According to a report by the Urban Institute, The Nonprofit Sector in Brief 2014: Public Charities, Giving, and Volunteering, approximately 1.44 million nonprofits were registered with the Internal Revenue Service (IRS) in 2012, an increase of 8.6 percent from 2002, with the nonprofit sector contributing an estimated $887.3 billion to the US economy in 2012, composing 5.4 percent of the country’s gross domestic product (GDP). These numbers are on the rise, and the sector is rapidly becoming a force with which to be reckoned. Given this information, it supports the argument that a well-defined, trained, and functioning nonprofit leadership team is not only good for an individual nonprofit’s outcomes, but, potentially, for the long term outcomes of our nation. One could even argue that serving on a nonprofit board may be one of an individual’s most significant civic engagement activities, and certainly not a service to be entered into lightly.
What is a Nonprofit Board?
The board of directors is the governing body of a nonprofit organization. The responsibilities of the board include discussing and voting on the highest priority issues, setting organizational policies, and hiring and evaluating key staff. Board members are not required to know everything about nonprofit management, but they are expected to act prudently and in the best interests of the organization. They approve operating budgets, establish long-term plans, and carry out fundraising activities.
Finding desirable board members can be a difficult task. A good board member is someone who is interested in the organization’s purpose, willing to work within a group, and be in a position to make financial contributions to the organization, or to find others who will. Inviting prominent members of the community to join your board can attract interest, excitement and prestige to the organization. It is also desirable if board members are well known in the field in which the nonprofit organization functions, and it can be extremely beneficial if they have expertise in areas such as real estate, nonprofit law and accounting. For example, having someone on your board who is savvy on real estate matters can be quite helpful when complex issues arise down the road, such as negotiating leases or purchase contracts.
Source: Foundation Center
What are the responsibilities of a Nonprofit Board?
The National Center for Nonprofit Boards has issued a paper on “Ten Basic Responsibilities of Nonprofit Boards” to clarify the roles and responsibilities of the board as a corporate or collective entity and to summarize individual board members’ responsibilities. In addition, five assumptions are listed at the end of this article to reduce the many questions surrounding effective board leadership.
The ten board responsibilities which follow, along with the individual board member’s responsibilities, strive to set criteria by which boards may periodically review their performance and ensure a measure of accountability.
Source and complete article – click here
The Relationship Between the Nonprofit Board and Its Chief Executive
Organizational success in the nonprofit arena requires an engaged and accountable board, sound strategic direction and “real time” organizational agility – all of which hinges on a balanced cooperative partnership between the nonprofit board of directors and the organization’s chief executive. Nonprofit organizations blessed with effective boards and chief executives who work well together focus attention on creating and sustaining excellent relationships. While the following ten elements will need to be customized to each nonprofit’s unique structure and culture, they can guide boards and their chief executives in actively developing a strong partnership:
The history of nonprofit board and chief executive relationships has evolved considerably. Originally, in the United States, nonprofits were exclusively voluntary organizations and all power accrued to the board. As a nonprofit grew, the voluntary leadership might appoint an individual to administer the organization. Often that person’s title was “secretary,” which was common into the 1950s. Even in large nonprofit institutions, board members tended to be greatly involved in the range of day-to-day affairs.
As nonprofits continued to grow in sophistication and size, responsibilities and powers gradually shifted to the chief executive and “best practices” management concepts from for-profit counterparts were introduced.
“The unique and multifaceted relationship between the board and its executive is perhaps the most important relationship leading to organizational success or failure. Like the two partners in a skating competition, each side can either bring out the best in the other or prevent the other from skating well.” Jan Masaoka
Click Here for the Full Report by Jan Berry and Gary Stern, as well as Source Information.