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What are the Best Tips for Not-For-Profit Governance?

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  • Written By: Dale Marshall
  • Edited By: Kristen Osborne
  • Last Modified Date: 01 November 2017
  • Copyright Protected:
    2003-2017
    Conjecture Corporation
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Not-for-profit governance falls to two different and sometimes opposing groups of people — the directors, who are responsible for the formulation of goals and policy objectives consistent with the organization's mission, and those responsible for the organization's day-to-day operation. It's the board's responsibility to articulate the organization's mission and develop policy and programs to achieve that mission, and to oversee the implementation of the policies and programs. It's the job of the day-to-day staff, though, to carry out that policy and operate the programs. Conflicts will inevitably arise; successful not-for-profit governance involves anticipation of disagreements and their smooth resolution. It is also advisable for the staff to operate the nonprofit using techniques used to run successful profit-oriented businesses.

A critical factor in not-for-profit governance is the unity of purpose between the organization's day-to-day staff and its directors. The board is responsible for hiring the CEO and sometimes other key executive staff, and those officers are responsible for the other hiring necessary to complete the organization. Some positions will require a deep understanding of, and commitment to, the organization's mission and goals, while others, such as financial staff, IT professionals, and mailroom staff, are hired for their technical qualifications in fields unrelated to the organization's mission. Nevertheless, the morale and the sense of ownership of all staff members will be enhanced if the organization's leadership makes a point of educating all in the organization's purpose and aims. In many cases, employees of not-for-profit organizations have little real sense of what their employer does or the role it plays in society.

Every organization starts out with a mission, but changing times require that the mission sometimes be modified to meet the demands of a new age. This is done in ways large and small. For example, when their official mission was changed to include the use of aircraft, the United States Marines changed a line in their official hymn to recognize that fact: “We will fight our country's battles in the air, on land, and sea.” When an organization decides formally that its mission has changed, that fact must clearly and persuasively be articulated and communicated. If a nonprofit organization changes the focus of its activities to reflect a changed mission and fails to communicate the reason to its supporters, for example, it may lose critical financial support.

Another crucial element of success of not-for-profit governance is strict attendance to financial affairs. Those organizations that depend on fundraising for their revenues must budget carefully and establish goals and time lines. When revenue goals aren't realized, the board must reevaluate its budget and make adjustments, either by drawing on resources to make up the shortfall, increasing its fundraising efforts, or modifying its planned spending. Likewise, successful not-for-profit governance requires that financial activity be closely monitored. Misappropriation of funds and other corrupt activities are as much an issue for nonprofit organizations as they are for any other.

Not-for-profit organizations must operate efficiently; that is, like a business. Just because “making a profit” isn't part of their mission doesn't relax that responsibility. Not-for-profit organizations comprise a significant portion of the economy. They employ people, paying their wages and funding their benefits exactly the same as their profit-oriented counterparts. Nonprofit organizations that allow themselves to think that because they're not in business to make a profit, they needn't be attentive to maintaining a businesslike operation, are falling into a trap it might be impossible to get out of.

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