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The Tell-Tale Qualities Of a Strong Board of Directors. Nonprofit MBA Podcast 3.6

In today’s podcast episode, Stephen Halasnik and CEO of Pink Trumpet Hawwa Muhammad talk about what it takes to put together an exemplary Board of Directors for any non-profit. Having a good Board of Directors is crucial to a non-profit’s success, and hinges on the proper allocation of work, great organization, and impeccable hiring. It is important to understand the core values of your non-profit to be able to put people to work for those values in action. Whether you are a new nonprofit looking to build the best board possible, an existing nonprofit looking to dig their board out of a hole, or an existing full board looking to improve their practices, this advice will help your nonprofit boards flourish.

The Perfect Boardroom

Finding the right board members, especially for a new nonprofit organization, is no easy task. In addition to finding individual board members that can support the various ventures your organization has to carry out, you also need to find a suitable Chairman and Executive Director. These jobs are almost always mutually exclusive and involve two different approaches for good governance, so they require specialized people. There are many creative ways to recruit members of the board. One of the most common ways to find people who are passionate about volunteering their time or money to your organization is at nonprofit gatherings and fundraising events or with an organization like BoardSource. However, before you can go searching for your perfect team, you must first have a clear idea of your team’s requirements. Just like you wouldn’t apply for a job without a job description, a board member shouldn’t join your board without an understanding of their duties and what they will bring to the table. It is easy to place members on the board haphazardly, especially when large funders and stakeholders are involved, but taking the extra step to really make sure the person who gave that donation would be a good board member as well as the key to creating an effective board. Don’t just settle for basic competency or assume you have a fiduciary duty to make your top donator the Chair. The type of work you are expecting from a new member may vary depending on your size and mission. These are things you need to consider before approaching any potential board member. Make sure you create an effective rubric and bylaws that your board members must meet in order to be worth bringing on. Include your current staff in the selection process as well. Have potential members be honest with you about what they can and can’t contribute. That way you can place them in the most beneficial position possible.

Finding a Leader

As mentioned above, two of the most important roles to fill on your Boards of Directors are the Board Chair and the Chief Executive Director. The roles work symbiotically, however, they are independent directors and their functions work in entirely different ways. Nominating excellent stewardship in these positions is essential to the success of your nonprofit organization. The Board Chairman needs to be able to delegate, working with the board to see objectives get done. The Chairman needs to follow up and make sure things stay on track, run great board meetings, and make sure that the board can function even if they aren’t there. They have to be able to communicate effectively as well. Board members are not employees: they are professionals who are most likely not receiving pay and should be treated as such. On the flip side, the Executive director needs to be able to effectively communicate between the staff and the board. Directors should be planners, and they need to make decisions, lay out a timeline with benchmarks, and create a strategic plan of what needs to get done. They need to be able to have an open dialogue and do strategic planning and decision-making with the Chairman about issues and conflicts-of-interest so the Chairman can transmit those words to the board. Having good leadership skills is not only confined to these roles of course but having them be the forefront of your team is a necessity. Your leadership hires define the perception of your organization. Reactionary hiring for these positions especially must be avoided at all costs. If you have champions leading your management team, your organization’s goals will be met.

The Next Generation

It is also important to remember that in most cases, board members cycle through every 2 years. Having your leaders and board members create impeccable onboarding resources. Effective onboarding is important for the longevity of the organization. Any new staff needs to know exactly what needs to get done to be doing as well as the last person who was there. This goes back to the idea that without processes of corporate governance in place that your staff and board can follow, successions will not be successful and your organization is destined to fail. This includes onboarding processes. Put together the best governance practices document for onboarding or make it an item for your board to discuss. Just putting a little time into creating their processes goes a long way. Depending on how long your nonprofit needs to achieve its goals or satisfy yours, you need to accept that your board is not permanent. Having talks early with your board members about term limitations and extensions is a great step to planning your nonprofit’s future. Investing time in looking for new board members is a lot of work. It is not something that you want to be devoting your resources to all the time. Therefore, having an accurate picture of your board’s “expiration date” can be a key to efficient work allocation.

About the Guest Hawwa Muhammad, Founder, and CEO of Pink Trumpet

Hawwa is the founder of Pink Trumpet, a social entrepreneur with a passion for helping others bridge creative ideas with sustainable strategies to achieve positive social impact. They help nonprofit organizations and people achieve their philanthropic and grantmaking goals by providing research and strategy.

Her interest in philanthropy is grounded in her 10 years of experience working in the nonprofit sector. What began as an internship at one of the largest grant-making organizations in West Africa led to a career exploring issues around best practices in philanthropy and the larger implications this has on the nonprofit sector. In addition to writing and developing content for organizations, Hawwa enjoys creating systems and launching strategies that help socially-minded causes think through and build a solid foundation for their work She holds a Master’s Degree in Public Administration at the Rutgers School of Public Affairs and Administration, and a Bachelor of Arts in Political Science from Rutgers University. Hawwa is based in Newark, NJ.

About The Host Stephen Halasnik, Financing Solutions

Stephen Halasnik is the host of the popular, The Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to nonprofits and small businesses.

Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik is a best selling Amazon author and is considered a leading authority on building great, purpose-driven businesses. Mr. Halasnik lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.

About Financing Solutions Nonprofit Line of Credit

Financing Solutions, an A+ and 5 stars rated BBB company since 2002, is a direct lender that provides lines of credit to nonprofits and small businesses.

Financing Solutions nonprofit financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.

Nonprofit Organizations use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding)

Please feel free to fill out the no-obligation, 2-minute nonprofit line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.

Note: Financing Solutions donates 10% of its profits to various nonprofit charities

 

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