2017-12-05 00:00:00 Nonprofit Organizations English Set term limits to facilitate smooth operation of your nonprofit's board. Discover four key benefits they provide. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/12/Non-profit-board-members-discuss-term-limits-posing-for-photo.jpg https://quickbooks.intuit.com/ca/resources/nonprofit-organizations/nonprofit-board-member-term-limits/ Establishing Term Limits for Non-profit Board Members

Establishing Term Limits for Non-profit Board Members

2 min read

Setting term limits helps your nonprofit board function at full capacity. New board members offer fresh ideas and can resolve differences of opinion that cause delays. Problems that arise from different personalities are easier to manage knowing that board turnover is dynamic.

Easier to Recruit

Sitting on a board requires making a commitment and accepting personal sacrifices, such as less family time or perusing other interests. If your board members know in advance that their term has an expiry date, they can plan their other commitments around the duration of the appointment. For instance, a prospective board member who has a small business may agree to join a nonprofit board for a two-year term knowing it won’t affect their long-term plans. If your nonprofit has several candidates in mind, ask them what term limit would suit and determine if you can accommodate their request. If your nonprofit has flexibility in setting term limits, consider offering varying lengths to attract the best talent. Consider offering both short and long-term limits to maintain a healthy balance.

Recharge the Board

Term limits ensure fresh perspective on issues. Sometimes board members get stuck in their ways and are reluctant to call for change. New members often alter the personal dynamic of the board which rejuvenates others and encourages them to raise new ideas that they may have been reluctant to discuss previously. For example, a board member for a medical nonprofit may disagree with a particular type of medicine the organization distributes. After the leading board member’s term expires, they feel comfortable raising their concerns. If your board has trouble making a decision, the departure of a retiring member may change the balance of support and resolve the issue, helping to reduce fatigue.

Helps Fundraising Activities

Board members are often responsible for a nonprofit’s fundraising activities and initiatives. Once they’ve used their list of contacts, fundraising dollars can start to dry up. Setting term limits means a nonprofit organization frequently has new fundraising options available via incoming members. A new board member might come from a different background to a departing member and, through their network, organize a fundraising activity that wasn’t previously possible. A new member who has contacts in local council might be able to get access to a public space where your nonprofit can organize a fun run.

Future Leadership

Term limits encourage your nonprofit’s board to invest in future leaders. Senior management focuses ahead, and young people have the opportunity to grow into the role and potentially form a lifelong association with the organization. A new board member under 40 may initially serve and then serve again at a later stage in life, bringing back wisdom and knowledge that the nonprofit can utilize. The board member may have had a career in accounting and provide insight into minimizing expenses. Young board members bring enthusiasm and are eager to prove their ability, often making them capable leaders with the ability to motivate others.

Establishing term limits keeps your board running smoothly and in a position to make decisions and get things done. More effective recruitment, board rejuvenation, additional fundraising opportunities, and the ability to develop life-long connections support using term limits for your nonprofit organization’s board appointments.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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