The Board of Directors of a nonprofit organization goes through four phases in the lifetime of the organization: founding, working, governing, and institutional.
When I founded my own nonprofit, I recruited the organization’s first Board members. You can read about that here. I asked a couple of my friends to be Board members. They joined the Board because they wanted to support me.
Phase 1: Founding Board. The Founding Board is comprised of the Founder’s friends and colleagues who have joined the Board to provide support, encouragement and some guidance. The Founder typically leads the Board. They are a small and informal group who are not very involved in governance. As the organization grows, the Board must mature with it.
I had two hats as Founder: Board Chair and Executive Director. This is quite common for new organizations; however, I need to caution you that this is not a healthy way to operate your Board on a long-term basis. Transitioning to a Working Board is the next step.
- Best practice for nonprofit Boards is a governance model where the Board of Directors serve as the top leaders of the organization, the chief staff member (i.e. President, Executive Director, CEO) reports to the Board and all staff report to the chief staff member
- The chief staff member serves at the pleasure of the Board, therefore, the Board is responsible to hire, fire and evaluate the chief staff member
- The chief staff member is responsible for operating the organization on a day-to-day basis and is responsible to manage all employees
- The Board of Directors is responsible to govern the organization (i.e. oversee the “big picture” of the organization) and to oversee the organization’s fiscal, legal and ethical integrity as well as establish the strategic direction for the organization
Phase 2: Working Board. The Working Board is comprised of some of the original Board members who can provide history of the organization and adds more membership from the community. These new individuals will provide exposure in the community, financial support, wisdom, experience and engage their contacts to be involved with the organization. The Board is a “working” board because often they take on the responsibility of operating programs or volunteering in the office. This Board helps fill in the gaps where the organization can’t hire staff just yet.
The leadership of the organization is shared between the Chair of the Board and the Executive Director. The Working Board begins to take on additional leadership and governance of the organization allowing the chief staff member to focus more on the day-to-day responsibilities and expand programming and staffing.
Additional leadership means that there additional support helping and holding up the organization. The Executive Director is the one, center column holding the organization up. If something happens to the Executive Director, the organization will crumble.
Phase 3: Governing Board. The Governing Board is comprised of a larger, more diverse group of community supporters who are impassioned with the work of the organization and equipped with the knowledge and leadership to lead the organization and set the strategic direction. They are responsible to set policies and oversee the Executive Director. Most likely the Founder is no longer involved in a large capacity.
At this point, there is a fully staffed office that oversees and operates all programs. The Board members may still volunteer for the organization as docents or small jobs around the office, but their role in the office is no longer crucial like it was during the Working Board phase.
Phase 4: Institutional Board. The Institutional Board is comprised of the most prominent members of the community who also tend to be large financial supporters. They spend most of their time delegating governance to committees and providing access to funders and other influential members of the community. They are and are connected to people with affluence and influence. An example of an Institutional Board is most often seen with hospital and university Boards.
There is a dynamic transition that happens from the Founding Board to the Institutional Board. The leadership of the organization is responsible to grow the Board by adding new members, developing strategic direction, providing trainings and helping each Board member understand his or her role in the organization. In order to keep Board members engaged, they need to have a job whether it is helping write a new curriculum or chairing a Board committee.