BOARD MEMBERS AS STEWARDS

We’ve all heard these “job descriptions” for nonprofit board members:

• Give! Get!! Get Off!!
• Wit. Wisdom. Wealth.
• Time. Talent. Treasure

And the list goes on.

In my opinion, these clichés do not adequately define the roles and responsibilities of nonprofit boards. They are more complex and include the following:

• Fiduciary—Ensure that complete records are kept (as required by law).
• Fiscal—Keep records properly; account adequately; use resources wisely; honor donors’ requests; practice responsible fundraising
• Administrative—Hire and manage the CEO
• Policy—Adopt policies that will help ensure that the board’s legal responsibilities for oversight are met.

What about stewardship, you wonder? That is the subject of this brief article, as it is perhaps the principal role of a nonprofit board.

Looking at this responsibility from a macro point of view, I think there are two broad tasks:

1. Ensure that that the organization is operated for charitable purposes, not for private benefit.
2. Ensure that the organization’s assets are held “in trust” to meet its charitable mission.

Kevin Monroe, founder of X Factor Consulting, is on the right track, I believe, when he breaks nonprofit board stewardship into four types.

1. Assets and Resources: The board is responsible for protecting the organization’s assets and resources as well as ensuring they are used to advance the organization’s mission.
2. Mission: Being the steward of the organization’s mission, it is the board’s responsibility to keep the organization focused on its mission and ensure that all organizational activities and resources advance the mission.
3. Community Trust: The board has a responsibility to maintain the trust of those it serves (clients), those who partner with the organization (funders, stakeholders, partners), and those that benefit from its service.
4. Reputation: The board’s stewardship also includes the organization’s reputation and image in the community.

Successful fulfillment of these duties requires the following personal qualities:

1. Active participation: The board cannot fulfill its legal responsibilities without being active participants in the management of the organization.
2. Informed participation: The board must ensure that it has enough information about the operations of the organization to determine if it is being operated in ways that fulfill its mission.
3. Loyalty: The board must be focused on promoting the health and wellbeing of the organization, not any private interest. Great care must be taken to ensure that any transaction between the nonprofit organization and a board member, their families and businesses, are “fair and reasonable,” that there was full disclosure, and that the transaction was “clearly in the best interest of the charity.”
4. Obedience: The board should also be thoroughly familiar with all other policies established by the board to govern the organization and adhere to those.
5. Due care: The board must make decisions and carry out actions for the organization with “the care an ordinary prudent person in a like position would exercise under similar circumstances.”

Boards that are serious about their sustainability are also serious about their stewardship responsibilities. To paraphrase Josiah Stamp, there are some boards that dodge their stewardship responsibilities.

If you are interested in establishing or reinvigorating a Board, the experts at S. Sutton & Associates Inc. can help. Schedule a complimentary consultation, and in just a 30-minute call you’ll receive invaluable, actionable advice and much more.