Principles and PracticesFor Nonprofit Excellence
The Nonprofit Sector
1996-2005, 501c3 nonprofits increased by 50% to 1.5 million
Religious/education institutions and programs receive 46% of the sector gifts
Nonprofits in the State of Texas
1998-2008, number of organizations increased 44%
2008, population in Texas: 24.3 million people One nonprofit for every 242 people
The Nonprofit Board’s Legal and Ethical Obligations
Public Trust
Created for public philanthropic purposes
Standards of Conduct
Duty of Care
Duty of Loyalty
Duty of Obedience
Duty of Care
Go to meetings
Take responsibilities seriously
Read and understand documents
Ask questions
Know what organization does and how well
Duty of Loyalty
Disclose any conflict of interest
Focus on the organization’s best interests
Maintain confidentiality
Maintain loyalty
Duty of Obedience
Safeguard the mission
Maintain public trust
Manage operations and resources
Assess effectiveness regularly
Effective Governance
Board Responsibilities
Provide leadership and strategic direction
Set policy actively and ensure adequate resources
Provide oversight and direction for the executive
director
Review/approve annual budget and key financial
transactions
Recruit new members and provide orientation
Evaluate board’s own effectiveness
Planning
Set overall direction, activities, and strategies
Engage in sound planning
Define a clear vision for the future
Specify strategies, goals, and objectives
Incorporate input from constituents
Be intentional
Transparency and Accountability
Ethical obligation
Convey information regularly and openly
Information should be easily accessible
External visibility
Public understanding and trust
Program Oversight
Commit to effective, efficient delivery of services
Strive to improve
Understand each program
Approve annual plans and evaluations
Oversee program process and accomplishments
Fundraising
Develop a fund development plan
Be a donor
Monitor plan accomplishments
Help to identify and solicit donors
Support fundraising committee
Sell special event tickets
Attend the events
Financial Management
Act responsibly in managing financial resources
Use financial resources to accomplish mission
Keep current and accurate financial records
Engage an independent audit
Approve annual budget and review performance
Evaluation
Assess impact of actions and act upon this
information
Measure performance regularly against a clear set
of goals and objectives
Improve the quality of processes, programs, and
activities continuously
Share performance metrics with constituents and
the public
Board/Staff Responsibilities
Board
Hires, directs, supports and evaluates executive
director
Chair is the official link from board to executive
director
Staff and board act as partners, board is 51%
partner
Draft good policy collaboratively with staff
Executive Director
Operates under the board’s control and direction
Hires and supervises staff
Supports the board in developing its governing role
Acts as the bridge between board and staff
Staff
Paid and unpaid
Carries out the work of the organization under the
executive director’s guidance and supervision
An Effective Board
Strategy focuses on mission
Board work supports mission
Board determines policy, then staff implements it
Good management and governance result in a
competitive advantage
Questions?
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