I’ve had the privilege of working with many nonprofits during my career, from the smallest human services agencies to large colleges and universities. It has been a great pleasure to watch a number of them start as fledgling nonprofits and grow into highly successful organizations that meet important needs in the communities they serve.
Some of these nonprofits haven’t just survived … They have thrived. What sets these nonprofits apart? How is it some nonprofits stand the test of time, regardless of the financial climate of the day? Is there a single theme that runs through all high performing nonprofits?
High performing nonprofits all exhibit good governance. Governance is an essential element of the leadership of nonprofit organizations, and the boards of directors who engage in the work of governance are central to the success of the organizations they serve.
Since governance is primarily the responsibility of an organization’s governing board, it’s helpful to consider six pillars of effective governance that high performing nonprofit leaders exemplify:
1. Understand and provide effective fiduciary oversight – While appropriate policies and procedures may be in place, it is essential for board members (or committees) to review financial statements, audits, investments and compensation either monthly, quarterly or annually as appropriate.
2. Review and amend governing documents – More than once I have reviewed an organization’s bylaws only to find another nonprofit’s name somewhere in the document. This is a clear sign that bylaws for one nonprofit were used for another, quite possibly without thorough review. High performing nonprofits and their respective boards conduct regular review of governing documents and they amend them accordingly as the organization evolves.
3. Hold senior leadership accountable – An annual performance review of the CEO is essential. Likewise, the board of directors should complete a board assessment annually, and be willing to take corrective action when necessary.
4. Document all actions appropriately – It is essential to maintain minutes of every meeting, particularly those where action was taken. Consider maintaining both electronic and hard copies of all minutes and file them chronologically.
5. Seek diversity of board and staff – Diversity of skills, backgrounds and experience will add valuable perspectives to your board. Commit to recruiting board members who represent various stakeholder groups, as opposed to simply rounding up the usual suspects.
6. Review core programs to ensure they align with mission and vision – Programmatic oversight is like financial oversight … It is essential.
Good governance and ethical practices will ensure your nonprofit fulfills its mission, lives up to its values, and remains viable for the future.