Most nonprofit boards have an option to evolve, or not evolve, from one stage to another. This blog post discusses the most common options and the implications.
A Founder’s Board: A nonprofit founder will typically recruit a few family members or friends to comply with the IRS’s minimum board requirement. The board’s other role is to encourage the founder to keep building the nonprofit in whatever direction the founder would like to develop it. The advantage of this board is that the founder has a support group and has almost complete control of where the nonprofit is going and how and when it will get there.
A Credibility Board: If a nonprofit’s primary funding strategy is getting grants, it might decide to add board members who have a lot of relevant professional credibility and experience. This type of board is likely to have a significant influence on how the nonprofit does things, helping it adopt more professional “best practices” so that they are more grant eligible. The founder gets a lot more advice on how to run things, and less unconditional support.
A Policy Board: If a credibility board continues to grow, it is likely to recruit members who are expert in many of the nonprofit’s functions. A Policy Board will develop policies of how the nonprofit should operate in each functional area, and evaluate the Executive Director on how well their policies are executed. This might enable the nonprofit to become a preferred supplier to the foundations and agencies that fund the kind of work that the nonprofit does. On the other hand, the ED’s freedom of action has a lot of policy constraints.
A Fundraising Board: If an emerging nonprofit’s primary fundraising strategy is individual donors, the board is more likely to recruit donors that are socially active in the community, so that they can recruit more donors, volunteers, committee chairs and board members to run more and bigger events and campaigns.
A Strategic Board: Fundraising board members tend to have a good sense of what gets donors excited about the nonprofit. This board might logically start doing some strategic planning, setting directions for the nonprofit in order to make it easier for the board and its committees to attract even more and bigger donors. A strategic board sets the development direction of the nonprofit and looks to the executive director to implement their strategy.
What type of board does your nonprofit have and what are the implications on the role of your executive director? What kind of board and executive director do you want to have?
Author: Bob Cryer, Executive Coaches of Orange County, www.ECofOC.org