The Nonprofit Board Answer Book

Introduction: The World of Nonprofits xv

Part One: Basic Board Functions

1 What are the basic responsibilities of a nonprofi t board? 3

2 What are the legal duties of a board member? 6

3 What is the board's role and involvement in mission, vision, and values? 9

4 What is the board's role in fi nancial management? 12

5 What is the board's role in strategic planning? 16

6 How does strategic thinking contribute to board and organizational effectiveness? 20

7 What is the board's role in fundraising? 23

8 What is the board's role in organizational evaluation? 27

9 How does the board avoid the extremes of "rubber stamping" and micromanaging? 32

10 Why is connecting and communicating with constituencies an important task for the board? 36

11 How does a board function as a team? 40

12 What are the attributes of a high-performing board? 43

Part Two: Board Structure

13 What is the best size for our board? 49

14 How should we structure our board? 52

15 What types of board committees should we have? 55

16 How can our committees be most effective? 58

17 Does our board need an executive committee? 62

18 Should our board have advisory councils? 65

19 What is the role of the board chair? 69

20 What board offi cers should we have? 73

21 How should we select our board offi cers? 76

22 What kind of board does an all-volunteer organization have? 79

Part Three: Board Member Selection and Development

23 How can we recruit active, involved board members? 85

24 How can we use a board matrix to identify recruitment needs? 89

25 What is the chief executive's role in board recruitment? 93

26 How can a membership organization build an effective board? 95

27 How can our board become more diverse and inclusive? 98

28 What should we tell our prospective board members? 101

29 What should we include in our board orientation? 106

30 Should members of the same family serve on a board? 109

31 Should constituents serve on the board? 112

32 What should we do about uninvolved board members? 114

33 Should we have term limits for board members? 119

34 How can we engage former board members and chief executives? 122

35 Should board members be compensated? 126

36 How can our board assess and improve its own performance? 130

37 Should individual board members be evaluated, and, if so, how? 136

Part Four: Board and Committee Meetings

38 Is a board legally required to hold open meetings? 141

39 How often and where should we meet? 144

40 How can we improve our meetings? 147

41 How can we encourage debate while promoting civility in the boardroom? 154

42 What is the purpose of a board retreat? 158

43 Who should attend board meetings, and what are their roles? 160

44 How should staff members participate in board and committee meetings? 163

45 What are the different ways boards make decisions? 167

46 How should board minutes be written, approved, and kept? 170

47 How can e-governance improve board and committee work? 174

Part Five: The Board's Role as a Fiduciary

48 How does a board help ensure the organization's long-term viability? 181

49 What does the board need to know about reserves and investments? 185

50 What is the board's role in the budget? 190

51 What is the board's role in the annual financial audit? 193

52 What are the signs of fi nancial distress in an organization? 197

53 What should we do if we suspect fraudulent activity? 200

54 What policies and practices should we adopt to manage confl ict of interest? 205

55 How can we protect the organization-and ourselves-from lawsuits? 210

56 What is a Form 990? 216

57 Why should every board member make an annual monetary contribution? 219

58 How can we develop board members' fundraising skills? 222

59 How can we generate revenue beyond fundraising? 225

60 How does a nonprofi t operate a for-profit subsidiary? 230

61 What's the best way to keep track of board policies? 236

Part Six: Board-Staff Relations

62 How does an all-volunteer organization make the transition to paid staff? 243

63 What is the board's involvement in staff selection and management? 247

64 What is the ideal relationship between the board chair and the chief executive? 251

65 Should the chief executive have a vote on the board? 257

66 Should board members be hired as staff members? 259

67 How should we evaluate the chief executive? 261

68 How do we set fair compensation for the chief executive and the staff? 265

69 What is the chief executive's role in improving the board? 269

70 What is the board's role in relation to the staff? 273

71 How can the senior staff contribute to board effectiveness? 276

72 How can we facilitate the end of a chief executive's employment? 280

73 What characteristics should we look for in a new chief executive? 286

74 How do we fi nd a new chief executive? 291

Part Seven: Organizational Change

75 What is the typical lifecycle for a nonprofi t organization? 299

76 How do we ensure that the organization thrives after the founders depart? 304

77 When should an organization consider revising its mission statement? 307

78 When should we enter into strategic alliances with other organizations? 310

79 When should we consider a merger or acquisition? 313

80 How can we expand the organization's scope to an international level? 318

81 Should our charitable organization engage in lobbying? 323

82 How should we respond to an organizational emergency or controversy? 326

83 What is the board's role in hiring a consultant? 330

84 When should the board consider closing a nonprofit organization? 332

85 How does the board keep up with organizational change? 335

Conclusion 339

Index 343