The following tome from SmartBusiness begins with the title "best practices" with the very first sentence noting that there "are no official "best practices" that can be applied universally to every nonprofit"... I unequivocally agree: there are very few "best practices", those practices that have been tested and found true, particularly in the area of nonprofit governance. Now one could argue that there are promising practices - practices that hold some indication of making a positive impact like not having an Executive Committee. And, there are common sense practices which while not tested as tried and true, would be difficult with which to argue - like every board member must be somewhat familiar and even conversant with the results of their nonprofit's audit (of course not being familiar violates the tenets of fulfilling one's fiduciary duty but only in the extreme is there any real demonstrated knowledge of what happens when no board member is familiar.
That said, the following provides interesting prescriptive advice. Like having each board member form their own objective - not precisely sure what that might look like but if one suggests that board members should each understand why they are board members and what impact they would like to contribute - why not. On the other hand, I do believe that a board that periodically reviews its mission (say, every 3 years during the strategic planning process) can find benefits. Proven to have an impact....ehhhh.. Monitoring actual to budget certainly fulfills a member's fiduciary duty to ensure that resources are being used toward mission and plans.
But I'm honestly unclear as to why "young professionals and leaders from diverse backgrounds can gather to discuss processes, issues and best practices to collaborate and help each other solve problems" is singular to these members and not the whole board and what precisely these folks would be discussing and/or what problems they would be solving. And then the author jumps to recruiting which sure, is a topic with which every board has frustration. But I'm not understanding this author's thought.
But perhaps you can gather from this hodgepodge words of wisdom. But please don't begin to think this is all "best practice" in governance. Could be someday, but not yet.
While there are no official “best practices” that can be applied universally to every nonprofit, organizations should consider a few basic steps to ensure they stay aligned with their mission and put themselves in a strong position for the future.
“Some of these practices are internal, while others involve going out into the community to find those who might help an organization grow beyond what it once considered possible,” says Steven Dieringer, an audit manager at Barnes Wendling CPAs.
Smart Business spoke with Dieringer about steps nonprofits can take to improve their organization.
What can nonprofit board members do to be more effective in their positions?
It’s crucial each year for a nonprofit board to review the organization’s mission statement and ensure its operations are supporting it. This enables the board to focus its efforts on supporting the mission.
Consider asking board members to formalize their own objective. This exercise can help orient each member, and the board as a whole, with the nonprofit’s direction when planning events.
Drafting an objective from scratch can give each member of a board a strong sense of pride and ownership over their roles and responsibilities. It also leads to clearly defined roles and lines of authority, and better communication.
In what ways can nonprofit boards better manage an organization’s finances?
There are several best practices nonprofit boards can incorporate to ensure effective financial management to cover program services and administrative costs. The most effective practice is budget monitoring.
Budget monitoring gives an organization the ability to identify and explain the causes of budgetary variances, and that allows boards to adapt as necessary. Reporting revenues and expenses properly is important for public monitoring because sites such as Charity Navigator rank organizations based on financial metrics. An organization’s rank on this or similar sites can have a noticeable impact, both good and bad.
How can board members help their nonprofit build for the future?
Young professionals can be a valuable resource for nonprofits. Some communities hold workshops in which nonprofit board members, young professionals and leaders from diverse backgrounds can gather to discuss processes, issues and best practices to collaborate and help each other solve problems. These are not-to-be-missed events that, if mined carefully, can help nonprofits improve their board representation today and into the future.
There are several reasons a nonprofit should have board representation at young professional meet-ups. For instance, young professional groups serve as a pool of valuable future candidates for nonprofit boards.
Further, some organizations rely on their heavy-hitter donors and ignore young professionals, assuming they aren’t in a financial position to donate as much. Yet, as a recent study shows, the average millennial has a network of 250 people. This is important for nonprofits because it’s a means of securing future donor pools, especially if their current base may not be able to donate more in the future.
How can nonprofit boards be more effective recruiters?
Assign a member to the position of lead recruiter, which will help an organization hone in on the skills that best align with the group’s needs.
The lead recruiter should be someone who is proactive, can easily identify the organization’s needed skillsets, and is able spend time with new and prospective members. Formalizing the recruitment process also ensures everyone has an equal opportunity to apply.
Nonprofits should talk regularly with their staff, board, volunteers, donors and other stakeholders to share best practices and review current strategies. This will go a long way toward ensuring all facets of the organization are operating uniformly and in a way that keeps the mission at the forefront. ●