Board Enlightenment:  Getting the Board You Want and Need

Mary Beth HarringtonAugust 12, 2014

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Biography• 10 years corporate marketing, public relations,

advertising (psychiatric hospitals, DFW Tourism)• Carter BloodCare, Marketing Director • Dallas Zoo, Graphics Specialist• Dallas Public Library, Volunteer Coordinator• Volunteer Center of North Texas – Agency Relations

Director• Austin Public Library Foundation – Executive Director• TANO – Community Outreach Director• San Antonio Area Foundation – Curriculum Development

Director• 501c³ - Taking Nonprofits to the Third Power - President

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501c³ - Taking Nonprofits to the Third Power

A few of our clients….• Texas Habitat• US Tennis Association (USTA)• Meals on Wheels of North Texas• Texas Association of Museums• Habitat for Humanity Texas• Keep Texas Beautiful• Literacy Texas• Texas Library Association

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Board Development

• Education• Enlightenment• Empowerment• Intervention

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Sources for Session Information

• Office of Attorney General of Texas• Secretary of State of Texas• BoardSource• Internal Revenue Service

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Today’s Agenda

• Responsibility of Governance• Fiduciary Responsibilities• Responsibility of Board Management• Responsibility of Board Recruitment• Responsibility of Financial Sustainability and

Advocacy• Brave New World• Responsibility of Evaluation

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Envisioning Exercise• Why are you on the board of Habitat for Humanity ?• What does Habitat for Humanity mean to you

personally?• What do you wish to gain personally from your time

as a board member?• How can you best serve Habitat for Humanity as a

Board Member?• What are you willing to do to see Habitat for

Humanity succeed?• Where do you see Habitat for Humanity as an

organization in 2024? 7

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Pivotal Point

8Series10

0.1

0.2

0.3

0.4

0.5

0.6

Option 1 -Stay the course

Option 2 - React to change

Option 3 - Plan for change

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Story Time!• Man who walked this earth over 2000 years ago.• In a short amount of time, he changed the world• However, would his mission succeeded without his

followers?• “And he said unto them, Go ye into all the world,

and preach the gospel to every creature”.• This is how a movement starts….what is your role?• Will your role be to….• Stay the course• Allow for change to happen• Plan for change

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Attributes of an Effective Nonprofit Board

•Commitment to the mission of the organization.

•Understanding of the board’s governance roles.

•Active involvement in board activities, committees.

•Thinking and acting strategically; not involved in day-

to-day management of the organization.

•Abiding by the Duties of Care, Loyalty and Honesty.

•Supporting the organization both financially and

through advocacy.10

Responsibility of Governance

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Strategic Direction

The Board has Ultimate Responsibility for Setting the Organization’s Strategic Direction.

• Annual planning retreat.• Strategic plan is kept alive.• Progress reports at every Board meeting.

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GovernanceThe Board has Ultimate Responsibility for the

Effective and Efficient Governance of the Organization.

• Policies and procedures for board operation. • Bylaws • Oversight (finances, planning, etc.)• Training (orientation)

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Mission and Purpose

The Board has Ultimate Responsibility for Ensuring the Organization Operates to Serve its

Mission and Purpose.

• Mission-driven decision making.• Mission printed on all board and committee

agendas.• Organizational culture prevents mission-drift.

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Habitat for Humanity International

Mission

Seeking to put God’s love into action,Habitat for Humanity brings people together

to build homes, communities and hope

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Evolution of Board’s Role

Then• Nonprofits should be run like a business• Manage day to day operations• Sage advisors of best practices

Now• Sophistication of the nonprofit work force• Board emphasis on strategy, sustainability,

advocacy• Big picture outlook 16

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For Profit vs. Nonprofit

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Nonprofit Resources

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• Best Practices• Support• Averages, Surveys

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Roles and Responsibilities• Board Members – Works as a team to support the

mission of the organization and creates the vision for the organization’s future.

• Board Chair – Acts as liaison between the Board Members and the Executive Director as well as the Board Members and each other.

• Executive Director – Acts as a liaison between the Board and the Staff and handles day to day operations for the organization.

See Section 6.02(d)

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Fiduciary Responsibilities

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Duty of Care“Board members must act as an ordinarily

prudent person would act under similar circumstances.”

