nonprofit governance basics

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Nonprofit Governance What distinguishes exemplary boards is they are robust, effective, social systems. tegies | 7331 Monica Lane, Evergreen, CO 80439 | 303-881-6786 | www.questusstrategies.com | www.rsolosky.com | @rsolosky

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Page 1: Nonprofit Governance Basics

Nonprofit Governance

What distinguishes exemplary

boards is they are robust,effective, social systems.

Questus Strategies | 7331 Monica Lane, Evergreen, CO 80439 | 303-881-6786 | www.questusstrategies.com | www.rsolosky.com | @rsolosky

Page 2: Nonprofit Governance Basics

Three Sectors

Private Enterprise

Nonprofit

Government(Public)

Regulatory Agencies

Schools & Human Services

• Transportation• Hospitals • Day Care

• Neighborhoods• Communities• Families

Page 3: Nonprofit Governance Basics

Nonprofit Reality“Nonprofit” is an IRS

classification….

it is NOT a Business Strategy!

Page 4: Nonprofit Governance Basics

Change Agent

Impact

Action

Need

Nonprofit Community Engagement

Page 5: Nonprofit Governance Basics

Leadership

ChangeAgent

Fundraising

Values

Vision

Strategy

Positioning

CollaborationCommunications

Empowerment

Coaching

Measurement

Outcomes

Nonprofits as a Community Change Agent

Page 6: Nonprofit Governance Basics

Governance Axioms

1. The operational leader and the board must work as equal members of a team rather than one subordinate to the other.

2. The work of the two does not divide neatly into policy-making versus execution of policy; each need to be involved with both functions and must coordinate their work accordingly. often

3. In a well-functioning nonprofit organization, the operational leader will take responsibility for assuring that the governance function is properly organized and maintained.

- Peter F. Drucker (Paraphrased from Nonprofit Management & Leadership: Lessons for Successful Nonprofit Governance - 2006)

Page 7: Nonprofit Governance Basics

Governance Model

BoardFunding

Legal

Regulatory

StaffOperations

Program

Administration

Shared Responsibility

Implementation

Policy Decisions

Page 8: Nonprofit Governance Basics

Board

Foundations

Staff

Committees

Constituencies

General PublicDonors

Volunteers

Media

Government

Board Relationships

Page 9: Nonprofit Governance Basics

LegalityCorporate Directors are held accountable under the law for the following:

• Making sure the organization is run in such a way that it returns profit to its shareholders.

• Ensuring the organization complies with the law.

• Safeguarding the financial health and physical assets of the organization.

Page 10: Nonprofit Governance Basics

Governance• The board is comprised of individuals. • However, a director – or even a group of

directors – can not set policy, give directions to staff and volunteers, or make commitments on behalf of the organization.

• Only the full board, acting as a unit, can do these things.

Page 11: Nonprofit Governance Basics

Fundraising

1. Make a Financial Contribution2. Recruitment of New Members 3. Solicit Contributions4. Oversee Fundraising Efforts

Page 12: Nonprofit Governance Basics

Board members and the board as a whole, must exercise due diligence and the kind of judgment that ordinary, prudent people would in similar circumstances.

Duty of Care

Discuss ways to fulfill…

Page 13: Nonprofit Governance Basics

Board members and the board as a whole, must put the best interests of the organization first.

Discuss ways to fulfill…

Duty of Loyalty

Page 14: Nonprofit Governance Basics

Each board member and the board as a whole, must comply with the organization’s policies and with all applicable local, state, and federal laws and regulations.

Duty of Obedience

Discuss ways to fulfill…

Page 15: Nonprofit Governance Basics

Creating Progress

“Don’t Push Growth, Remove the Factors Limiting Growth”

Peter Senge, The Fifth Discipline -The Art & Practice of the Learning Organization

Page 16: Nonprofit Governance Basics

Board Development

"What are the three most important things for the board to accomplish this year, and what kind of board members do we need in order to do so?"

Page 17: Nonprofit Governance Basics

Executive Transition

1. Develop Strong Board with a Public Role2. Conduct Organizational Assessment• Define Organizational Vision• Evaluate Financial Stability• Assess Business Model• Understand Organizational Challenges• Identify Executive Skills

3. Develop Transitional Plan4. Communicate with Stakeholders

Page 18: Nonprofit Governance Basics

Systemic Thinking

Service

Satisfied Consumers

Increased Funding

Balancing Loop Example

Page 19: Nonprofit Governance Basics

Systemic Planning Process

Who Are We?

Where Are We?

How Did We Get Here?

Where Do We Go Next?

How Do We Get There?

Adapted from “The Nonprofit Strategy Revolution”

Step One

Step Two

Step Three

Page 20: Nonprofit Governance Basics

Strategy Pyramid

Page 21: Nonprofit Governance Basics

Lifecycle Analysis

Grass Roots-Invention | Startup – Incubation | Adolescent-Growing | Mature-Sustainability | Stagnant & Renewal | Decline & Shutdown

Page 22: Nonprofit Governance Basics

Lifecycle Analysis

Stage Key QuestionGrass Roots - Invention Is the Dream Feasible?Startup - Incubation How Do we get started?Adolescent - Growing How can we build this to be viable?Mature – Sustainability How can we ensure sustainability?Stagnation & Renewal How, if any can we renew?Decline & Shutdown Should we close?

Page 23: Nonprofit Governance Basics

Lifecycle Analysis

with respect to functionality…

• Administration & Systems• Staffing• Governance• Finances• Marketing• Programming

Page 24: Nonprofit Governance Basics

7331 Monica Lane, Evergreen CO 80439 | 303-881-6786 | www.questusstrategies.com | www.rsolosky.com |

@rsolosky