Excerpt from the Green Hasson Janks Nonprofit Whitepaper, The Give and The Get: The Future of Philanthropy.

Most important is to have the right board make-up. A successful board needs wide diversity of skills among its members, both in their backgrounds and in their experience. This variety will enable a more thorough thought process and promote healthy discussion. The result is an organization with greater community impact and stability within the organization.

I have a specialty in the healthcare industry, specifically federally qualified health centers, where I see many diverse boards due to regulations governing these organization, where one of the requirements is for their boards to include community/patient members. Whatever part of the nonprofit industry your organization serves, it is a best practice to assess whether you have a board that reflects the community you serve.

In today’s world, diverse skills can also add much to a board. Strategic thinkers are important, because they can help boards look beyond the organization’s current issues and environment and toward the future. Knowledge of a wide range of things like cyber security, regulatory compliance, and accounting are also important. Of course, you should also have board members who can implement initiatives and evaluate their impact.

The ability to build relationships is another very important skill for board members to have. This will help your organization achieve its mission, impact the community you serve and promote your overall stability. For example, I worked with a nonprofit organization that wanted to evaluate other avenues of financing beyond their current tax-exempt bonds. A board member happened to be well connected with several large financial institutions, and he was able to secure bank financing at a much lower rate than the bonds. As an added advantage, the bank financing significantly lowered the amount of covenants, restrictions and reporting requirements. Of course, lower cost of financing also means the organization has more money to fund activities in their mission and have a greater impact in their community.

You also need storytellers who have the ability to express to the community how your organization can help them. These people are extremely useful in raising money, and they supplement the skills of the organization’s CEO or other fundraising leaders.

Finally, the board must be able to manage the organization’s talent to implement today’s initiatives as well as tomorrow’s. It is important to plan effectively for retirements and turnover. This goes beyond succession planning at the top and should include C-suite and other mission-critical roles as well. For example, a client recently asked me about developing a plan to replace a retiring CFO, who had many years of experience with the organization and had not planned for his successor. The board wanted me to evaluate current employees who might be groomed to succeed the CFO and they also wanted to know about the costs of hiring from the outside. To avoid getting to this point, I recommend that nonprofits plan well in advance by evaluating the skills sets of current employees and develop a plan for how they can add to their skills to support current initiatives, future roles and strategic plans.

Developing the right board is a longer-term proposition, so it is important to start now.

Mark Kawauchi
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Mark Kawauchi

CATEGORIES Nonprofit

Mark Kawauchi, CPA, is a principal within the Firm’s Nonprofit Audit Practice. Mark has more than 30 years of public accounting experience and is dedicated to the Firm’s nonprofit clients with a specialty in healthcare. In addition to performing audits and reviews, Mark enjoys being a business…Learn More