Translation: • Board members must come to meetings

prepared.• The Board speaks with one voice and

respects the wishes of the majority.

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Duty of LoyaltyBoard members must put the interests of the

organization above their own.

Translation:• The Board has a conflict of interest policy

and consistently enforces it.

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Duty of HonestyBoard members must act in accordance with

the organization’s stated mission and applicable laws.

Translation:• The Board follows the bylaws, ensures

timely and accurate filing to regulatory bodies, reviews the Form 990 before it is filed, etc.

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Sarbanes-Oxley

• Adopted in 2002 for publicly-held corporations.• Financial Transparency • Conflict of Interest• Many recommendations adopted in newly

revised IRS Form 990.

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IRS 990

• First section of 990 is all about Governance!• Huge implications for nonprofit governance.• Transparency - 990 is a public document• Recommended – post on organization

website as well as GuideStar, Charity Navigator….

• Perceptions and Implications of Disclosures.• Conflict of Interest – Relationships

• Board members and their contact information listed on website• The Board should review and discuss in detail.

www.irs.gov.

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Policy “Musts”

• Conflict of Interest Policy

• Whistleblower Policy

• Document Destruction Policy

• Director’s & Officers Insurance 27

Responsibility of Board Management

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Board Orientation• Required for New Board Members• Governance and fiduciary duties.• Budget and financials (Form 990).• Strategic plan.• Board Member job descriptions • Commitment letter.• Mission, vision and core values.• Policies and procedures.• Conflict of interest.• Connections! Networks! 29

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Habitat

Your Contacts

Another Board Member’s Contacts

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Hold Effective Board Meetings

• Board Chair leads the meetings• Board responsible for board documents

and sends agenda, minutes, financials, reports prior to meeting.• Use Consent Agenda• Delegate committee work to committees.• Use Robert’s Rules.• Stick to the agenda.• Begin and end on time!• Executive session at each meeting!

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Annual Planning Retreat

• Review mission, vision, core values every 3-5 years.• Assess current strategic plan.• Long term vision - 12 month plan of work.• Focus forward, build consensus.• Develop action plans with accountability

and time lines for achievement.• Team building and fun!

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Establish Effective Committees

• What is required to achieve the annual plan of work?• Committees do the day to day work and report

to Board via Committee Chair (Board Member)• Action plans shared with full Board.• Assess progress at every meeting.• Sunsets.• How will you use to select committee

members? • Executive Committee

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Board Tenure • Term Limits. Term Limits. Term Limits.• New blood, ideas, connections, $$$’s• Remove deadwood• Hold board members accountable

• Average tenure is 3 years, renewable once.• Retire to Advisory or Emeritus Status.

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Advisory Boards• Allows board members an place to land at the

end of their term• Keeps them engaged and committed• Create a written description of the advisory

board’s responsibilities and the expectations for its members.• Assign a liaison from the official board of

directors.• Commit the time to work with the advisory

board so that “advisory board members [don’t] feel ignored or superfluous.”• Hold annual meeting, send updates.

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Board Commitment Letter

• Restate job description.• Sign annually.• Make financial/or other commitment.• Escape clause: I agree that if, at any time, I

am unable to fulfill the commitments as a member of the board of directors, I will give notice of my resignation to the president of the board.

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Deal with Unproductive Board Members

• You get what you accept and what you reward!• Term limits.• Commitment letters.• Keep performance expectations high.

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Responsibility of Board Recruitment

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ExpectationsEnsure a Consistent Message About

Expectations, Roles and Responsibilities• Develop a Recruitment Packet:• Time requirements in detail.• Talent – serve on Board committees.• Treasure – make annual contribution.• Other: Roster, annual report, financials,

fact sheet, history, accomplishments, etc.

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Ongoing Nominating Committee

Tools for the Effective Nominating Committee:• Matrix • What skills are needed?• When are they needed?• Who? Brainstorming.• Relationship to organization?• Plan to recruit.• Discussion…what do you need?

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Board Recruitment Matrix

• Access the current board members based on • Skills• Contributions• Contacts

• Identify what is missing• Is the board diverse based on gender, race,

economic means, area of town, others?• Does the board reflect the community?• Consider a client as a pro bono board

member. 41

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Effective Board Recruitment

• Recruitment Basic:• Time• Talent• Treasure

Every board member contributes some of each attribute.

