Nonprofits typically sound simple in theory. People from all walks of life come under one mission and aim to reach the nonprofit’s goals. However, just like any group of people, conflict can arise and lead to difficult times for the organization.
Nonprofit boards typically have a diverse group of individuals, which means different biases might be stirred up during meetings. Constant disagreements and inefficient use of time during board meetings will send ripple effects across the nonprofit. Thus, board members must be cognizant of their role as organizational leaders, in addition to avoiding the causes of bad board governance.
Summary
Expectations for the Board
The expectations of a board must be taught whenever new board members go through training or addressed at least annually for current board members. When assembling a nonprofit board, it is impossible to predict the specific issues that will arise in the future. 
However, hiring individuals that are accountable and reliable to the board will minimize the social tension that can ensue.
Most board members are constantly driven to achieve the organization’s mission, but throughout their time working or volunteering they can lose focus of reaching the goal. That is why it’s important for executive directors to be consistently inspiring and vocal about the standards the nonprofit holds for its board members.
Causes for Bad Board Governance
Nonprofits go bad in large part due to the bad governance of the board. There are several factors that can create a bad boardroom culture. Failing to keep board members accountable, avoiding difficult conversations, and micro-managing too much, are all examples of bad board governance.
The main cause of this unproductive culture is the lack of effective leadership involved from both the executive director and the rest of the board. When distinguished leaders within the organization fail to cultivate a productive working environment, the blame can be placed on no one besides the inadequate board.
Improvement Towards a Better Board
As leaders of an organization, board members must constantly strive to improve their leadership skills. With proper leadership training, board members will learn useful governance skills that will be applicable in board meetings. Leaders that are aware of their fiduciary duties, strategize the nonprofit’s future, and strive to improve themselves for the betterment of the nonprofit, will be the catalysts for organizational success.
It is important to recruit board members for their leadership characteristics and their diligence within the organization. Furthermore, it is important to create terms for board members that last 2-5 years, as it allows the nonprofit to learn and implement new methods from new board members. A constantly improving and innovative organization will always be attractive to donors.
A nonprofit can have years of success and then slowly drop off, primarily due to the stagnancy of the board. A board of directors must consistently improve themselves and look for ways to further the organization’s growth. Good governance begins with the right people being placed in positions that carry a magnitude of responsibility. It is of the utmost importance to devout time in molding the leaders of an organization to prevent a board disaster before it’s too late.
Financing Solutions Nonprofit Line of Credit
Since 2012, A+ 5-star BBB-rated and a leading provider of business loans for nonprofits in the form of a 501c3/not-for-profit line of credit, Financing Solutions has been the leader in providing nonprofits with a line of credit that is easy and inexpensive.
Unlike a bank, Financing Solutions does not require any collateral or personal guarantees which has always been the biggest stumbling block for nonprofits.
Nonprofits will often use their line of credit as a cash backup plan when cash flow is down and when important bills must be paid. The line can be used and paid back at any time.
The nonprofit credit line costs nothing until used and is inexpensive when needed. If your nonprofit is doing at least $200,000 per year in revenue then you will probably be qualified.
The application is online and takes 2 minutes to fill out requiring no documents for a written offer letter. There are no credit checks done for the application and you will be sent a written offer letter to consider. The FS Relationship Manager will call you to answer any of your questions.
The time to set up a credit line is when your nonprofit doesn’t need it. You can find the 2-minutes online nonprofit line of credit application here.
