Nonprofits face a myriad of issues, such as resource limitations, fundraising requirements and legal restrictions. The teams that govern these organizations are charged with keeping the demands in check. This is why nonprofit governance models matter so much.
Governance models for nonprofits organize the board’s activities and committees according to their functional requirements. For instance when there are staff members who are responsible for human resources, finance planning, and fundraising, the board can form committees to focus on these aspects, too. John Carver’s Policy Board Model popularized this management team model in the 1970s. It is most common among medium and small nonprofits.
While this model is effective, it can result in an overburdened board with responsibilities and struggles to make decisions. Many nonprofits are adopting other governance models which assign responsibility to individual members while requiring board members to meet regularly to ensure proper function.
Another important role of the board is establishing goals for the nonprofit’s strategic direction. This is accomplished by identifying urgent needs and issues and devising solutions the organization could explore. This is usually done with a SWOT analysis and an outcome evaluation strategy that includes specific metrics to assess the effectiveness.
The board must not only determine the strategic direction, but also select and evaluate the executive director. This is often among the most challenging tasks because it requires a blend of management skills, program area knowledge and a particular style of leadership. A well-run board will develop an outline of the job and selects an Executive Director who is a good fit.