Use LinkedIn Board Connect - http://nonprofits.linkedin.m/ 42

Responsibility for Financial Sustainability

and Advocacy

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2013 Giving USA Report• Charitable giving increased 3.5% • Giving by individuals increased by 3.9 %• Giving by bequests declined by 7.0%• Giving by foundations increased 4.4%• Giving by corporations increased 12.2%• Giving to religion is largest 32%• Giving to education and human

services13%• Giving to foundations10%• Giving to health organizations 9%• Giving to arts and cultural organizations 5%

http://store.givingusareports.org

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2013 Giving USA Report

• Giving by Individuals - 72%

• Giving by Foundations – 15%

• Giving by Bequests – 7%

• Giving by Corporations – 6%

http://store.givingusareports.org

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Effective Fundrai$ingSuccess Rate• Individual

Contributions• Bequests• Grants• Corporate donations• Special Events*

Amount of Staff Time • Special Events*• Corporate

donations• Grants• Bequests• Individual

Contributions46

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Special Event Fundrai$ers

Which of these is the real purpose of a special event?

1) To make as much money as possible!

2) To use the event as a way to market our mission to cultivate

potential new donorsand if we make a profit, all the better! 47

“Friend”raising Board • Board members introduce “friends” to Executive

Director• Board member follows meeting with phone call or

note to “Friend”.• With permission, “Friend” is added to organization

communications.• “Friend” is invited for tour of organization to see

programs in action.• Board member follows tour with phone call or note to

“Friend”.• “Friend” is invited to call to action event.

501c³ - Taking Nonprofits to the Third Power mbharrington64@hotmail.com 48

Talk Story • Identify four or five supporter types/profiles• Have board members call donors and ask:• What is it that we do well?• How did you get engaged in our cause?

• Two things emerge:• Rebuilds the connection because it reminds them

why they care about your organization• Identifies what programs people want

• Use social networks and social media to reach new people!

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Habitat

Your Contacts

Another Board Member’s Contacts

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Advocate Everyday• Once a week tell someone about Habitat• Be the “go to” person for information on

Habitat• Effective board members serve on one board

at time• Loyalty• Faith Based Organization• School• Habitat

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The Brave New World

Strategize for the New Demographics

• Silent Generation – Involvement because it makes you a better person• Baby Boomers – Involvement to see specific impact• Millennials (soon to become new participants!) –

Involvement to be a part of something, to do something or be with someone. Web 2.0!

“How do you entrust your brand to individuals to create community around themselves in the name of your brand?” – Marc Chardon, Former Blackbaud President & CEO

http://www.nonprofitquarterly.org/management/21603-focus-and-connect-blackbaud-ceo-sees-big-opportunity-in-downturn.html 501c³ - Taking Nonprofits to the Third Power

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Web 2.0 Engagement

• Web 1.0 Events We decide the day, time and location, provide the

tools, day, set the course, you show up and

bring your $$$- Car Wash

• Web 2.0 Events You create your own social experience and

project our brand through it…

- Let’s have a car wash!

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Web 2.0

• Web 2.0 – Created by individuals themselves.• Positive + They not only donate, but advocate,

volunteer, initiate programs and activities.• Negative – Short timer, desire full

responsibility, know everything.

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Responsibility of Evaluation

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Leadership Evaluation

Daring to Lead study indicated, that of those surveyed 67% of nonprofit executives anticipate

leaving their positions within five years. http://daringtolead.org/

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Executive Evaluation

• Assign a board committee to manage Executive Director (ED) evaluation.• Have ED review the process and instrument(s) prior to the

start. • Collect evaluation from all board members rather than

compile an "average," report actual responses.• Host a special executive session of the board to discuss

the survey results and comments in general with the ED.• Allow ED to respond (in person or in writing) to the full

board and response is placed in the executive's personnel file.

