Principles and PracticesFor Nonprofit Excellence

The Nonprofit Sector

1996-2005, 501c3 nonprofits increased by 50% to 1.5 million

Religious/education institutions and programs receive 46% of the sector gifts

Nonprofits in the State of Texas

1998-2008, number of organizations increased 44%

2008, population in Texas: 24.3 million people One nonprofit for every 242 people

The Nonprofit Board’s Legal and Ethical Obligations

Public Trust

Created for public philanthropic purposes

Standards of Conduct

Duty of Care

Duty of Loyalty

Duty of Obedience

Duty of Care

Go to meetings

Take responsibilities seriously

Read and understand documents

Ask questions

Know what organization does and how well

Duty of Loyalty

Disclose any conflict of interest

Focus on the organization’s best interests

Maintain confidentiality

Maintain loyalty

Duty of Obedience

Safeguard the mission

Maintain public trust

Manage operations and resources

Assess effectiveness regularly

Effective Governance

Board Responsibilities

Provide leadership and strategic direction

Set policy actively and ensure adequate resources

Provide oversight and direction for the executive

director

Review/approve annual budget and key financial

transactions

Recruit new members and provide orientation

Evaluate board’s own effectiveness

Planning

Set overall direction, activities, and strategies

Engage in sound planning

Define a clear vision for the future

Specify strategies, goals, and objectives

Incorporate input from constituents

Be intentional

Transparency and Accountability

Ethical obligation

Convey information regularly and openly

Information should be easily accessible

External visibility

Public understanding and trust

Program Oversight

Commit to effective, efficient delivery of services

Strive to improve

Understand each program

Approve annual plans and evaluations

Oversee program process and accomplishments

Fundraising

Develop a fund development plan

Be a donor

Monitor plan accomplishments

Help to identify and solicit donors

Support fundraising committee

Sell special event tickets

Attend the events

Financial Management

Act responsibly in managing financial resources

Use financial resources to accomplish mission

Keep current and accurate financial records

Engage an independent audit

Approve annual budget and review performance

Evaluation

Assess impact of actions and act upon this

information

Measure performance regularly against a clear set

of goals and objectives

Improve the quality of processes, programs, and

activities continuously

Share performance metrics with constituents and

the public

Board/Staff Responsibilities

Board

Hires, directs, supports and evaluates executive

director

Chair is the official link from board to executive

director

Staff and board act as partners, board is 51%

partner

Draft good policy collaboratively with staff

Executive Director

Operates under the board’s control and direction

Hires and supervises staff

Supports the board in developing its governing role

Acts as the bridge between board and staff

Staff

Paid and unpaid

Carries out the work of the organization under the

executive director’s guidance and supervision

An Effective Board

Strategy focuses on mission

Board work supports mission

Board determines policy, then staff implements it

Good management and governance result in a

competitive advantage

Questions?