Board Members: 3 Tips for Allocating Nonprofit Resources Objectively
Nonprofit board members are usually unpaid members of the community given the strenuous and often controversial task of deciding where charitable donations will do the most good. The donors to your organization, as well as the public you serve, trust in your honest stewardship of funds and resources.
In order to maintain trust in your nonprofit’s mission, you need to remain objective in all your board duties, especially when it comes to allocating resources. Objectivity can be hard to achieve, especially with a diverse group of board members. Keep in mind that board members often come from drastically different backgrounds. You can use this to your advantage—embrace your board’s diversity and never forget your organization’s overall mission.
Here are 3 tips to help you remain objective when allocating resources.
1. Encourage robust and open dialogue
Time is often limited during board meetings, especially if you only meet once every month or every quarter. Even if you’re working under a time crunch, high quality dialog and debate in the boardroom is vital. If you don’t allow for dissent and vigorous debate, you may be missing out on a crucial perspective you otherwise wouldn’t have addressed.
Nonprofit boards, because of their charitable mission, are sometimes wary of conflict. It may be necessary to encourage “conflict” at times, with the intent of getting board members engaged in open dialogue.
2. Discuss possible conflicts of interest
Conflicts of interest come up all the time in nonprofit board meetings. Board members are typically volunteers who are active in the business community, and it’s only natural that their professional and personal lives will sometimes conflict with the nonprofit’s processes.
The best way to handle conflicts of interest is to have a written conflict of interest policy as well as a process for addressing potential conflicts. In fact, IRS form 990 requires you to have both a written policy and a process for managing conflicts.
A conflict of interest policy should:
- Require disclosure
- Prohibit members from voting on matters where there is a conflict of interest
Your process for managing conflicts should encourage disclosure and discussion of possible conflicts of interest within your board meetings. You may also discuss hypothetical situations and promote awareness of potential problems.
If you’re used to taking risks in the private sector, the slower pace that nonprofits often function at may be frustrating. But even for smaller organizations, nonprofits are subject to stringent guidelines and laws that can make it difficult to get things done right away.
An organization’s nonprofit status depends on vigorous financial reporting and transparency. This doesn’t mean that you shouldn’t take risks—your mission depends on you using your business acumen and entrepreneurial skills in order to succeed. Just keep in mind that you’ll be required to exercise patience in order to enact meaningful change.
Remember: the mission is your bottom line
Bold moves and giant risks are often rewarded in the private sector, as long as they improve the bottom line. But the bottom line of your nonprofit organization is its mission, not profits. Your charitable mission should be at the forefront when making any kind of decision about funds and resources.
Your nonprofit’s mission is as unique as its individual board members. Each board meeting should be a rewarding experience, as long as you are dedicated to open dialogue, addressing potential conflicts of interest, and taking the necessary risks to help your organization succeed.
2nd photo courtesy of DCLG