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Chief Executive Succession Planning

• Begin the succession planning process as soon as a new chief executive joins your organization• Create a system that ensures the organization always

has an up-to-date succession strategy• Identify five succession planning steps to take prior to

the executive search• Identify six key issues for the board to address during

the executive searchwww.BoardSource.org

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Board Bless and Release

• Misrepresenting the organization, by saying negative things about the executive director, staff, or other board members to members of the public or press.• Doing media or public relations work without the

knowledge of anyone else in the organization• Misunderstanding or taking no part in the fundraising

aspects of their role on the board• Being difficult to work with, due to their overall

negativity or lack of willingness to help• Not attending board meetings, creating a knowledge

vacuum where they cannot make decisions based on facts

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What Will Be Your Next Step?

• Board Development: Develop Job Descriptions, Board Orientation, Recruitment New Board Members• Board Management: Hold Annual Retreat,

Keep the Plan Alive, Establish Committees• Strategize to Engage New Donors: Engage

friends and colleagues in the organization’s mission, Talk Story• Executive Evaluation: Welcoming New

Leader, Leadership Evaluation61

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Pivotal Point

62Series10

0.1

0.2

0.3

0.4

0.5

0.6

Option 1 -Stay the course

Option 2 - React to change

Option 3 - Plan for change

Nonprofit Resources

Favorite Nonprofit Websites

• GrantStation – www.grantstation.com

• Chronicle of Philanthropy - www.philanthropy.com

• Nonprofit Quarterly - www.nonprofitquarterly.org

• Blue Avocado – www.blueavocado.org

• BoardSource - www.boardsource.org

• Idealware – www.idealware.org

• TechSoup – www.techsoup.org

• Nonprofit Risk Management Center – www.nonprofitrisk.org

• Independent Sector – www.independentsector.org

• C-Forward – www.cforward.org

• Texas C-Bar – www.texascbar.org501c³ - Taking Nonprofits to the Third Power

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501c³ - Taking Nonprofits to the Third Power

• Programs for Conferences and Resource Centers• Customized Programs for Individual Nonprofits• Strategic Initiative Retreats for Nonprofit Boards• Nonprofit Interventions for Staff, Boards and Volunteers• Certified ToPs (Technology of Participation) Facilitations• Qualified LeadershipPlenty Courses• Constant Contact - Authorized Local Expert• Certified CCAT (Core Capacity Assessment Tool) Evaluations• Association Management Consulting Targeting Membership Growth

Dynamics• Volunteer Program Assessments• Free Nonprofit Career Counseling for Universities as well as

Individuals• Free Nonprofit Referrals and Resources

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501c³ - Taking Nonprofits to the Third Power

• Volunteer Management Services• LeadershipPlenty Modules• Nonprofit Management Courses• Strategic Planning• Succession Planning• Change Management• Advocacy• Understanding the Nonprofit Sector• Social Media & Marketing Courses

Our services start with a free conversation to access your situation; together we then determine what elements of support you may need and provide you with an

individualized proposal based on those needs and budget. Through our skilled diagnosis, we ensure that you receive the level of support you need at a price your

agency can afford.

Our mission is to Unleash the Power of the Nonprofit Community by generating Confidence, Competence and Collaborations!

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PROSPERITY PARTNERSWho We Are: Highly experienced professionals who share a common goal: helping nonprofits achieve success and sustainability in a challenging economy.

What We Do: Provide a wide range of services for nonprofit managers, board members, and volunteers including conference presentations, training meetings, on-site workshops, webinars, strategic planning and facilitations sessions.

What We Offer: Affordable, personalized consultations and services tailored specifically to help you achieve your organizational goals 67

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PROSPERITY PARTNERSCAPACITY BUILDING• Nonprofit Tune-Up: Evaluate your

organization’s viability and where to focus for improvement

• Building Capacity• Public Relations and Community

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Community Partnerships• SEO for Nonprofits• Getting Started with Online Video• Getting Started in the Nonprofit

Cloud• Online Fundraising: Beyond the

Donate Button

FUNDING AND RESOURCE DEVELOPMENT• Grantsmanship 101: Developing

Strategies for Successful Proposals

• The Write Stuff: An Intensive Workshop on Proposal Preparation

• The American Idyll: How to Compete for Funding and Win!

• Volunteers: Managing Our Most Valued Resource

• Special Projects and Special Events: Dollars or Sense? 68

Advice and Counsel are Free!

501c³ - Taking Nonprofits to the Third PowerMary Beth Harrington

mbharrington64@hotmail.comwww.mbharrington501c3.com

972-839-9960