Nonprofit Board Members Research Articles

Keep tabs on potential outside influences of board members

Ideally, nonprofit board members are all suitably independent, meaning that their thoughts and opinions—and ultimately, their votes on matters of importance—are not made while under any outside pressures.

Ensuring asset safety abroad: A vital imperative for nonprofit board members

A lapse in duty of care can spell disaster for any nonprofit.

Help reluctant board members with donor stewardship activities

For nonprofit board members who are uncomfortable with asking donors for money, the “go to” for executive directors and development staff is often to have them do donor stewardship activities—more specifically, craft thank‐yous and glad hand at fundraising events.

Setting expectations key to getting 100% board giving, experts say

In a perfect world, all of your nonprofit's board members would make personal financial contributions to the organization, demonstrating their commitment to its mission and the good it is doing. But in reality, many nonprofits struggle to get 100% of their boards to make these gifts, for a variety of reasons.

When onboarding new members, set proper expectations for giving, experts say

If you're lucky, all of your nonprofit's board members are happy and eager to make personal financial contributions to the organization each year, demonstrating their commitment to its mission and the good it is doing. But unfortunately, many nonprofits struggle to get 100% of their boards to make these gifts, for a variety of reasons.

Go beyond ‘thank‐a‐thons’ to show greater donor appreciation

For nonprofit board members who are hesitant to take part in fundraising, a good and oft‐used alternative is to assign them other forms of donor stewardship duties—most commonly, thanking donors. And if the nonprofit has been busy and lets this task languish on the back burner, organizations sometimes plan “thank‐a‐thons” where staff and boards churn out thank‐you notes to swarms of donors over the course of a week or two. While experts say this is better than nothing—that is, not sending any thank‐you at all—it often comes too late in the cycle to matter much to the donor.

Warren Buffett’s Advice … Good for Nonprofit Endowments?

Owing to their personal success, affluent individuals are often asked to serve as nonprofit board members to help guide endowment investment policies. The coming wealth transfer, combined with a low-yield financial environment, adds importance to endowment financial management. Standard financial management favors a 60/40 allocation between equities and bonds. Warren Buffett, however, rejected this standard financial advice and directed the trustees of his estate to invest in a 90/10 allocation; 90% invested in the S&P 500 Index and 10% in short-term bonds. This article tests this strategy against various allocation methods for nonprofit endowments using a 5% payout. The heavier stock-weighted portfolios provide a higher likelihood an endowment balance will stay above the nominal initial balance and the inflation-adjusted balance, leading to more certainty the endowment can be relied on for operational expenses. The tipping point appears to be the 80/20 allocation. Allocations with more than 20% bonds perform noticeably worse and allocations with less than 20% bonds perform marginally better.

Understanding personal ‘asking styles’ can help boards with fundraising duties

Unfortunately, it's quite common for nonprofit board members to be wary of taking on fundraising duties. The fact is, many board members don't feel comfortable asking for money, and they feel unprepared to do so—which often leads to lackluster results that reinforces their initial anxiety about it.

Longer board terms make sense for some organizations

Nonprofit board members are likely familiar with the many ways in which having defined term limits can help the organization in the long term. Some commonly cited benefits to term limits include:

Internal investigations for nonprofits: A means of identifying and addressing misconduct before the regulators come calling

The worst nightmare for most nonprofit board members is a complaint that sparks an investigation of misconduct at the organization. The ember may have been burning for some time before the board becomes aware or may be a sudden wind‐driven catastrophe that started with one person's bad or inept act. No matter the source, how can the board best surround the organization with a defensible space? And, once battling the heat of the disaster, what to do? This article discusses best practices in board policies that help to identify issues early, respond early and minimize the toll of an investigation.

Know meeting types and purposes for better board governance

For new executive directors and nonprofit board members, the various requirements pertaining to meetings where boards conduct their business can be a little confusing. According to Ellis Carter of Caritas Law Group, an Arizona law firm with a specialized nonprofit practice, EDs, board members and staff might be unfamiliar with how state laws and even their own organizational bylaws relate to the different types of meetings that nonprofit boards hold from time to time.

Well‐crafted compliance program prevents, detects and corrects malfeasance

Crafting an effective regulatory compliance program is an important duty for nonprofit board members looking to ensure that adequate policies and processes are in place to protect the organization from malfeasance and legal troubles that follow.

‘Emotional rancor’ makes board member conflicts much harder to manage

Experts say it's common and expected for conflicts to arise among two or more nonprofit board members. In fact, dealing with these situations can be one of the more challenging tasks for board chairs and executive directors, who are often drawn in to help lead the conflict to a resolution that appeases those involved.

