2018-04-26 10:55:50 Nonprofit Organizations English Learn why using the standard board composition matrix when recruiting for your nonprofit's board of directors can lead you astray. Review... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Nonprofit-board-members-review-alternatives.jpg https://quickbooks.intuit.com/ca/resources/nonprofit-organizations/small-business-nonprofit-board-matrix/ Alternatives to the Nonprofit Board Composition Matrix

Alternatives to the Nonprofit Board Composition Matrix

4 min read

As the head of a Canadian nonprofit organization, you rely on your board of directors to give you perspective and help you see the big picture. Your board members can fill in gaps where you lack experience. But all too often, the standard method of choosing board members relies on checking off boxes on a list rather than looking for board members who can provide you with the wisdom and advice you need. If you’re a smaller nonprofit, you can’t afford to waste any of those valuable seats on directors who aren’t going bring value to your organization. Fortunately, alternatives exist to the typical board composition matrix used to put together a nonprofit board of directors.

The Standard Composition of a Nonprofit Board

Nonprofit organizations often hold slots for board members based on their skills, professions, or connections. For example, most nonprofit boards insist on having a lawyer and an accountant at the table. They also often designate a spot for a volunteer who’s passionate and involved with the organization, and large donors may be able to command a board seat. In addition, nonprofits, although they may try to avoid having overt quotas, often try to make sure their board members reflect demographic diversity.

The Traps of the Board Composition Template

The problem with trying to fill slots on the typical nonprofit board of directors template is you may not end up with the board members you really need to advise you. Issues can occur when trying to fill slots based solely on skills, demographics, or connections.

It’s all too easy to say you need a lawyer or an accountant on your board, and then settle for a friend or someone who’s easy to get to meetings. But having the wrong kind of specialist can mean you’ve wasted that board seat. For instance, if your nonprofit focuses on helping foster children, a criminal attorney or someone who specialises in intellectual property law may not be the most useful choice. An accountant who works as a banker may not be handy when it comes time to advise you on filing nonprofit financial reports.

Another potential trap in board recruitment is trying to seek out demographic diversity among board members. Yes, it’s absolutely true that bringing a wide diversity of members on the board can be of extreme value to you. But all too often, looking for someone who fills in a demographic slot (“We want one black person, one Asian person, and two women”) can lead you to add board members who aren’t fully engaged with your nonprofit’s mission.

The temptation to recruit board members in the hopes they’ll write big cheques to your nonprofit can be very strong. Rich people are friends with other rich people, this thinking goes, so they’ll invite their friends to donate to your cause. Unfortunately, it doesn’t always work the way you’d like. Your wealthy board member may feel that by serving on your board, they’ve done enough, or they may already have giving commitments to other nonprofits. If you never say your board member needs to essentially buy their spot on the board with a large donation, you could end up quite frustrated.

What Do You Want Your Board to Do?

Yes, you may need someone who can advise you regarding legal or financial matters. But that person might be the director of another nonprofit or a small business owner rather than a licenced professional. Look at the specifics of the legal or financial areas in which you need guidance to widen your search possibilities for your board. In addition, look for people with experience and knowledge that could be helpful as you plan for your organization’s future.

To avoid the demographics trap, cast your net wide as you seek out board members who can meet specific needs for your organization. Do you need someone who speaks a minority language to connect you with a population you’re serving? What about someone who grew up as a foster child and can bring a unique perspective to your board? If you look at these needs first, you can create a short list, and then narrow it down by considering demographics data appropriately.

The trap of inviting a wealthy person to your board is easy to overcome. Simply be honest from the beginning of your discussions about expecting them to donate to your organization. If you have a rule requiring all board members to donate, it may be easier to ask your prospective board member how much you can expect from them. Related to the wealth trap is the one involving recruiting a board member who has a lot of great connections. You need to be upfront with your potential board member here as well, asking if they’re willing to approach their connections on your behalf before you invite them to take a seat at the table.

Tips for Choosing Your Board Members

Instead of focusing on connections, demographics or professions, try choosing board members based on what they’re willing to do for you. You might ask one prospective board member if they would commit to raising $100,000 for your organization, and another possible member might use their expertise to help you rebuild your website or negotiate for new facilities.

By determining ahead of time what you expect from your board members, you can communicate your organization’s needs and make sure prospective board members are prepared to step up. If you draw up agreements for individual board members, specify term limits so you can swap out board members as your nonprofit grows and your needs change.

Choosing your board members based on what they can do to enhance your organization rather than trying to fill traditional slots gives you the expertise and flexibility you need, especially when starting out.

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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