Nonprofits with strong boards outperform peers. Here’s how to improve yours.
- Nonprofits with effective boards are notably more sustainable, so tap your board as a resource to help your organization adapt to challenges like funding uncertainty, the fast-changing tech environment and growing constituent needs.
- A more active working board can offer your nonprofit smarter strategic leadership, valuable relationships, access to new funding opportunities and even hands-on skills.
- Your CEO or executive director can help by getting more involved with board recruitment, ensuring members receive governance training and encouraging your board to provide ongoing strategic oversight.
In an era of rapid change, nonprofit leaders are rightfully asking big questions about how their organizations can become more sustainable. But one key area of opportunity often gets missed: your board.
A strong board is one of the biggest predictors of a nonprofit’s long-term sustainability. More actively engaged board members can help your organization improve both funding and impact, helping you adapt to meet today’s challenges.
Keep reading to learn more about how to turn your board into an asset.
Why do nonprofits need more active working boards?
The nonprofit sector is in the midst of a major shakeup. Uncertainty over funding, fast-changing tech, higher donor accountability standards and rising constituent need are creating new pressures for nonprofits and call for more effective board governance.
Here are some of the key challenges organizations currently face:
- Funding uncertainty: Between federal grant pauses, potential cuts and higher accountability expectations, many organizations are having to reevaluate how they approach funding. For some nonprofits, relying solely on government grants is no longer a sustainable option.
- Rapidly evolving tech: Newer technologies like AI, automation and cloud-based ERP platforms are fundamentally changing how nonprofits operate at the organizational level. Leaders need the vision and resources to consider big questions about what a modern nonprofit organization actually looks like.
- Increased demand for services: Constituent needs are rising in many areas, especially as the federal government has stepped away from many of its traditional social service roles. To help fill the gap, organizations have to figure out how to expand their reach even as their own funding may be more limited.
- Staff cuts: Funding challenges have forced staff cuts within some organizations. This has left essential roles open and unfilled.
In this environment, nonprofits should look to more active, engaged governance as an untapped resource. Boards that remain in passive oversight mode may not be fully able to help their organizations meet the moment.
So how should your board adapt?
What does an active nonprofit board actually do?
Boards have always worked with nonprofits’ executive leadership to set strategy and keep an eye on financials. But an active working board serves as a true strategic partner to your CEO or executive director: regularly evaluating strategic performance, refining long-term vision, building relationships with community leaders, partners and donors, and identifying new funding opportunities.
Active strategic leadership
An active board is consistently considering how your nonprofit’s overall strategy is working. This includes reviewing KPIs, communicating with stakeholders and assessing overall impact. In this model the board can help course correct much more quickly if a strategic approach is falling short, making your organization more nimble and adaptable.
Building essential relationships
One of your nonprofit’s most valuable resources is simply who your board members know. Board members can help your organization develop relationships with local elected officials, donors, strategic partners and other potential allies. This can not only create opportunities, but help to bolster your nonprofit’s reputation in your community and beyond.
Identifying funding opportunities
As federal funding becomes less reliable, nonprofits need new sources of income to make up for current or potential shortfalls. Board members can take a lead role in identifying new financial opportunities by leveraging relationships or collaborating with your leadership team on developing your funding strategies, and may also help lay the groundwork for more innovative solutions like an M&A.
Providing specific skills to fill gaps
Finally, as budgetary pressures have led to staff cuts or key roles left unfilled, board members can provide expertise to fill in critical skills gaps. For example, board members with experience in finance or accounting can help with forecasting, allowing you to explore different possible strategic options before choosing a path forward.
However, an active board doesn’t spring to life out of nowhere. So what can you do to nurture one?
How do you help your nonprofit’s board take on a more active governance role?
Developing an active working board often starts by nurturing a collaborative partnership between your CEO and board chair. Here are more key pillars to the process of creating a more active nonprofit board:
1. Recruit outstanding board members
Effective boards typically recruit outstanding board members. Get top people for yours, too. Invest time and energy into this effort and build value by helping board members understand how serving on your board is a mutually beneficial experience both the member and your organization.
2. Create a pipeline of potential members
Many organizations only think about filling a board seat after a current member has stepped aside, making the process a scramble with limited options. Get out ahead by creating a pipeline of potential members with an eye toward skills, diversity and community representation. This makes it easier for your nonprofit to maintain continuous, effective leadership.
3. Provide effective governance training
Nonprofit board members typically benefit from more effective governance training, specifically around their duties and responsibilities to your organization. To deliver impact, your board members need to know how they can actively contribute to your organization.
4. Improve communication
Your executive leadership should maintain active, open lines of communication with your board. Have one-on-one conversations with individual board members to get their perspective on how your organization is doing and discuss the challenges your face. Ask them what else they need from your team to contribute more, like additional data on how your organization is performing.
5. Engage your board more in strategic planning
Don’t just gather your board once a year for a strategic planning session. Make it an ongoing exercise, meeting regularly to discuss impact, performance and strategy. This will allow you to make your strategic plan a living document that you can quickly adjust when needed.
6. Help members get their hands dirty
Board members don’t know what they don’t know. Encourage them to get their hands dirty by volunteering inside your organization, especially in areas where they can help you fill in skills gaps. This will help them better understand your daily operations while also providing needed help.
7. Do board self-assessments
Encourage your board members to do annual self-assessments so you can identify training needs. This will allow you to create a more cohesive development plan for your board, which can then also be used to facilitate the onboarding process for new members.
How Wipfli can help
We advise nonprofit organizations on navigating change, strengthening financials, compliance and growth. Let’s talk about your goals and how strategies like developing a more engaged board can help you achieve them. Start a conversation.
Let’s make your nonprofit stronger
