Effective Board Leadership

1
Effective Board Leadership

• The Management Assistance Program
• United Way of the Texas Gulf Coast

2
Objectives

• Gain Perspective on Nonprofit Sector
• Review Roles of Board members
• Explain Legal Duties
• Understand Fundraising Responsibilities
• Discuss Techniques of Effective Boards
• Identify Keys to Nonprofit Leadership

3
Just the Facts

• 1.1 million nonprofits in U.S.
• 14,000 nonprofits in Houston area (20)
• 501 (c)(3)s raise more than 124 billion annually
• Charitable appeals account for 1 of every 4
  pieces of U.S. Mail

4
2003 Giving 241 Billion( 2.8 over 2002)

• Individuals 74.5
• Foundations 10.9
• Bequests 9.0
• Corporations 5.6
• Source Giving USA 2004

5
Causes Supported

• Religion (35.9 )
• Unallocated (10.0)
• Education (13.1)
• Health (8.7)
• Human Services (7.8)
• Arts and Culture (5.4)
• Public/Social Benefit (5.0)
• Environment/Wildlife (2.9)
• International Affairs (2.2)
• (may not add up to 100 due to rounding)

6
Why Serve on a Nonprofit Board?

• Make a contribution to society
• Meet/network with new people
• Gain new skills
• Believe in mission of organization
• Personal growth
• Professional development

7
Basic Roles of a Nonprofit Board

• Determine the organizations mission and purpose.
• Select the Chief Executive.
• Support the Chief Executive and assess
  performance.
• Ensure effective organizational planning.
• Ensure adequate resources.

8
Basic Roles (cont.)

• Manage resources effectively.
• Determine, monitor and strengthen the
  organizations programs and services.
• Enhance the organizations public standing.
• Ensure legal and ethical integrity and maintain
  accountability.
• (Recruit) and orient new board members and assess
  board performance.

9
Legal Duties of Board Members

• All board members have the duties of Care,
  Loyalty and Obedience.
• defined by case law
• legal standards against which all actions taken
  by board members are held.
• Accountability is demonstrated through the
  effective discharge of these duties.

10
Duty of Care

• Be reasonably informed about the organizations
  activities
• Participate in good-faith decision-making
• Exercise care of an ordinary prudent person.

11
Duty of Loyalty

• Exercise power in the best interest of the
  organization avoid self-interest
• Affirm conflict of interest policy
• Adherence to policy
• Full disclosure
• Abstention from discussion and voting

12
Duty of Obedience

• Comply with applicable federal, state and local
  laws,
• Adhere to the organizations by-laws
• Remain guardian of the mission.

13
Understand Financial Data

• Prepare/approve a realistic budget
• Read and really understand financial reports
• Request clarification
• Monitor closely

14
Ensure Financial Stability

• Determine current revenue sources
• Actively seek to identify new sources of revenue
• Support the organization monetarily
• Enhance earned revenue activities

15
Manage Risk

• Assess exposure
• Maintain appropriate insurance coverage
• D O
• Exclusions
• Riders
• Special policies
• Oversee policies and procedures

16
Define Expectations

• Time commitment
• Meetings
• Committee work
• Events
• Financial commitment
• Cash
• In-kind contribution

17
Develop a Planning Process

• Mission and vision review
• SWOT analysis
• Goals
• Objectives
• Action plan
• Results

18
Manage Meetings Productively

• Establish committee structure
• Plan for effective use of time
• Consent agenda
• Meeting dates set annually to ensure a quorum
• Maintain good information flow
• Integrate technology (email, web site,
  teleconferencing, etc.)

19
What Donors Want

• Clear purpose
• Accountability
• Effective management
• Sound governance
• Community impact

20
Sources of Support

• Individuals (primary source of giving)
• Government (federal/state/local)
• Business
• Private foundations
• Nonprofit organizations (churches, professional
  organizations, service clubs, etc.)

21
People Give..

• Because they want to
• When they are asked
• To other people
• To opportunities (not needs)
• To success (not distress)
• To make positive change

22
How Donations Are Made

• Major gifts
• Annual giving
• Direct mail
• Program/project grants
• Special events
• Capital funds
• In-kind contributions

23
Board Member Checklist

• Believe in mission
• Understand case for support
• Make personal gift
• Share networks
• Assist with donor cultivation
• Participate in solicitation process
• Express appreciation personally

24
Keys to Nonprofit Leadership

• Adopt a business mindset
• Be open to new opportunities
• Monitor the competitive environment
• Use marketing effectively
• Ensure accountability
• Focus on excellence

25
A Final Thought.

• Be the change you want to see in the world.
• Mahatma Gandhi