can recommend that the two organizations work synergistically, if possible. For instance, I am on the board of an anti-trafficking organization that has a couple of board members who work for a domestic violence org. In this case, it makes more sense for the domestic violence org to expand its services to include counseling to female trafficked victims instead of the trafficking org seeking funding to create a whole new branch of services. (Of course, in a bigger city, there might be a need for both, but the numbers just don't play out in this case). Hope that makes sense.
Feb 21, 2010 9:47 PM
Guest :
I'm founder of a newly created NFP organization with its FEIN, articles of incorporation. I elected to have members run the foundation but currently do not not have members. What is the destinction between Directors and members? And are the roles the same?

Thank you for this website - I came looking for By-Laws templates.
Faye - Dallas Texas
Feb 25, 2010 7:35 PM
Estela Kennen :
"What is the distinction between Directors and members? And are the roles the same?" This is a GREAT question -- and I'm sure one many people have. Unfortunately, you should have asked it BEFORE you filed your articles of incorporation.

Members are sort of like stockholders. If you own stock or money in a mutual fund, you may have noticed how every once in a while you get a letter in the mail inviting you to the annual stockholder's meeting or asking you to designate a proxy. Well, when you have a membership organization, you have to let the members vote on things at least yearly to keep things legal. (The term "member" is confusing because you can become a "member" of places like museums or zoos, but you're not a member in the specific way the IRS means). Members are not the same as Directors. Having a member-based organization is a much more democratic way of doing things, and thus may be appealing for a certain type of organization (like a co-op), but for most nonprofits, it actually just makes decision-making and compliance with the rule difficult and expensive. You might want to think about this further and possibly amend your articles of incorporation. Good luck.

Aug 5, 2010 6:44 PM
Guest :
This is very informative. My friends and I are starting a non-profit and the advice is clear and concise.
MRF
South Carolina.
Sep 19, 2010 12:45 AM
Guest :
I have a question. I would like to ask 60 of my friends and family members to buy 1 backpack, 5 textbooks, and a pack of pens and pencils each. That would be 60 backpacks, 300, books, and 120 packs of pens and pencils. Do I have to now go through the whole process of registering as a non profit? I do plan on giving this a name and making a website to keep my friends and family updated with pictures of event where we will give the stuff away. By the way, I would be collecting this stuff in Las Vegas then ship them to the country of Belize for Donation. Please help?
Jan 20, 2011 7:50 AM
Estela Kennen :

Over the years, people have contacted me to ask detailed questions. I am sorry to say that I don't have the time (and in most cases, the expertise!) to answer your questions. Please try Idealist.org Also, most states and some cities have non-profits that exist solely to help other nonprofits. They will know the laws of your state much better than I ever could. Thank you and good luck!
23 Comments
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