Nonprofits, boards urged to be bold, take advantage of PPP loan program

Nonprofit board members should get over their fears and consider applying for loans under the federal government's Paycheck Protection Program, maximizing the benefits of that funding by putting it to work in the most effective way possible: funding their organization's fundraising and development departments.

Utilize available tools to help boards stay attentive during virtual meetings

After nearly a year of pandemic‐induced reliance on virtual meeting platforms, nonprofit board members might be susceptible to “Zoom fatigue” just like any other type of employee. Keeping them attentive during meetings can be challenging for a variety of reasons, experts say. For one, we engage with people on our computer screens differently than when we are with them in person. For example, there are different levels of “eye contact” when meeting virtually versus in person, we have different ways that we focus (or divert) our attention to what's being presented to us and we even have different ways to adjust our seating or standing positions to account for personal comfort.

Public Service Motivation Among Nonprofit Board Members and the Influence of Primary Sector of Employment

Although considerable research has developed exploring effective management of nonprofit boards of directors, there is limited understanding of the motivations of nonprofit board members to serve on boards. Using a sample of nearly 700 nonprofit board members, this study examines antecedent conditions and dimensions of public service motivation (PSM) as they apply to nonprofit board members and the differences in levels of PSM between board members who have worked primarily in the nonprofit, public, or private sectors. Board members with primary employment in the public sector show the highest levels of PSM. This study illustrates that nonprofit board members who work in the private sector exhibit fewer values associated with public service motivation. Other variables that predict public service motivation among board members include gender, level of education, and formal volunteering activity, among several others.

A Board Coaching Framework for Effective Nonprofit Governance: Staff Support, Board Knowledge, and Board Effectiveness

ABSTRACT Nonprofit boards of directors are responsible for the governance of their organizations. Despite a wide literature on board governance, empirical studies have focused primarily on board characteristics such as board size, frequency of board meetings, or board member characteristics. Building on prior literature, we use qualitative interview and survey data from nonprofit board members and executive directors, respectively, to develop a board coaching framework to better understand how board dynamics, in particular staff support for board activities, can influence overall board performance. Our findings suggest the need to recognize the central role executives and staff play in nonprofit governance.

How does a board of directors influence within‐ and cross‐sector nonprofit collaboration?

Board members play a significant, yet largely unexamined, role in nonprofit collaboration. Processes, such as finding prospective partners, creating common ground with a partner, and establishing appropriate collaborative governance implicate nonprofit board members. In contrast to the scholarship of the role of interlocking directorates as potential networks for nonprofit collaboration, this paper examines the role of board members' social and human capital on nonprofit collaboration with other nonprofits, businesses, and government agencies. Drawing on online survey data from 636 nonprofit organizations, this paper finds that board social capital—but not board human capital—is positively related to the presence and number of within‐sector and cross‐sector nonprofit collaboration. However, board human capital enhances nonprofit‐government collaboration, when board social capital is also high. The results provide a novel perspective in nonprofit collaboration and board management research.

Nonprofit Board Members’ Reasons to Join and Continue Serving on a Volunteer Board of Directors

ABSTRACTBy expanding understanding of individuals’ reasons to serve on nonprofit boards, practitioners will be able to improve recruitment and retention of quality board members. This study explores board members’ reasons for joining and continuing to serve on a volunteer nonprofit board of directors. A survey of nonprofit board members shows similarities in reasons for initially serving and continuing to serve on a board, but analysis of group means reveals significant differences on 20 of 27 dimensions examined. Organizational-level reasons are reported as more important as a result of board service, whereas individual- and community-level items decline in importance after board service. Latent factors that appear to be important for both joining and continuing to serve on a nonprofit board include organizational commitment, personal growth, recognition, and socialness.

Reactions of Nonprofit Monitors to Financial Reporting Problems

ABSTRACT This study investigates how those in charge of monitoring nonprofits—donors and boards of directors—react to disclosure of financial reporting problems (accounting errors and internal control deficiencies). I find that donations tend to fall following disclosure of severe errors and control deficiencies. Furthermore, donations fall following errors only when they are disclosed in the report that is most widely accessible by donors. Turnover of chief financial officers (CFOs), representing a possible response of boards to financial reporting problems, increases following disclosure of errors. CFO turnover is not robustly related to control deficiencies. Overall, the results are consistent with donors and boards being willing to take action in response to concerns about financial reporting quality, thus indicating that they consider financial reporting important and that they act on signals of low quality. Interviews with nonprofit board members suggest that the value of error-free financial reporting derives less from the decision usefulness of the information and more from demonstrating that the organization is competent and trustworthy. JEL Classifications: M40. Data Availability: Data are available from sources identified in the paper.